Let’s Talk About Financial Wellness

While many women associate financial wellness with an early retirement plan or being able to afford a deposit for a house. But the truth is there are a million ways to find your financial feet. Financial wellness is completely subjective and personal to each woman and their life plan/goals but what we do know is that women don’t talk about their finances nearly enough.

In a recent survey by our friends at Ladies Talk Money where they asked their community what their relationship with money was like, they also asked what was holding women back from having conversations about money – and what was clear is that one of the highest causes of anxiety, when it came to their wealth, was retirement. It also turned out that the three words that came to mind when they thought about money were Stress. Necessary. Freedom.

While it’s not unusual to see the words stress and money in the same sentence, the team at Stella just like Ladies Talk Money want you to be on the path to financial wellness, not just this new financial year but for the rest of your life.

So why is financial wellness such an important topic?

At Stella we believe that financial well-being is connected to your overall well-being; it affects our choices in life and determines our ability to make decisions that in turn will see us prosper.

We know that financial well-being is more challenging for women than men. We have systematic issues to contend with, like the gender pay gap (on average women earn $253.70 less per week than men on average).

We also know the Workforce participation gap sees 78% of men in the workforce and 66% of women in the workforce. And while just 15.3% of men work part-time, a whopping 43.9% of women work part-time while they raise their families or care for their elderly parents.

Did you know that fewer women are also taught about investing? We see 41% of men have been taught the skills, while just 29% of women have. What is super interesting though is that when women do invest, they see a 12% greater return than men.

Scarily, women’s super is also a huge issue in Australia. At age 50 the Superannuation Gap sees a 73% gap between men and women. By 2030 the projected superannuation for a man is $432,000 while a woman’s super is just $262,000 – the craziest thing of all is that women also have a higher life expectancy than men. So essentially, we retire with less but live longer.

So, let’s try and define social well-being as best we can for the purpose of this blog:

1. We see it as having the ability to pay all of your bills and expenses
2. We see it as having the freedom to eat out at your favourite restaurants, buy those shoes you’ve been dreaming about and head off on that Euro vacay you’ve been dreaming of since pre-pandemic.
3. Having control of your finances, e.g. avoiding unnecessary fees and charges.
4. Having security for the future with an emergency fund for when life throws you a curveball

So how do we make the move to financial wellness?

Tip 1: Build and balance your budget

If you are spending more than you earn, you need to take action immediately. By building out a budget you can see what non-essential expenses you are spending your cash on and try and cut back. We’re talking streaming services, Ubers when you have public transport nearby and that expensive red wine you love even though the vineyard next door sells the same grape varietal at a quarter of the price)

Start saving for that ‘rainy day’, budget and see how much you can put away each pay cycle and stick to it, it might also help if it’s a stand-alone account that you either don’t have a bank card for or that can’t be transferred through an app to spend.

Step 2: Manage your everyday expenses

Ever looked in your bank account and thought ‘I should have more money than this’, or the classic ‘where the f!?k has all my money gone?’ – if you have, you’re not alone. It is impossible to make savvy financial decisions when you don’t know where your money is going.

Want to hear a crazy fact? Women make 75% off all retail transactions in Australia, so we probably have a pretty good idea of where our money is going, nevertheless start by making a list of your regular essentials like rent, mortgage, internet, electricity, gas, petrol, private healthcare, school fees – I mean where does it end… But at least this way you’ll know the minimum amount of money you need to pay your living expenses.

Then start to take note (for a month minimum) of your spending outside of your living costs like groceries, beauty appointments, coffee and entertainment – there are also your expenses that don’t happen very often, so are in turn easy to forget. Think Christmas, birthdays and so on, and figure out how much you should set aside each month for these said ‘annual events’ so you aren’t left short when they roll around each year.

Step 3: Prepare for a rainy day

You might not be able to foresee what your rainy-day expense might be but know that it will one day (unfortunately) arrive. So put away money regularly to cover yourself in case of an emergency, any money saved for a rainy day is better than none, so don’t get too overwhelmed by the amount you put aside, just make sure that it is something each pay cycle.

Step 4: Plan for your one-day goal

Before you set a financial goal, work out how much cash you’ll need and what date you’ll need it by. That way you can calculate how much you need to set aside each month to achieve that goal. To work it out simply divide your goal by the number of months between now and your goal date. For example:

Once you map it all out you can see if your plan is realistic or if you might need to pick up a second job to make it happen, either way – we know you’ll get there!

Step 5: Get set up for success

A great way to stick to your financial wellness plan is to automatically transfer your income into different bank accounts the day after your payday. And now that you know how much needs to go into each account to cover expenses (thank you budget) you can set up a different account for:

• Essentials – for those bills, debts and irregular expenses
• Spending – for those shoes you wanted
• Rainy day – for those unexpected emergencies
• One day goal – for your euro vacay

Don’t forget to find a bank that offers no or low fees.

While conversations about money can be taboo and sometimes emotional keeping your head buried in the sand isn’t going to stop the bills coming in, nor give you the financial freedom to hit your money goals and take extended holidays because lady, we know you deserve it. It’s time to take the right steps toward financial wellness and set yourself up for success.

Further reading

Visit ASIC’s MoneySmart and head to the ‘Financial advice’ section.

Learn from Ladies Talk Money: https://www.ladiestalkmoney.com.au/

Commbank: https://www.commbank.com.au/women-in-focus.html