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Financial literacy key to equality

5 Mar 2020

Strong financial literacy is critical when it comes to having full control of your financial affairs and achieving financial independence.


The theme for this year’s International Women’s Day is ‘Each for Equal’.

Financial literacy has never been a more important issue for women. Women earn less and are more likely to have career breaks or work part time. Add to this the fact that, on average, women live longer than men, but will have less superannuation during retirement, and it becomes clear focusing on financial literacy early on in life is vital.

Financial literacy can provide benefits beyond boosting your bank balance, including increased confidence, self-esteem and emotional wellbeing. It is a way to protect yourself for the inevitable life events we all experience. Whether this be sickness, the loss of your job or the loss of your partner, we all need financial resilience to get us through. Unfortunately there are  serious consequences for women who experience financial difficulties.

According to Femeconomy, women drive more than 85% of purchasing decisions, yet many do not have control over their own financial wellbeing. Financial literacy is a key step to financial independence and providing economic security in both your working life and in retirement. Buying a property, making additional payments to your super balance or building an investment portfolio to generate wealth all require education and experience.


Fast facts:

  • Only 10% of retiring women cite superannuation as their main source of income [1].
  • 600,820 women are over the age of 45, are on low median incomes and do not own a home.  56% of these women are over 55 and are still paying off a mortgage [2].
  • 45,8139 women experienced homelessness on census night with homelessness rates up 9.5% in since 2012 [3].
  • Many of these women are or have experienced mental health distress and/or domestic violence.


Encouragingly, each year State Trustees writes significantly more wills and power of attorneys for women (57%) than men (43%). This suggests women are aware of the need to have checks and balances in place to protect their preferences, income and assets in the event they become incapacitated or pass away. Nevertheless, research conducted by State Trustees at the 2017 Seniors Festival revealed ‘Outliving my money’ as the primary concern for 55% of women surveyed, compared with just 32% of men.

Mikaela Stafrace, Founder and CEO of The Placement Circle and WomenCAN, notes the increasing issue of older, poor and single females who find themselves without a permanent safe place to live and limited or unreliable income. “Entrenched gender inequity is the root cause of financial disadvantage for women. One well-documented circuit-breaker of poverty and attendant homelessness is reliable employment and strong financial literacy,” says Stafrace.

This becomes even more important when you consider women are more likely to outlive their partners than men. For many women this can mean having to pick up the financial pieces in the latter stages of life and make decisions that will impact their lives, and potentially the lives of their wider family for years to come.

State Trustees data indicates women are more likely to suffer elder financial abuse than men, so taking responsibility for your financial affairs early on is a key step towards protecting against this.

“Many women find themselves in the position of having to make decisions about life choices after many years of having their partner make such decisions. Loss of that partner through death or divorce can put a woman in the stressful and sometimes isolated position of not knowing how to manage the money she has,” says Stafrace. “Access to financial literacy training, a good peer support network and sound advisors removes much of the uncertainty and distress such women experience.”

It is essential to have wills and estate planning in place to protect against financial decisions being taken against your wishes should you become incapacitated. This is another potentially daunting area of financial decision making, but it can be made simpler by consulting financial professionals who are able to answer questions, explain the process in straightforward terms and ensure your intentions are formally laid out in a legally binding document.


Related links & sources:



[1] Australian Bureau of Statistics, Retirement and Retirement Intentions, cat. No 6238.0 (2013)

[2] Data generated November 2013 from 2011 ABS Census using Table Builder.

[3] ABS Census of Population and Housing: Estimating Homelessness 2016


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