Why Young Women Need Financial Independence

Why Young Women Need Financial Independence

International Women’s Day is an opportunity to celebrate women, but also highlight issues which disproportionately affect them. A big one is money. Kate shares why financial independence is important for young women and what we can do about it.

Some people get offended by me talking about money. But the reason I talk about it is that not all of us have the luxury of not having to worry about it. 

Money is something which disproportionately affects women because we don’t have as much of it as men. If you think this doesn’t affect you in 2020, Quality Indicators for Learning and Teaching (QILT) research released in October 2019 found that on average, female university students in Australia graduate on $3,200 less than male students. On average, Australian women are paid 13.9% less than men. And that not only affects how much money women have right now but also what they end their working lives with. Currently, women in Australia retire on around $122,848, compared to men who retire on around $154,453.

If you’re wondering how we got here, our childhood heroines are in part to blame. Disney princesses’ stories most often end by coupling up with either a Prince charming or nice guy character whose presence means a happy-ever-after and the end of our financial struggles. It’s rare that the story will focus on a woman ending up financially independent and reliant on herself for a happy ending. 

Another consideration is the fact that not all relationships last forever and that many of us who are loving our relationships in our 20s won’t be holding hands with that same person in our 70s. Delegating financial control to someone else now can mean it will be harder to manage your money yourself when your relationship status changes. 

Women also tend to bear the financial brunt of joint life- decisions like having a child. You face two options – have your salary wiped out by expensive childcare fees or stay home more, working part-time or not at all for a few years. Anyone who has just pushed a human out of their body absolutely deserves to take some parental leave, but the issue is that there is no legal requirement for employers to pay your superannuation while you take that leave. And should you work part-time, you cut back not only on your salary but also your superannuation payments. 

Those choices, freely made or forced by circumstance, add up over time and hurt our future selves. Older women in our community aged over 55 years are now the fastest-growing cohort at risk of homelessness in Australia, with the census reporting an increase in homelessness of 31% from 2011 to 2016. We owe it to our mothers, our sisters and our daughters to address this situation now.

The answer to redress the financial gender imbalance is financial independence. This means having enough financial security so that you are free to make your own choices in life. Independence is freedom to choose what you want to do. 

If you’re motivated to get yourself in a position where you don’t have to worry about money, you can start your journey of financial independence by monitoring your spending with a budget and setting yourself some money goals. Whether you earn a lot, or a little, setting budgets and goals that work for you means everyone can achieve financial independence.

This International Women’s Day, I want to see more women taking an interest in their money so that our female students graduate on the same salary as men, our mothers retire with an equal superannuation balance to our fathers, and to reach the points where your gender does not determine your financial future.