Lifestyle, security, peace: what women really want from their money


Published on

What do women really want when it comes to money?

To borrow some lyrics from the Spice Girls: "I'll tell you what you want, what you really, really, want." It's lifestyle, security and peace.

For more than a decade, I've been delivering professional financial advice and seeking to enhance women's financial literacy so that they can stand on their own two feet in all aspects of life.

what women want money

There's a disconnect between many women and the financial planning industry, I found when researching my master's degree in financial planning: a perception that financial advice is all about dollars and the analytical sense that make investments happen, and not what matters to women.

I believe that financial planning is all about lifestyle, now and in the future.

I also believe that the right financial foundations and the right mindset can avert many money mistakes.

A state of mind

The first constant is a mindset that I refer to as the 4Cs: clarity, control, certainty and confidence. Women are wired for security.

We thrive when we have clarity and a sense of control. With a better understanding of what our "now" and "future" look like, we gain certainty - and with certainty comes confidence.

We can achieve, we can tackle and we can overcome difficult situations. We can do whatever we believe in.

Financial foundations

The second constant is the need for the same five financial foundations whether a woman is in her 20s or 80s (albeit with different emphasis).

These foundations revolve around: a spending and investment plan, insurances, estate planning, superannuation and an emergency fund for the unexpected (good or bad).

This mindset and the foundations work together. You control your spending and investment plan, superannuation, insurances, estate planning and emergency fund.

Ensuring all five financial foundations are in place affords protection for your investments and the lifestyle that your investments are working to achieve. Let me share a few tips on life's financial kickers.

The rollover risk

It's common for women to change jobs frequently early in the career, and few jobs are for life these days anyway. With new jobs, it's often common for a new superannuation account to be opened.

It's easy enough to lose track of super accounts when this happens - hence the tax office's efforts to reunite people with some $17.5 billion - but the answer isn't as simple as consolidating those accounts into one.

Total and permanent disability and income protection insurances are typically tied to superannuation accounts but can vary widely. Consider this before "just rolling over". Once it's rolled over, the insurances are usually gone.

If you have any health history this could be a big mistake. Ensure you have all the right insurances in place as per our five foundations: life, TPD, income protection and trauma cover, private health and general insurance.

Check the level of cover is appropriate - not over-insured or under-insured. Check you are claiming a tax deduction for income protection. Check the waiting periods and payment periods and the policy definitions or have an adviser do that for you.

A little bit but often

I recently had a conversation with a friend's 20-something daughter who was adamant that she couldn't invest because she wasn't "rich". I pointed out that she was perfectly positioned to take advantage of compounding.

She could put an extra $20 a week into her superannuation each year and that alone could grow to $75,000 over 30 years.

As her earnings are likely to be quite low, there is the opportunity to be boosted with the government co-contribution giving her another $500. It will be a long time before she can access her superannuation (pros and cons).

She can also consider investing outside superannuation with similar amounts to get started. Depending on what the saving is for will determine how it should be invested - term deposits, managed fund, high interest saver, bonds, etc. Slow and steady pays off, without sacrificing lifestyle.

And baby makes three

I often suggest to couples who are planning to start a family one day that they adopt a "live off one income" strategy long before conception.

That way, when parenthood happens the reduced income isn't as big a shock to the system. How does it work? You both live off one income and use the other to build a home deposit or pay down the mortgage.

Divorce assets

About 50,000 Australian couples call their marriage quits every year. They often think in terms of "before" and "after". I see four clear phases - pre-settlement, negotiation, post-settlement and rebuild - and that's the approach that's needed in coming to a financial settlement.

The biggest money mistake I see is people not seeking professional financial advice before agreeing to the carve-up of assets.

Lawyers know law. They are not authorised to give financial advice.

A licensed financial adviser with divorce planning expertise can scope a client's goals and values, assess assets in a settlement pool that could best work to achieve those goals and provide realistic options and easy-to-understand calculations of what a good (and bad) asset split could look like and mean, providing a base for informed negotiations.

This takes emotional heat out of settlement talks - and can save time, money and further stress.

While on the subject of divorce, overlooking your super beneficiary nomination could be another unexpected windfall to the ex.

When you are married, the likely nomination on your super is your spouse; likewise life insurance. Divorce nullifies wills but it doesn't have this impact on beneficiaries. Your ex may still receive the payout from your super fund unless you write to your fund and stipulate otherwise.


An OECD report a few years ago showed Australia had a high rate of firing workers when companies downsized compared with many other developed nations.

For some women, the offer of a redundancy is a dream come true; for others a source of immense stress.

Know your spending and saving habits along with tax and debt obligations. How long can a redundancy package keep you going if another job fails to materialise (and it can be difficult, even when you are highly skilled)?

The OECD report found that while 70% of Aussie workers laid off found a new job within a year, one in three took pay cuts.

If you see a redundancy coming, consider whether you should proactively salary sacrifice some of your wages in superannuation to get some tax savings and build for your long-term future.

Ensure you have those five foundations in place, particularly the emergency fund and the spending plan to make sure you have plenty to back you up until you find the right job. You can always put more into super again when you are working.

Depending on your age, you may be able to access superannuation but you can't guarantee it, so be careful how much gets locked away.

Fortunately, new legislation from July 2018 allows you to carry forward your concessional contributions for up to five years if you have a balance less than $500,000.

Retirement in sight

Women face quite a challenge as retirement looms, what with longevity in our favour and the 52.8% gender superannuation gap seriously against us.

Financial circumstances and lifestyle are intimately connected, and many pre-retirees frame their goals in terms of financial comfort and security - not having to worry about money - while maintaining the standard of living and enjoying a few treats.

I suggest before retirement becomes your reality, you take a couple of weeks off and see what you spend. List everything, including your fixed bills (rates, electricity, phone); variables but necessities such as groceries and petrol; and fun.

Did you get stuck into a project you've been meaning to do? Cost it!

Eating out? Great but include the cost. Taken off on a mini-break? Excellent - include it.

This is a snapshot of what life can be like in retirement when you don't have to ask permission for time off work or think about annual leave.

When we actually track our cash flow, we see reality. Will you have enough?

Get stories like this in our newsletters.

Related Stories