A new survey, released just ahead of International Women's Day, is a stark reminder that women must empower themselves with financial knowledge and be involved in financial decision making to ensure the best financial and housing decisions are made during difficult times.
The study, which was commissioned by non-bank lender State Custodian Home Loans, showed nearly half of single women surveyed (46 per cent) and nearly two-thirds (60 per cent) of single mothers said poor financial literacy would prevent them getting back on their feet in financial and housing terms after a difficult life event.
The survey showed that one in three women (32 per cent women in general, 29 per cent single women, and 34 per cent of single mums) would be reluctant to sell the family home due to a "strong emotional attachment" after a crisis, even if it meant getting them out of debt.
“The home can hold great emotional attachment and is familiar for kids,” says State Custodians General Manager, Joanna Pretty.
“When women lose their jobs or get divorced, often they want to hold onto a home so they’ll feel secure. However, you need to think about it in practical terms. If you can’t handle the mortgage and it’s going to financially wipe you out in two years’ time, get advice and consider your options,” she said.
Pretty says "it’s vital single women financially educate themselves in the event of a crisis. This also applies to women in a couple, who leave money matters up to their partner because they’re also at risk if they suddenly become single and don’t know how to handle finances.”
Pretty advises that women can empower themselves with knowledge by talking to various financial institutions and experts, such as financial advisors or accountants.
“Find people who can give you the right information and products," she said, adding that "trust” is crucial in difficult times.
On International women's Day, here are some steps women can take to financially empower themselves.
In preparation for a financial set-back
1. Have savings that can be used in an emergency.
Aim for at least three to six months’ worth of savings that can support you.
2. Live within your means.
Understand your essential and non-essential expenses, and be honest about your present and future earning capacity. Only spend what you can afford.
3. Educate yourself financially.
Look at how well your super is performing, make sure your bank accounts aren’t attracting unnecessary fees, consider re-negotiating your mortgage to a lower rate. Consider seeing a financial planner to map out your financial goals.
In the aftermath of a financial set-back
1. Get advice from experts.
Contact a range of experts such as financial advisors, accountants and other institutions, and explain what’s happened. The more you talk to people, the more likely it’ll become clear who can best assist you.
2. Be realistic.
Work out what’s do-able and what’s not. If you sell the family home, you may not be able to afford to buy where you want to live, so proceed carefully.
3. Work out how to invest your money.
Be open to suggestions on how to move forward. For example, if you don’t want to move from your neighbourhood, consider renting and buying an investment property elsewhere.
The research was conducted by Galaxy Research, and involved a survey of 1,005 people nationwide.
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