Women In The Black

What Is Financial Security?

What is financial security

By Tamia Gallego

What comes to mind when you think of financial security? Do you focus on building assets only or do you think about managing debt as well?

In order to achieve financial security you need to have a level of financial education or literacy to help you make informed decisions about the use and management of money.

There was an ANZ survey titled “Adult Financial Literacy in Australia” which was published in December 2011, which found that the groups with the lowest level of financial literacy were people under the age of 25, people of the lower income scale, and women. Coincidentally women also formed the demographic group with the lowest level of financial literacy in four previous surveys conducted from the years 2002 to 2011. This is an alarming trend, which needs to change.

Several studies have shown that many women are poorly managing their retirement accounts. Women are now the new working poor, remaining or re-entering the workforce into their 50‘s, due to having insufficient super balances, forcing them to work longer, and cutting into time that is meant to be enjoyed for retirement.

Times have changed from the time when a woman was completely reliant on her husband for retirement plan. Women can now decide how much to save for retirement and how to allocate towards their retirement wealth. Women are faced with lots of choices in the markets with products and terminologies that are highly complex, and sometimes confusing. It may feel like you need an economics degree just to make heads or tails of the situation, but that’s not the case, you just need to educate yourself.

Debt Management

When we assess financial security and the impact of lack of financial education on our money management behaviour, we need to consider debt.

Credit has become available to many of us and decisions about how much to borrow have shifted to us. Credit cards are an example of readily available credit. Think back to your days in university or college and you’ll probably remember all the credit card companies who set up at the quad or front campus during the first few weeks, selling the idea of financial freedom in the form of a plastic card, and for your effort a free coffee travel mug or pen for signing on. Credit cards offers consistently arrive in the mail or via emails, and we can accept by filling in the form, which we resubmit and voila, a couple of weeks later a card arrives. It appears no-one checks to see whether we are able to service the debt.

Apart from asset building, another way to help you achieve financial security is to learn how to manage debt. If history has taught us anything about women and finance, it is for us to look at both sides of the balance sheet, which is to look at assets and debts, otherwise known as your net worth. Just as it is important to build assets, it is equally important to effectively manage debts.

The December 2011 ANZ “Adult Financial Literacy in Australia” survey is delivering one apparent message to women. We can make informed decisions regarding matters of money by having financial knowledge and skills, coupled with the right attitude and respect towards money.

What is your financial security?

About WITB

Australian community dedicated to improving financial literacy through media & events designed to connect, encourage and inspire all women. Join today! View all posts by WITB →

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  • Hiedi A

    Financial security to me is peace of mind.

  • S L

    Nice blog , would of made the blog bit longer, loved reading it though.

  • Fatima

    Financial security is very important to my family, especially with one of our children with special needs. I work only 20 hours a week as I need to take my child to health specialists regularly. Between my husband and I we have super even though I don’t have much in mine. I know it’ll affect us financially in the long term but we don’t have much of a choice, our decisions are simply the reality of life.

  • WITB Team

    Thanks for your feedback. At WITB, we try to make our posts short and succinct where possible as we don’t wish to lose impact with our readers. But it is lovely to hear that you were left wanting to read more. Thanks once again.

  • WITB Team

    Fatima, thank you for sharing your story. It sounds like you are a strong woman doing an incredible job. Credit to you x.

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