If you’re single, divorced or widowed and struggling financially, there’s some good news – you don’t need a man to get by.
You can do it on your own – and it all comes down to learning how to become financially savvy.
Now before you go blaming yourself for your financial situation, there’s a few things you should know.
It’s not always your fault!
Nerida Cole from Dixon Advisory explains that there’s a lot of challenging historical reasons for why many Baby Boomer women don’t have financial security in retirement.
“It’s been pretty hard for women of the Baby Boomer generation to have built up a strong balance of super or investments,” she said.
“They shouldn’t feel that it’s something they are doing wrong because they haven’t got this all sorted out.”
Unfortunately for most older women, the decision to have children creates a big impact on their finances – during their working life and at retirement age.
According to Cole, it comes down to the fact most women from the Baby Boomer generation weren’t paid any maternity leave.
“That means there are long periods they would have had out of work while they were having children,” she said.
“This often means that they had very little employment income for themselves or to put into superannuation.”
Don’t despair though ladies – it’s never too late to become financially savvy!
After all, it wasn’t that long ago a woman couldn’t get a loan by herself, but today business and finance firms recognise the need to help, support, engage and empower women with their finances.
So, how can you become more financially savvy and get by on your own?
1. Educate and empower yourself
If you don’t feel like you know much about money or your husband/ex-husband handled all the money, there’s no better time to educate and empower yourself to feel in control. Cole says, “As you go on this journey, you’re going to have to ask a lot of questions – it takes a lot of confidence to do that.” Cole advises that there a number of financial companies, including Dixon Advisory, that host educational forums and sessions that can allow you to build confidence with finances while socialising with like-minded women. “There are likely to be many women in the same situation as you and learning together builds support networks,” she said. “You can also try looking at online courses and read articles on sites such as Starts at 60.” “There’s a lot of really good educational articles and tips that are out there on topics such as retirement planning and superannuation.” As they say ladies, never say never! Becoming financially savvy is definitely not something you should throw in the too hard basket.
2. Understand your budget and start making and saving money
While it might sound boring, it’s very important for you to know and understand your exact financial situation. A good place to start, according to Cole, is by reviewing your budget. “What’s coming in and what do you need to spend on key expenses?” she said. “If you can squeeze your utilities provider, bank and insurer for a better deal you keep a little bit more for the fun things.” This might include going to lunch with friends or having your hair done. So, what about making and saving money? Well, now is a good time to check if you’re eligible for any extra income such as the age pension. Cole said Centrelink often have free information sessions about pension eligibility. “The pension can provide with a valuable base level of income that can help you out,” she said. “Knowing how much you can expect will help you understand how much you need in other savings to cover your day to day cost.”
3. Don’t be afraid to ask for some advice
You’re proud and want to do it on your own. That’s a great trait to have! But don’t be so proud that you won’t ask for help. Asking for help from a financial advisor can seem like a daunting task for you, but it doesn’t have to be. If you’ve got assets that make you ineligible for the pension, than an advisor is more likely to be necessary, but Cole advises that if you’re going to a financial advisor and don’t feel like they’re talking your language, tell them so. “As women we are truly unique, which is why you might need to help your financial advisor by being clear about how you like information presented to you,” she said. “Give your advisor some feedback on what you want.” She believes financial advisors need to remember that not every Baby Boomer woman will have the same financial interests or knowledge. “If you’re finding that your advisor doesn’t have much flexibility then there’s never been a better time to shop around.”
4. Take your time
If your financial problems arose from difficult circumstances such as the death of your husband/partner or a divorce, then you need to give yourself some breathing space. Cole said it’s important to recognise those circumstances as significant trauma. “It’s important to not make rash decisions and give yourself some time to get through it,” she said. If you have family members and friends you trust, they can be a good source of support and a sounding board, but Cole advises “don’t give up control of your finances to another person, be prepared to gradually build up your confidence.” In fact, she advises to treat it like a new job. “The first year you might be focused on stocktaking and the basics,” she said. “Then, once you’re more confident and comfortable, you may make one or two decisions. Before you know it you will have a routine to monitor and manage your finances with confidence.” Ladies, this is particularly important if this is the first time in your adult life you’ve had to really handle the household finances and make all the decisions on your own.