Empowering women: A guide to financial planning for success

There’s a significant shift happening in wealth now. Women are growing in affluence. They’re making major strides in various fields from entrepreneurship to leadership roles in corporate settings. Women are increasingly taking on the burden of family wealth management and there’s a younger, educated, single affluent female generation on the rise.

Women also stand to be the major beneficiaries of the ‘great wealth transfer’. Due to their longer average lifespans and the fact they tend to be younger than their husbands, many are in line to receive inheritance from Baby Boomer men who control a significant portion of Australia’s wealth.¹

Women are becoming wealthier, so what’s the problem?

Unfortunately, many women still face unique challenges when it comes to financial planning and wealth management. Whether due to the gender pay gap, career interruptions for caregiving responsibilities, marriage breakdown etc, it’s clear there’s a more difficult landscape for women to navigate to achieve the financially secure future they deserve. It also seems that few women seek professional help to manage their financial affairs. In fact, a 2022 study by Netwealth revealed that only a quarter of the women surveyed consulted a professional financial planner.²

A guide to financial success

Women can take control of their financial future with strategic financial planning, and Financial Advisers can play a key role in helping women make the best decisions for themselves. Challenges can be mitigated, and opportunities can be maximised with the right advice.

Here’s a guide to how women can grow their wealth for an empowered financial future:

1. Understand your financial goals:

· Start by defining your short-term and long-term financial goals. These could include saving for retirement, purchasing a home, starting a business or funding education.

· Consider your values, priorities and aspirations when setting these goals. What matters most to you and what do you want to achieve financially?

· Break down your goals into manageable steps with specific timelines and targets. This will make them more achievable and help you track your progress along the way.

2. Build your financial literacy:

· Educate yourself about personal finance topics such as budgeting, investing, debt management and retirement planning.

· Take advantage of resources specifically designed for women, such as workshops, online courses and books authored by female financial experts.

· Seek guidance from financial advisers or mentors who can provide personalised advice and support based on your individual circumstances. An adviser can cut through the noise and enormous amount of information available and ensure the right strategies are recommended for your personal circumstances.

3. Closing the gender pay gap:

· Advocate for fair compensation in the workplace by negotiating salaries and promotions confidently.

· Stay informed about industry standards and market rates for your skills and expertise.

· Network with other professionals, both men and women, to exchange insights and support each other in career advancement.

4. Protecting your financial future:

· Invest in adequate insurance coverage, including health insurance, life insurance, total disability, trauma and income protection insurance.

· Create an emergency fund to cover unexpected expenses or income disruptions.

· Establish legal documents such as wills, trusts and powers of attorney to protect your assets and ensure your wishes are followed in case of incapacity or death.

5. Investing for growth:

· Diversify your investment portfolio across different asset classes to manage risk and maximise returns.

· Seek advice on the optimal ownership structure of any investment and the potential tax consequences.

· Be aware of the fees associated with investments and consider low-cost index funds for broad diversification at very low cost.

6. Planning for retirement:

· Start saving for retirement as early as possible to leverage the power of compound interest and grow your nest egg over time.

· Estimate your retirement expenses and income needs to determine how much you’ll need to save to maintain your desired lifestyle.

· Regularly review and adjust your retirement plan as your circumstances change, such as marriage, divorce, career changes, or unexpected windfalls or setbacks.

Conclusion

Financial planning is a powerful tool for women to take control of their financial futures, achieve their goals, and create lasting prosperity. By understanding their unique challenges and opportunities, women can make informed decisions, build wealth and live life on their own terms.

If you’d like to work with a Financial Adviser who can help you achieve financial success (whatever it looks like to you), call us on (02) 9739 6555 today.

Sources:

1 https://www.moneymag.com.au/why-women-will-lead-the-intergenerational-wealth-transfer

2 Women as the New Face of Wealth Report, A survey of 881 Australian women 18 years and over (late 2022). Accessed 29/02/24: https://www.netwealth.com.au/web/resources/insights/developing-advice-tailored-for-women-why-the-time-is-now/

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Please note, the above information does not constitute financial advice and does not take into account your current circumstances or goals. Please speak with a financial adviser before acting on any information found here or throughout the 5 Financial website.

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