With the recent release of the World Economic Forum's 2014 Global Gender Gap report, I seized the opportunity to attend a meeting with New Zealand's Retirement Commissioner, Diane Maxwell, to hear her views on what women can do to reach financial parity with men. Here are her top tips.
1. Ask for what you want
When it comes to finances, men tend to ask for what they want more often than women, says the Commissioner. Men are more likely to negotiate a higher salary when offered a job, ask for raises more frequently, request lower mortgage interest rates from their banks, suggest a lower price than the sticker price on the car that they want…you get the idea. Women need to start asking for what they want, too.
Always do your best to find out the market rate for your role, the salary bands at your company, what others doing similar work to you are earning, etc to inform your salary negotiations. Set up a meeting to discuss your accomplishments (you are keeping track of those, right?) and ask for a raise at least annually. Before you accept a new job offer, take time to consider the total benefits package and negotiate for what you want.
Negotiation tips - Lean In
Salary comparisons - Glassdoor
2. Start saving now
While women tend to be better at balancing their budgets and living within their means in the present, observes the Commissioner, men tend to be better at saving for the future. Around the world, though, women live longer than men on average, which means we should actually be saving more in preparation for a longer retirement. Even storing away little amounts on a regular basis, when combined with the power of compound interest, can make a big difference in the long run.
Set it and forget it - Set-up an automatic payment to make deposits into a high interest savings account each time you get paid and sign-up to take full advantage of any contributions via your company or government’s retirement saving scheme.
Savings forecasting - Suze Orman
Tips on saving - GoGirl Finance
3. Reassess your beauty routine
Be honest - how much do you spend on ‘beauty’ each month? If you have a monumental collection of beauty products and elixirs cluttering your bathroom shelves, you aren’t alone. The Commissioner commented that while a ‘beauty’ line item is almost non-existent in most men’s budgets, for some women, it can make up a huge proportion of their regular spending. Many brand-name beauty products and treatments prey on common female insecurities about their appearance - and are charging a premium for it.
As women, we need to seek ways to become more comfortable and confident with who we are and how we naturally look.
“As consumers, we need to push back,” says the Commissioner. “When the salesperson in the beauty isle tries to get me to buy some new five-step system, I say, ‘Look, if you can’t figure out how to fix my skin in less than three steps,’” she joked, “‘I’m not interested.’”
Review your expenses for opportunities to reduce your spending. For beauty items that you simply must have, look for generic brand alternatives (these are often the same as the brand-name products but less expensive because they don’t have the same level of marketing and packaging spend attached to them) and commit to fully using a product before purchasing a replacement.
Budget analysis and tracking tool - Mint
4. Protect yourself
While it may not sound very romantic, taking steps early on to protect your financial assets in your relationship could save you from a potentially devastating situation down the road. The Commissioner recounted many stories she has heard from women who have faced financial ruin later in life due to unforeseen changes in their relationship circumstances. Interestingly, while women tend to have reservations about raising the concept of financial agreements with their partners, men tend to see setting up such agreements as pragmatic rather than unromantic.
If you have entered a relationship with significant savings, property or other assets, speak with a lawyer about whether setting-up a property agreement is right for you.
Advice for changes in life events - Sorted
Disclaimer: The information provided on this website is general in nature only and does not constitute personal financial advice.