As the CEO of women’s focused ethical super fund Verve Super and ethical investing app Verve
Money, I spend a lot of time talking to women about building wealth.
Over the years, I’ve also become a confidant for friends, family, and random strangers, who feel anxious about the decisions they’ve made.
Effective money management is crucial for everyone, regardless of gender. However, studies have
shown that women are more likely to face certain obstacles, ranging from the wage gap to societal
expectations.
Here are 5 money mistakes women are making & how to avoid them:
1. Taking a 'Head-in-the-Sand' approach to money management
One of the most common mistakes that I hear women expressing is that they wish they’d taken a particular action sooner.
We recently ran a financial coaching challenge for our members, and we discovered that just by helping women to come up with a financial plan we helped reduce financial anxiety amongst more than 60% of participants. It’s stressful when we know we’re ignoring an important problem in our lives.
We hear this with superannuation all the time, people will email us and tell us that they spent ten years putting off a decision to consolidate all their super funds, but in the end, it only took five minutes to make the actual switch and they regret all that time spent procrastinating and worrying about it not being done.
2. Delegating Financial Management to a Partner
This is a big one that women in their 40s, 50s and even 60s often have. It’s very common for women to delegate financial management to a partner, often due to a combination of societal expectations about who should be managing money or who is better at it, and the practicality of dividing household labour when women are often taking care of caring responsibilities and other responsibilities in the home.
This is really problematic for a couple of reasons, the first being that it’s hard to know if your partner is making the right decisions if you’re not contributing to that decision making, and the second is that it can cause huge challenges in the case of divorce, separation, illness, or death. I suggest that while it’s ok for one partner to take the lead on the day-to-day admin practicalities of managing money, both partners need to be equally involved in financial planning, decision making, updated on progress and able to log in to all accounts.
3. Underestimating the Importance of Investing
Historically, women have been more risk-averse when it comes to investing.
Avoiding investment opportunities due to fear or lack of knowledge can limit potential financial growth. Investing wisely can be a powerful tool for wealth creation. That’s why with Verve Money we created a simple app to help women get started, with ethical investment portfolios curated by experts, so that our customers can get started without needing to pick their own stocks.
4. Failing to Negotiate and Advocate for Fair Compensation
The gender pay gap remains a significant issue, impacting women's earning potential. Failing to negotiate salaries and benefits can perpetuate this gap & hinder financial progress.
Women should actively research salary benchmarks, develop negotiation skills, & confidently advocate for fair compensation. All employees should be advocating to their employers to release data on pay gaps within their organisation & advocate for better pay transparency.
5. Neglecting Retirement Planning
Many women overlook the importance of retirement planning, particularly due to career interruptions for caregiving roles or other commitments. However, neglecting retirement planning can lead to financial insecurity and stress in later years.
Women should learn about how the Australian superannuation system works, consider making
additional contributions early to take advantage of potential tax concessions, & ensure they
have a plan for reaching their retirement goals.
Find Out What Ethically Invested Super Founded By Women, For Women+ Looks Like through Verve.
