Australian women tend to experience higher stress levels than men, and money is often a leading cause of anxiety, a new study has revealed.
The study by Lifeline found 71 percent of respondents suffer from stress caused by finances, and over 70 percent of women are occasionally losing sleep due to stress, with one in five losing sleep on a regular basis.
The issue is, when it comes to money, many women take it very seriously. A recent survey from ME Bank found 21 percent of women follow a budget or a savings plan compared to 16 percent of men.
However it’s in the area of long-term wealth creation that women tend to fall behind. The same research found 25 percent of men are building wealth for retirement compared to just 19 percent of women.
Part of the problem is highlighted by research from RMIT, which shows financial decisions made by women are often based on family rather than personal needs.
RMIT’s Professor Roslyn Russell explains that for women, “The major motivation for seeking financial education or information was to provide a more comfortable, easier life for their families or children.”
This altruism is leaving many women short-changed especially in retirement. As a guide, the median superannuation balance for women is around 45 percent that of men, according to a recent Roy Morgan survey.
Elaine Henry, member of the Australian Government Financial Literacy Board, says, “Women face particular challenges in planning for their future and need to take the reins of their finances as early as possible.”
Among these challenges are greater life expectancy, meaning the prospect of a longer retirement, coupled with lower earnings and time taken out of the workforce to raise children. Taken together it means women face hurdles for building long term wealth. But it can be done.
As a starting point, Henry believes women need to “extend their focus from day to day money management to planning for the future”, and that means becoming more active in financial decision-making beyond managing the household budget.
Henry says, “A great place to start is to do a money health check. This will show you which areas of your finances need attention.”
Start by comparing rates paid on savings accounts as well as your credit cards, home loans and other financial products using a free comparison site like RateCity, says CEO Alex Parsons.
“Shopping around between financial products is a key starting point for a financial health check,” he said.
“In particular, women can harness their savings skills by comparing returns across different savings interest to ensure they are earning the highest available returns. From here it’s a matter of determining how to use a lump sum to strengthen their financial future – something that will go a long way to reducing personal stress levels.”