Women need to prioritise budgeting and saving as soon as they join the workforce to avoid financial stress in the future, according to new research.
Mortgage brokerage Zippy Financial has urged women to boost their financial literacy skills and take the reins of their finances before settling down to avoid a future riddled with money problems.
Director and principal broker Louisa Sanghera said it was vital for women to establish prudent financial practices before meeting their partners, and said women’s financial literacy levels have consistently been below par.
“Society has changed significantly since the days of a man being a household’s main breadwinner, which is why it’s so important that women take charge of their finances early,” she said.
“If women are going to improve their financial futures, they must adopt a number of smart money strategies. Preferably, this would happen when they are young and single, but they can be instigated at any age, to help prevent financial stress following a relationship breakdown in particular.”
Non-bank lender State Custodians Home Loans surveyed people nationwide on how financial difficulties would be handled following a stressful life event such as job loss, divorce, serious illness or a death in the family.
It found that almost half of all single women and 60 per cent of single mothers said not knowing enough about money or who to turn to for help would be the biggest obstacle to getting their finances or their housing issues back on track.
Ms Sanghera offered four strategies women could implement to prevent this from happening. She urged women to be prepared by creating a budget and adhering to it, and creating a financial contingency plan to follow in times of financial stress such as job loss or a divorce.
She also urged women to start saving money incrementally and adopt a regular saving pattern when they start working.
Women also need to be realistic about their finances. For example, in the event of a divorce, women need to be realistic about whether they can afford to continue living in the family home.
“We all have emotional attachments to our homes, but sometimes that attachment can cause future financial harm,” Ms Sanghera said.
“By moving on into another home, the capital released can create a financial buffer, plus it can prevent unmanageable debt, which can have a damaging impact on your family as well as your emotional state.”
Ms Sanghera urged women to seek professional financial advice, stating the research also found that nearly 50 per cent of single mothers had received poor advice from well-meaning family and friends.
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
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