Kerry Ashbrook, Founder of Life You Choose built a successful corporate career, and bought her 11th house in 2013. However, Kerry wishes she spent more time educating herself financially and ‘building her tribe’. She firmly believes that she could be in an even better financial position if she had planned better! Now through Life you Choose, she wants to share her lessons on women and finance. Kerry loves sharing her financial wisdom with other women to educate them and give them choice to live the life they want by creating financial freedom.
We need to educate ourselves, our daughters, nieces and every woman in our lives
We know the gender pay gap. As at Nov 2016 the full-time average weekly earnings of women vs men is 16% less. This needs to be understood and addressed. However, there is more we need to understand and plan for.
For most Australian Women, their financial position is actually much more dire than the variation in weekly earnings. 54.3% of all females employed work part time. So, while the average weekly total cash earnings is $1,369.70, part time earnings are only $633.60. The part time figure is what women are more likely to be earning as two in five women work part-time. If you have a child under 5 then that increases to three in five.
The last census in 2011, provided a break-down of income for women by age demographic
We know that self-reporting may not be entirely accurate. However, in 2011 during our three key earning decades (25-34, 35-44, and 45-54) 30% of women had income equivalent to the single person’s pension or less. Only a little over 20% of women were earning the average weekly wage.
Income is important
Income doesn’t only impact how we live today, it has a compounding impact on how we will also live in the future. As does our spending. What you earn directly impacts your superannuation contributions. We know the average woman does not have enough super to retire on.
1 in 4 women aged 25-34 (24.8%) were not in the labour force in 2015-16. This remains reasonably consistent. 23.1% not in work at age 35-44 and 21.5% out of the workforce aged 45-54, until we hit age 55-64 when 41.5% are not employed. This would be great if it were by choice and we had the money to comfortably retire.
At age 55-64, we are not eligible for the pension (and I am yet to meet a women who would define the pension as comfortable).
If we are this age now, we could access our super. However women aged 55-64 have on average $180,013 in super, meaning many have less. According to the last census by this age, almost 1 in 3 of us are single (31%) and 29% of us have already been through a separation, divorced or have been widowed. Most of these life events negatively impact our financial position. Even though we know statistically that they may happen to us, we do not financially plan for them.
The other critical impact of income: it directly impacts our ability to access DEBT. We need borrowing capacity to buy our own home or any other investments that may provide us with other income in the short or longer term.
Marriage, babies and divorce impact our finances
In 2015, women marry at age 29.8 on average, and have 1.81 babies at an average age of 31. 1 in 3 marriages end in divorce, with couples separating after 8.4 years and divorcing by 12.1 years. Almost 50% of divorces involve children under 18. Women are still the primary care givers, not only of their children when they are young, but potentially their parents as they age as well.
On average we get divorced when we are 42.7 years. By this time if we have not been working, or working part time, it is increasingly difficult to change the financial trajectory we are on. Many women lose their confidence after having a career break and struggle to re-establish themselves in their industry.
You can change your financial future
I have recently sat through some discussions with a woman who is separating from a de facto relationship she has been in for five years. This relationship is going to negatively impact her financial position. She has lost not only the last 5 years of wealth creation, but will be left with much less than she had 5 years ago.
Having an awareness and understanding of what impacts our financial position now and potentially in the future, allows us to plan, understand the risks and think through contingency planning.
We spend more time planning our next holiday than planning our life and our financial future. The life we choose today will directly impact that of tomorrow. If we put aside just the cost of 1.5 coffees per day from 22 to 65 years, we will have an additional $234k to retire on. Potentially much more if we learn how to invest.
We need to look at our financial health in the same way as our physical health
- Learn what is good for us. (We hear about diet and exercise from an early age).
- Do it every day, if you are consistent it won’t need to be as dramatic a change. (Look at what we are earning, spending, investing).
- Spend time with like-minded people, build your tribe.
- Plan for life events well before they happen. (There is a strong likelihood we will have a relationship, children, however it is also likely we will end up on our own, if we live long enough).
- Don’t beat ourselves up if we fall off the wagon. Refocus. (We all need a holiday!).
- Reward ourselves on occasion, but just living in the moment will not end well.
Kerry Ashbrook, Founder of Life You Choose, is passionate about women having their ‘greatest life’ and having the money to choose to live it. Until recently, Kerry spent her career in the corporate world, and having bought her first property at 27, she also became a keen property investor. Kerry now wants to share her knowledge and experience about what she has learnt and observed along the way, so all women can have the confidence, support and money to live the life they choose.