Although we are living in an age where equality matters now more than ever, it is no secret that women still make less than men. The good news is the wage gap is closing, but it’s not happening quickly enough. What many don’t realise is how much of a difference having their finances in order can make to narrow this gap, especially for female entrepreneurs.

Financial literacy for women is important in this regard. The reality is that without financial literacy, women are more financially vulnerable and may be missing out on opportunities to earn more money.

What Is Financial Literacy?

Nowadays, women are constantly told to be financially literate everywhere, be it the workplace, in the media, and even in schools. But what does financial literacy mean?

Financial literacy is defined as the knowledge and skills that people need to make sound decisions about money. Women are more likely to struggle with financial illiteracy than men. The average woman has less money saved for retirement and may have a poor credit score. According to a study, only 48% of Australian women are financially literate. Women may be more likely to find themselves in a difficult financial situation than men due to the wage gap and other factors. Financial literacy for women is important because it can help you understand your finances, make good decisions about them, and plan for their future.

Financial literacy has been defined as the knowledge or skills that allow people to effectively manage their personal finances. It encompasses both understanding how money works and knowing how best to use it. When you’re financially literate, you know how much money you have coming in at the end of each month.

Why is Financial Literacy Important?

Financial literacy is the knowledge of how to use your money wisely and effectively. This includes understanding budgeting, one’s credit history, spending and saving habits, risk management, taxes, investments and retirement planning. In today’s world where our lives are becoming increasingly complex, it can help you take control of your financial future.

Women make up the majority of people living in poverty, with many of them being single mothers. In addition, their life expectancy is longer than that of men. Financial literacy is necessary for everyone, especially women in business, because it can help you make better decisions about your money, which can lead to an increase in savings or even retirement benefits. The average woman worries about her finances more than the average man and feels that they lack the financial knowledge to make informed decisions.

Financial literacy enables women to have a good grasp on their finances so they can make sound financial decisions that can cater to their current situation as well as manage any risks that may arise from their choices and affect their future.

Women Are Paid Less

The gender pay gap is a worldwide issue, and Australia isn’t an exception. In fact, the wage difference in Australia is one of the widest gaps out of all OECD countries. Australian women earn only 72% of what men earn for work that’s comparable in skill level.

The wage gap starts at a young age. By the time they’re 17 years old, girls are earning 15% less than boys for doing similar jobs. As workers get older, these numbers continue to grow- not just because men start earning more as they move up the ladder but also because women take on different roles or have children, leading to them taking less demanding positions with lower wages over time.

One way women can find ways to be paid more is by negotiating their salaries with potential employers. Negotiating can help them land higher pay and better benefits packages. By learning how to negotiate salary in the workplace, women can know if getting a pay raise is possible when they ask for it. And if negotiating doesn’t work, maybe it’s time to look somewhere else for a job with a better pay.

Women Invest Less

In Australia, 54% of women invest less than men. One reason why more Australian women don’t invest might be because they are less confident about their investment decisions than men. Another reason is a lack of encouragement from parents or partners, who may have encouraged them to make investments earlier on in life.

There is also a lack of financial literacy among these women, which can lead to bad decision making when it comes to investing money.

According to a study conducted by the Australian Treasury, it was found that women on average had around $25,000 in their retirement accounts and men had nearly twice as much at $45,000. Women who are mothers of children under 18 were more likely to have lower balances than those without kids. The findings of this study highlight how vital it is for women to take control of their finances and start investing now.

Women Turn Out To be Better Investors

It’s no secret that women are underrepresented in the business world. In addition to being outnumbered, they often have less access to finances and mentorship than their male counterparts. But when it comes to investing, the tables turn.

Women outperform men by a long shot. According to a recent study from NerdWallet, female-run investment accounts had an average return of 11% over a 30-year period as opposed to 7% for males.

What’s going on here? The answer is simple, women tend to be more cautious investors who make better decisions about what companies they invest in. Their tendency towards safer investments also means they’re able to stay invested longer and ride out market dips without panicking or selling at a loss.

Women Control Spending

Women control $1.2 trillion of the $2 trillion Australian economy and are increasingly making decisions on how to spend their disposable income, according to a new report by CommSec.

The report surveyed more than 1,000 women aged 18-65 with higher incomes and at least one child under 18 years old. It was found that many female breadwinners in Australia were focused on saving for their children’s education as well as retirement planning.

It also revealed that women were less likely to take risks with their finances because they often had someone else depending on them financially, such as a spouse or children. The findings suggest that gender diversity is a crucial consideration for financial advisers to understand consumers’ needs and behaviours.

Our Final Thoughts

In conclusion, teaching and empowering women about finances can help them make smart financial decisions. It will be a great step forward for our society if we can eliminate the gender gap in terms of wealth accumulation and have more women as entrepreneurs.