Nest Egg: Financial planning tips for women

We like to think we are becoming a more equal society, but women continue to face a particular set of challenges, compared to men, when it comes to managing their income and planning for the future.

I think things are certainly beginning to move in the right direction and I’m happy to say that males are well out-numbered in our company with four out of our six staff being female. Generally speaking, women face different challenges through their financial life journey, compared to men, including some of the following.

The Gender Pay Gap

The gender pay gap - the differential between the average pay of males and females within an organisation - is estimated at an average of 14 per cent in Ireland (Eurostat).

Maternity Leave and the Need for Flexible Working Conditions

Compared to men, women are more likely to leave the workforce for extended periods of time, or reduce their working hours or stop working completely, particularly those with young children. These gaps can often make it harder for women to progress in their careers as well as leave them with a reduced income.

Longer Life Expectancy

According to the Central Statistics Office, women’s life expectancy at birth is 82.8 years, versus 78.4 years for men (Life tables 2010-2012). Women also often tend to retire earlier than their male counterparts. This, coupled with gaps in employment and the gender pay gap, means it is common for women to enter retirement with less saved than men of a similar age.

A Different Attitude to Risk

Women are more conservative long-term investors than men. Risk aversion may be causing many women to miss out on greater long-term returns from their investments.

1. Be involved with your Finances.

This is particularly important where you share finances with someone. It is important that you can be financially independent just in case something goes wrong – divorce, premature death, etc.

2. Set Financial Objectives and Goals.

Whether it is travel, paying off the mortgage, funding children’s education or the level of income you wish to enjoy in retirement, these goals must be particular to you. The goals should be specific and realistic.

3. Understand your Financial and Personal information.

Understanding your current financial situation, including income and expenditure, assets and liabilities, risk attitude, tolerance and capacity all improve your understanding of your financial circumstances and pinpoint areas of strength and weakness.

4. Create a Financial Plan.

Those with a written, comprehensive plan are more likely to feel strongly confident about achieving their life goals. Financial planning is a dynamic ongoing process that requires continuous monitoring.

When our staff engage with our female clients, we put a large emphasis on education to give them greater confidence and control of their own financial future. Planning eliminates nasty surprises and shocks to your financial health and it’s never too late to start.