Financial confidence, women and their money
It doesn’t matter whether you’re single, in a relationship or sharing accommodation, it’s up to you to be fiscally responsible for your own financial situation. It may be a harsh reality, but most females can anticipate being single at some point in their lives, and need to plan their finances accordingly.
Facts and figures
A new book, called Bank On Yourself: Why Every Woman Should Plan Financially to be Single, Even If She Is Not, validates that 90 per cent of women will need to manage their own finances, simply because they chose to remain single, or due to death and divorce.
Co-author, Leslie McCormick, says, “While general financial planning principals can apply to both men and women, what is different are the circumstances that are more likely to impact women financially. Women have longer life expectancies, and the expense those extra years bring, and the wage gap, make it harder to build wealth. Single women need to plan accordingly.”
The tides are changing, but, sadly, there are women who have never managed money for themselves, and relied on a partner to do so – someone else paid the bills and saved for the future.
Although there have been improvements over the last few decades, the wage gap continues to exist, and women make less. Statistics Canada reports, that despite the fact that women make up almost half of the work force (48 per cent), they still make 87 cents for every dollar compared to what a man makes for the same job. And while maternity/ paternity leaves can now be shared, statistically women who work full time, take more time off to have children and care for them. To help make ends meet, women are more likely to take on part time jobs at minimum wage.
In order to make up for this shortfall in working years and in salary, women need to save more for retirement. The average lifespan of a man in Canada is 79, whereas for women it’s 84. This means that women have to plan for a longer retirement with less money. As a result, women should be saving more during their working years. TIAA, a retirement service provider in the U.S., suggests that for every 10 per cent a man saves, a woman should save 18 per cent of her income, before taxes, to have the same lifestyle as her male counterparts.
Every adult should know how much it costs to run a household – not just the bills and their due dates, but also about budgeting for unexpected costs. The authors of Bank on Yourself, have this advice, “Take your financial inventory, assess your income and expenses. Identify your vision for your future, put a plan in place to make your vision your reality, set your budget, track your progress, review and repeat.”
According to Bank on Yourself, only 31 per cent of women say that they are confident in their financial ability, compared to 80 per cent of men. The Financial Consumer Agency of Canada, and ABC Literacy Canada, provide great resources to help build your financial literacy.
Rubina Ahmed-Haq is a journalist, personal finance expert and HPG’s finance editor. She appears on CBC TV and radio, CTV Your Morning, Global Toronto, and writes for ratesupermarket.ca. Follow her @alwayssavemoney. AlwaysSaveMoney.ca