Survival of the (financially) fittest: men vs women

Who is better at managing their money, and why?

With a financial fitness index of 114, as a nation we’re pretty average when it comes to managing our money.

But break that score down by gender and an interesting (if not totally unexpected) story emerges: women, on the whole, are less financially fit than men – with an index score of 110.4 compared to men’s 117.5. In fact, almost one in three women are financially unfit, compared to a quarter of men.

So why is this the case? The index is based on your financial control, resilience and freedom. Why do women – in our supposedly equal society – have less of these things?

A concerning combination

A series of contributing factors emerges from the research – from an inability to cope with lifestyle debt (one in five women cannot comfortably pay off their short-term debts each month) to worries about the future (44% of women say they won’t be able to retire when they want to, compared with 36% of men).

Women are also less likely to be able to afford to do the things they want to do (38% to 28% of men), including taking regular holidays to places they like and living in a home and area they like.

More than two thirds say they could not afford to leave their job if they wanted to, compared to just over half of men. Most critically, more women (12%) than men (7%) say that if they lost their job, they would not be able to cover their usual expenses for even one day without increasing their debt.

And while most Australian adults are chronically underinsured, women are worse off than men. Just 30% of women have life insurance, compared to 38% of men.

So how equal are we?

When it comes to financial fitness and wellbeing, the situation could look better for Australian working women. And it’s not really surprising, when the 18.8% gender pay gap in Australia means that for every dollar a man earns, a woman earns 81.2 cents – that translates to a $300 difference each week.

It’s not just about how much women earn, but also how much they work. For all our talk of gender equality, women still end up doing the majority of the unpaid caring labour in families, at a time in their lives when their male counterparts are advancing in their careers. Women are much more likely to make adjustments to their work arrangements to fit around their caregiving responsibilities than men are – reducing their hours or switching to flexible arrangements. And four in five single parents are single mothers, which shifts the cost of childcare and education disproportionately onto women.

This is not helped by the fact that women feel less financially literate than men – a fact backed up in the 2007 MoneySmart report ‘Australians understanding money’. On the flipside, women are more likely to recognise the importance of learning more about understanding financial language than men are – so there’s that!

All of this affects a woman’s financial fitness – and it helps to explain the disparity. As to what to do about it? That’s a much, much longer blog post. But whether you’re a woman or a man, you can start taking some individual control.

Test your financial fitness Try it and see how you compare. It'll take you two, maybe three minutes tops

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