Take a fresh look at your lifestyle.

What are the SIX biggest money challenges women face?

A financial advisor shared six of the most common modern money problems women face and her simple advice for avoiding them.

Helen Baker, an Australian licensed financial adviser, says ‘women should plan, not react’ to money barriers and lay the foundations now rather than solve problems as they arise.

In her new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women, she offers a written personal financial guide to empower women to take control of their finances.

Helen says there is generally no fairer sex choice when it comes to money, and believes there are six prominent money challenges that are (mostly) unique to women.

Helen Baker (pictured), an Australian graduate financial advisor, says 'women need to plan, don't react' and build foundations for setting themselves up now rather than solving problems when they arise

Helen Baker (pictured), an Australian graduate financial advisor, says ‘women need to plan, don’t react’ and build foundations for setting themselves up now rather than solving problems when they arise

1. THE GENDER GAP/PENSION GAPS

Aussie women today still earn an average of 13.9 percent (or $242.90 a week full-time) less than men. It creates two levels of inequality: lower pay packages now and less money going into retirement.

Helen’s tips: Women need to find the confidence to get paid what they’re worth. Get advice and do it early.

Many women do not seek financial advice, often because they fear the male-dominated financial world. So they miss out on super, tax and investment benefits.

COVID-19 has shown that people can work remotely. It provides an opportunity for more women – and men – to negotiate flexible work arrangements.

Helen Baker: The Savings Tricks That Can Save You Thousands Quickly

1. Use the 50/30/20 strategy to control spending

This simple yet effective budgeting method involves dividing your after-tax income into three categories. Spend 50 percent of your net income on “must-haves” such as rent, utility bills, school fees and groceries, then set aside 30 percent for your “wants” such as dining out, fashion and entertainment. Withhold 20 percent for paying off loans or building your savings.

2. Hide your savings account from yourself

Set up a separate bank account for your savings, and ideally one that you can’t open with your current banking app. Choose a savings account that charges withdrawal fees because the harder and more expensive it is to access your account, the more likely you are to achieve your savings goals.

3. Do not sign up for products on behalf of your partner

It can be tempting to sign up for products on behalf of your partner, but it’s best to avoid taking out a credit card, loan, or mobile plan in your name on behalf of your partner. If your spouse falls behind on repayments, it can affect your credit, and if you break up or your spouse builds up debt, and you are married or in fact, you will be liable for their debt.

2. AFFORDABILITY OF HOUSING

Unfortunately, women in their 60s are becoming the new face of homelessness. They are usually single (either due to a breakup or the death of their partner) or victims of domestic violence.

Many are still working: it is not that they have no income, they simply cannot pay the high housing costs on their own.

Helen’s tips: Prevention is better than cure: if you buy a home sooner, you will have a debt-free home later on.

For women in this situation, look at your super – do you have access to housing? It doesn’t have to be big, just safe and comfortable.

Many homeless women are still working: it's not that they don't have an income, they just can't afford to pay the high cost of housing alone

Many homeless women are still working: it's not that they don't have an income, they just can't afford to pay the high cost of housing alone

Many homeless women are still working: it’s not that they don’t have an income, they just can’t afford to pay the high cost of housing alone

3. WOMEN WHO LIVE LONGER

Women statistically live longer than men. This means that women generally have to fund more retirement years than men.

Some women find more autonomy as widows, being able to travel and do things their partner would never do. But there is also a price tag attached to this.

Helen’s tips: You can help your early retirement situation, for example by using catch-up rules to increase your super balance while still earning.

Don’t count on just inheriting from your spouse once they die — often the money is gone from bad decisions or high medical bills.

4. ERRORS IN THE SETTLEMENT SETTING

Often times during a divorce, women accept an unfavorable settlement to end the emotional trauma.

They also often take the advice of family and friends who should be a source of emotional support, not money expertise.

Another classic mistake women make is taking the house they can’t afford themselves, or at the cost of a pension or other joint assets.

Helen’s tips: Women can help protect themselves before a relationship breaks down: be more active in joint financial decisions. Understand what you have before things turn sour.

Helen said that statistically, women live longer than men.  This means that women generally have to fund more retirement years than men

Helen said that statistically, women live longer than men.  This means that women generally have to fund more retirement years than men

Helen said that statistically, women live longer than men. This means that women generally have to fund more retirement years than men

5. ONLY PARENTSHIP

Single mothers are taller than single fathers at around 4:1.

Helen advises single mothers to change their mindset first, to be kind to themselves.

They often try to maintain their children’s lifestyle, but one income simply cannot provide the same as two. In addition, it is valuable to show children that money does not grow on trees.

Helen’s tips: Come up with a cash flow plan to make ends meet. If their father earns more than you do, he should contribute more towards school fees etc.

6. TAKE CARE OF FAMILY MEMBERS

Daughters and daughters-in-law usually take responsibility for caring for elderly parents. This often means sacrificing full-time work to meet the needs of their children and parents.

Helen’s tips: A granny flat is a great option to explore – you can keep parents close, but still with their own independence, and remove the travel time and expense of the commute.

You benefit from a higher real estate value and no ongoing pension costs for living expenses. Just be sure to agree on who owns what if your parents are paying to build the granny flat.

.