Managing money in the midst of other priorities in life is no easy task. Women from all ages and walks of life struggle with earning enough to support themselves and their families, cater to the household and planning for a retirement.
We tend to look beyond financial planning so much so that most times, we choose to leave it to our significant other or partner to handle money matters. However, being financially literate and taking matters into our hands is essential. But, before we go along, what is financial literacy to begin with?
Financial literacy is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.
As women, taking an initiative to educate ourselves about complex financial decisions will in turn help us achieve our major milestones. Every informed financial decision we make gets us a step closer to that goal. In this article, we've highlighted matters pertaining women in terms of finance and tips as a guideline.
Making Informed Financial Decisions
Women are more likely to say that they are unable to save for retirement in comparison to men. Their levels in financial literacy are rather questionable. Women being caregivers are highly likely to leave their careers to cater to a family. In other words, women earn less, save less due to certain circumstances and as the saying goes, "women live longer than men." Despite it all, they still hold responsibility for their living expenses just as much as their male counterparts.
Due to "women living longer than men", they face additional costs - more long-term and overall expenses for health care in the near future. Overcoming these hurdles demands serious dedication to financial planning.
Tip: Learning how to increase earnings and make use of available resources to the fullest can help you make the most of your paychecks and approach financial choices with confidence.
More Women Struggle with Financial Literacy
Low literacy rates dramatically impact the lives of women demanding they work harder, take more time to pay their debts and sometimes, settle for earning less. Women who lack financial literacy face serious repercussions - experiencing difficulty managing income, loans, taxes and investments.
Tip: Educate yourself on the basics of financial literacy. Sought out advice from financial advisors; they are the best people to help you.
The Gender Wage Gap
The gender wage gap in Malaysia is real and it is sad. Female employees generally earn less than their male counterparts. According to the Statistics Department (DOSM)'s Salaries & wages Survey Report Malaysia 2018, the average male employee had a median salary of RM2,342 a month while women made RM2,227.
However, the gender wage gap is not due to a lack of ability on the woman. On another note, women are enrolled in university in comparison to men. Based on a World Bank report, "Breaking Barriers: Toward Better Opportunities for Women in Malaysia," it was shown that on average, women have greater educational attainment and show more actual learning. In fact, women consistently outperform men in standardised assessments of learning outcomes.
But why are they are not making as much in the labour force? Gender bias, misperceptions and discrimination are the answers. According to the Women's Aid Organisation (WAO), many women are often wrongfully penalised at work due to a variety of reasons which include discrimination and incorrect perceptions about a woman's ability to make a contribution.
Tip: This applies in general. To address occupational segregation, we must challenge gender stereotypes and expand the range of career options available to women. Remove barriers that hinder women from pursuing careers in male-dominated fields. It all begins with change.
Single Ladies
We single women have our fair share of commitments - catering to household payments, car loans and etc. Although it may seem that our expenses are less as we live alone, we tend to look beyond it at times. We may spend on life's little pleasures (shopping, travel and etc) and that's okay. We all deserve some pampering once a while.
Tip: Set a budget for yourself. Allocate the funds needed to cater to household payments, car loan repayments, credit cards, miscellaneous. Put aside cash for emergencies; you never know when you might need it.
Harsh realities of divorce
When marriages end up in divorce, women encounter severe financial consequences in comparison to men. Legal fees, tax liabilities and complications from dividing assets make divorce expensive and painful and it can take years before financial recovery is possible.
Unlike other financial matters, divorce is hard to plan for. Emotional stress and household tension accompany the financial burden. Some couples choose to have joint bank accounts and this puts you at risk after divorce if you were dependent on that one account and not have one under your own name. You're in a financial pickle. Majority of women retain custody of their children and in turn bear the struggle to make ends meet for child care due to circumstances and find themselves adjusting to a lower standard of living compared to what they were used to.
Tip: Divorce is painful and the baggage that comes with it after is harder. In terms of financial support, do open a savings account under your name and keep savings aside for yourself. Should the unfortunate befall upon you, you would have enough to support yourself and your child (if any) financially. Be financially independent, ladies.
Lack of Retirement Planning Priorities
A man who turns 64 today will most likely live on average to 83 compared to a woman's 87 year lifespan. With women having a longer lifespan, the amount of savings needed for retirement grows.
Married and single women of all kinds (unmarried, divorced or widowed) are unprepared for retirement in most cases. They tend to focus on other priorities apart from retirement. For married women, they may focus on their children's needs and looking after the household. One of the worst outcomes of not prioritizing savings is missing opportunities to leverage time in your favor. Money kept in interest-bearing accounts for years can grow into a substantial asset.
Tip: Consider options for funding your retirement and securing your financial future. Talk to a financial advisor about your current situation and how to start planning for retirement now.
Remember to always seek advice from a qualified professional before making any financial decision ladies.
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