Choose to Challenge: Female Finance Stereotypes & the Gender Pay Gap
This year's theme for International Women's Day on Monday 8 March is #Choosetochallenge … which is exactly what my husband did recently. It challenged me when he chose to express an interest in investing in cryptocurrency. This cryptocurrency is something new, not something I entirely understood, and, even though I have worked in finance for over 20 years and am quite financially literate, I allowed myself to slip into the female stereotype of being risk averse and challenged by the change.
But, instead of burying my head in the sand and leaving the decision up to him, I decided to put on my ‘big-girl pants’ and have a discussion with him about the pros and cons, the risks and benefits, and whether it was something that fitted with our financial plans for the future. This of course meant a much better outcome for us both and it's what prompted me to write this article for International Women's Day encouraging you to take up the challenge, start the conversation, and help to build female participation in the Australian economy.
There is an abundance of research that supports the theory that women are less confident financially than men and have a lower rate of financial literacy, despite the evidence that women predominantly manage the household finances. There is also a plethora of research that speaks to the significant gap between men and women's work, pay and wealth. And still more that supports greater inclusion of women in workplaces, company boards, and our government to benefit from the diversity of thought, perspective and experience. To achieve that inclusion though, men and women alike, need to be more prepared to speak openly and candidly about financial matters.
As Melissa Browne, founder of The Money Barre, says in her book 'Unf*ck your finances' "… for women particularly, there is an almighty ick factor when it comes to money and finances. … girls don’t talk about it and they certainly don’t say they want more of it. The problem is, if we want to become financially empowered, to have choice, to make societal change, to raise funds for great causes, to reduce the wage gap and look after ourselves in our old age – we kind of need to start financially adulting."
So, how do we start 'financially adulting'? One way is to become more conversant with our own financial knowledge, situation, and behaviours. This means having a greater understanding of, and being able to speak more freely about, how we manage our money, what influences that, and how we feel about it. By acknowledging where we have gaps in our financial literacy and how we can improve our financial habits we're more empowered to boost our own financial wellbeing and become a greater contributor to the community.
There are 4 key elements that contribute to our financial wellbeing.
Firstly, financial awareness and there are 2 parts to financial awareness. The first is the practical understanding of your current financial situation, and the second is how you feel about that emotionally.
The practical understanding can come from undertaking an exercise whereby you lay out in front of you all the financial paraphernalia in your life. Things like your payslips, credit cards, bank statements, superannuation reports, insurance policies and so on. Then, organise this information in a way that makes sense to you so you can clearly see what you own, what you owe, what money you have coming in, and how you currently spend your money.
The emotional awareness is a little trickier and does require some self-reflection. Having laid out your financial position for yourself, now be open to how you’re feeling about it. This could range from fear, frustration, or shame through to pride or optimism at the other end of the spectrum. Reflect on where you are now and where you would prefer to be. Deciding you are ready to make that change is a great first step towards enhancing your financial wellbeing.
Secondly, financial literacy, being the knowledge and skills needed to confidently manage your money. For many people this will be life-long learning as their financial situation changes and as financial market conditions change. There are many places to source information on financial literacy skills. It would be remiss of me not to mention here, of course, the role the Davidson Institute resources can play in helping improve your financial literacy. You might consider our Financial Fitness course, or Ruby Connection’s Good Money Management booklet to help you get started.
As you acquire financial knowledge and skills throughout your life the next step is then to applying those skills to your own situation where appropriate. This application of skills then becomes a set of financial behaviours.
Financial behaviours are the third key element to our financial wellbeing and refers to how you apply financial skills and knowledge to your everyday decision-making. Financial literacy helps you figure out the 'right' thing to do when it comes to personal financial decisions. However, as humans (and especially as women) we don’t always make the most logical choice as our emotions and values influence our decisions as well. The impact of that is that we don’t always act in ways that are beneficial to our financial situation. It may be helpful to identify and reduce those behaviours so you can make choices that are more helpful to achieving the financial future that you want.
Finally, financial satisfaction is the contentment that comes from the inner belief that you have made the financial choices that best suit your situation. This will be different for everyone depending on your experiences and expectations, your financial skills, and the choices that you’re comfortable with. For some it may mean having a budget that you work within and review regularly; it may mean having an ‘emergency fund’ that will cover expenses for a few months should you need it; for others it may mean working diligently towards saving a deposit for a house or building up your retirement nest egg. While each of these things looks quite different, what they have in common is taking control, applying your knowledge, and making sound choices that lead to financial satisfaction.
Once we're more comfortable that we have our own financial wellbeing in hand we can then take that next step to become a more powerful force in making headway towards gender equality, diminishing the pay gap, and empowering women to play a more confident financial role in our homes, businesses, communities, and economy.
I want to finish by sharing some words I read the other day that really resonated with me. The Honourable Marise Payne, Minister for Foreign Affairs and Minister for Women, was speaking to the student cohort at Burwood Girls High School in Sydney. The motto of the school is 'Not for ourselves alone' and Ms Payne's words were "… those four words tell me a lot about what young women at Burwood Girls High School aim to be, because to be interested in not just your own well-being or success, but that of others is absolutely the sign of a true leader. I also think that 'Not for ourselves alone', perhaps hints at the shared work that is indeed ahead of all of us to ensure that any progress that we make on the path to gender equality is sustainable progress and that the benefits of that are shared, and indeed, shared for the greater good."
So, I encourage you all on this International Women's Day 2021 to #Choosetochallenge, take the lead, strike up the conversation, spark debate, and to work toward more financial equality and inclusion for the benefit not only for ourselves but for our broader community too.
This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice. ©Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.
 https://www.financialcapability.gov.au/files/financial-literacy-in-australia-insights-from-hilda-data.pdf ; https://www.financialcapability.gov.au/files/women-s-economic-security-in-retirement.pdf ; https://treasury.gov.au/sites/default/files/2020-02/preston030220.pdf ; https://www.sydneywomensfund.org.au/wp-content/uploads/2019/07/EMAIL_WEB_Portrait-III-Scorecard-Booklet-2.pdf