According to AMP.NATSEM’s 25th Income and Wealth Report, women have come out on the bottom of the savings ladder, typically saving about $150 a year compared to the $620 a year their male counterparts manage to save.
Statistics suggest that while men are better savers from the age of 15 to 24, between the ages of 25 and 35 women save significantly more than men. However the buck stops, literally, in the over 35 age bracket when women’s savings fall to just $150 a year while men manage to rake in an average of $2,180. In fact, it’s not until the age of 55 that women begin to save more again.
By now you’ve probably put two and two together and come to the conclusion that starting a family goes some way towards causing the savings discrepancy. According to the report, compulsory superannuation contributions by employers and unpaid leave allow men to save more than women in their 30’s, 40’s and 50’s. Another major factor that contributes to the savings inconsistency is the fact that an average full-time working woman earns less than the average full-time working male. In fact, the Australian Bureau of Statistics (ABS) reports this amount to be to the tune of $415 more per week for the average Aussie bloke. And according to the Association of Superannuation Funds of Australia (ASFA) the average woman has just $45,000 in her super account, compared to the average male who has $130,000.
I’m a woman, what can I do?
No matter what your age it’s time to start saving.
1. Salary sacrifice
It’s estimated that the average Australian will need approximately 60% of their final pre-retirement salary each year to live on for 20 or so years after retirement. By sacrificing some of your salary now you can not only boost your superfund but also get a nice tax break too – contributions from your pre-tax salary are only taxed at 15%.
2. High interest savings
Putting away a few dollars a day not only boosts your savings but also helps you create a positive financial habit. Term deposit accounts can be useful if you simply can’t keep your hands out of the honey pot but you’ll need a minimum amount as an initial deposit – usually around $5,000 though higher interest rates for the term of the loan can be a great bonus.
3. Pay your bills on time
According to a study by Financial Finesse, only 82% of women pay their bills on time, compared to 93% of men. Moreover, only 45% of women pay their credit card balances in full each month compared to 68% of men. All this amounts to extra interest repayments and late fees – money that could easily be contributed to a savings or super account.