International Women's Day 2018Posted to Financial Capability on 08-03-2018
Women need to be less compassionate when it comes to finances and more hard-nosed about money, said Retirement Commissioner Diane Maxwell at a speech to mark International Women's Day on March 8, 2018.
Speaking to women and men staff members of Latitude Financial Services in Auckland, Maxwell says women often fall into a trap of feeling sorry for someone in financial strife and going guarantor for friends, family and colleagues. If the borrower defaults the guarantor is left with the debt.
"Men, on the other hand, will say `Yeah, nah, I’m not going to go guarantor for you on that.' Women need to lose the compassion and think about their own financial future. You can't trust karma to pay the bills down the track."
This extended to a tendency for some women to believe that "the universe will provide" and not planning for bumps in the financial road, or retirement. New Zealand's ageing population meant that in 20 years the cost of superannuation will have more than tripled from $13 billion today to $42 billion, and there will be significantly fewer workers to pay for it – there are currently 4.4 people aged 15-64 for every person 65+, and by mid-century that is projected to fall to about 2.4
"The brutal truth is that we don't want today's young women, daughters and granddaughters, to reach retirement with nothing. They need to own their financial future."
Asking for a pay rise was an example of how women treated their worth differently to men. "I've had a lot of men over the years ask for a pay increase, but women hardly at all. You need to know your market value, plan an explanation of why you're worth more than you’re getting. Then you can walk into that meeting confident, prepared and self-aware."
Women are more likely than men to say that money doesn't matter to them "but what it buys you does matter. It buys you a car that won't break down, life insurance to protect your whanau, or that holiday with the kids that means so much."
Maxwell advised women to read widely to improve their baseline knowledge. "That will improve your employability, your market value, and your pay."
Next: A train ride conversation about wills