ADVICE: How women can protect their finances during the pandemic

Australia’s gender equality gap is expected to worsen during and following the coronavirus pandemic, leaving women with greater financial risks than their male counterparts. In this interview, Natasha Janssens, who came to Australia as a refugee at 18 years old and now runs Women With Cents, shares what the risks are for women and what they can do today to protect their long-term finances.

  • The pandemic has led some to believe we’re gearing up for a mum-cession. Do you agree with this?

The statistics so far certainly do indicate that women are at greater risk of job loss, in large part due to being over-represented in part-time and casual roles that are at higher risk of being retrenched. Our own surveys in the Women with Cents community do indicate that in two-parent households it is generally the mum who is juggling work and homeschooling responsibilities while in many cases dad carries on work as usual. Not to say that this is men’s fault by any means but it definitely points to systemic and cultural issues that need to be addressed.

  • What are the financial pitfalls women commonly come across that have been further exacerbated by the pandemic? 

In general terms, women tend to on average earn less than men, which results in women having a reduced capacity to save as well as having less super for retirement (currently women retire with about 32% less super than men). Women are more represented in casual and part-time employment, and take career breaks in order to start a family and care for sick and elderly relatives. This compromises their financial independence and ability to earn their own income, as well as placing them at greater risk of financial abuse by their spouse.

All of these factors are currently being exacerbated by the pandemic. For example, 14% of women who have so far accessed their super due to COVID have emptied their super accounts. When you consider that women are currently retiring with 32% less super than men – emptying their super accounts, reducing work hours or job loss are only going to contribute to widening that gap, unless we take corrective measures to do something about it.

  • How can women facing these challenges overcome them? 

By becoming aware of the challenges and risks and taking proactive steps. For example, exhausting all other avenues of financial support prior to accessing the second tranche of super withdrawals. Networking and building their negotiation skills in order to bridge the pay gap and make sure they are being paid what they are worth. Becoming aware of the signs of financial abuse and reaching out for help and support. Making a conscious effort to push back on outdated social norms and working with their spouse to make sure that they are sharing the parental and mental load more evenly so that women and mothers aren’t the only ones reducing their hours and taking a step back from their careers in order to manage caring responsibilities during COVID. 

  • What do women need to be doing financially during this time to prepare for 2021 and beyond?

Doing everything possible to build up their emergency savings buffer in preparation for the recession that is to come – this could mean taking on extra work while it is still available, shopping around for a better deal on their bills, selling the second family car and any other items that they can go without, but taking action swiftly and aggressively in the short term.

Long term – Networking and diversifying their skill set in order to preserve their ability to maintain employment – there are many courses on offer at the moment at a heavy discount or for free.

If staying at home, taking advantage of super contribution splitting with their spouse so that they are sharing the full pay package evenly not just splitting the take-home pay. Preserving the insurances they have including those held in super so that they are well protected in the event of a perfect financial storm. Taking proactive measures to grow their money and wealth long term rather than taking the passive approach – it may have worked during times of economic growth, but the same can’t be said for navigating a recession.

About the expert

Natasha is the author of Wonder Woman’s Guide to Money and an award-winning finance broker and money coach. Her passion for education and helping others led her to start Women with Cents – an online community dedicated to empowering Australian women through education. Natasha is on a mission to ensure that all Australian women have access to professional financial advice, regardless of their age, income or circumstances.

Image description: Natasha is sitting on a black, leather lounge chair with her legs crossed. Her feet are on the lounge, with her black high heels on the floor. She wears a pink blazer, white top and blue jeans.