Women Reveal What They Wish They Knew About Money

September 13, 2021

September 13, 2021

It’s a fact: women in NZ are less financially well off in retirement than men.

Why? Recently we covered the topic of the gender pay gap. While it has dropped from over 16% in 1998 to 9.5% as of 2020, women still earn less than men. But this is just one contributing factor.

Women live longer than men - about 3.5 years longer.

They have less in their KiwiSaver fund than men.

  • One third of women have less than $5,000 in their KiwiSaver accounts. Just 4% had over $50,000, compared to 13% of men.
  • At retirement, women have an estimated savings of $144,000, compared to $203,000 for men.

Women are less likely to have other investments.

A survey by online investment platform Sharesies found that 14% of Kiwi women invested in shares compared to 25% of men.

Women have less financial literacy than men.

Over 3000 Kiwis took a financial literacy survey in 2020 - sadly, twice as many men as women answered all questions correctly. While they start out in life with about the same level of knowledge, men’s knowledge increased with age while women’s did not.

What’s the deal?

These numbers seem really disheartening. We wanted to dig a little deeper to find out what was going on.

So, we interviewed 10 women about finances. Here’s some of the common themes that emerged.

Lack of confidence in investing

“I don’t invest because I don’t feel confident in how to do so.” Libby, age 25

She isn’t alone. One survey reported that 56% of Millennial women say fear stops them from investing.

A 2021 survey of 2000 Kiwis reported that 16% of women would never consider investing in company shares, compared to 9% of men. When asked about investing in exchange traded funds, 24% of women would not consider it, compared to 15% of men. Women tend to be in charge of the household spending, but when it comes to investing they feel they don’t know what they are doing or where to start.

This could partly explain why women tend to invest in less risky assets than men. While it is good to use some caution, it also means they miss out on the bigger rewards.

KiwiSaver is the simplest place to start investing. By choosing a fund that matches your comfortable level of risk and aligns with your ethics, you can feel confident putting your money to work for you. The BetterSaver team loves digging into data, so we do all the research to make this easy for you.

Financial education came from parents and life experience

Where did you learn what you know about finance?

“From my parents and one accounting paper I took in high school.” Rebecca, age 19

“From common sense, and trial and error.” Tania, age 49

This is common across NZ. A recent survey of Kiwis aged 23-27 reported that half of the participants learned “everything” or “almost everything” from their parents, and that they expected to continue learning through life experience.

Last week, our founder Joe Taylor talked about the importance of financial education in empowering people to make good financial decisions. In NZ, we are sadly far behind in educating our youth on financial matters, setting them up for a lifetime of costly learning through ‘trial and error’. 82% of school leavers wish they had learned more about finances in school.

BetterSaver was created to give all Kiwis access to expert advice. We are here to share our research and help you to make solid financial decisions.

Start saving and investing early

“Save money and start investing at a young age when you don’t have to pay bills.” Emma, age 22

The sooner you start saving and investing, the more you will have later on, thanks to the power of compound interest. In an investment, the interest you earn is added back into your principal (the original amount you started with) and earns more interest - an effect that multiplies your money over time.

Again, KiwiSaver is an easy place to start investing, with the added benefits of your employer and the government both contributing to your fund. It’s invested for you, so once you’re in the right fund, you don’t have to worry about it (unless your circumstances or goals change).

By contributing as much as you can afford when you’re younger, you give yourself a bit of a cushion for anything that might happen in future that might cause you to decrease or hold your contributions for a while. But with a bit of foresight, you can get through any tough times with a bit more ease.

What they would tell their younger selves

“Set savings goals and start saving for a house early.” Miranda, age 27

“Set more goals, buy quality over quantity.” Tania, age 49

We need goals to focus our direction. To aim for and achieve what we want.

Maybe your goal is to save up an emergency fund. First you need to have an amount to aim for, then you need to see how much you can manage to save each week. From there you can create a timeline for when you will reach your goal. Without any of that, you’re just randomly saving, probably spending more than you should, and you may never actually get to your target - your emergency fund becomes an ongoing project instead of something you can check off your to-do list.

Shockingly, over ⅔ of Kiwi women say that they do not know how much they need for retirement and have no plan to reach a target.

There are easy to use tools like Sorted’s retirement calculator that can help you estimate how much you need to save in order to maintain your current lifestyle in retirement. BetterSaver’s fund finder quiz will take into account your goals for your KiwiSaver and how much time you have until you need to access your funds to make sure you get set up with the best KiwiSaver fund for you.

Goals can be short- or long-term. It’s important to have both to keep you on track and living life on your terms.

Get Started Today by Sorting Your KiwiSaver

It takes less than five minutes to sort your KiwiSaver fund with BetterSaver. You can be investing and saving in the time it took you to read this article. Even if you start really small, the important thing is to start now.

Getting advice from a financial adviser is an excellent way to start exploring your other options. They’ll take a look at your personal circumstances and help you set goals, a budget, decide where and how much to invest. If you want to start educating yourself, check out our top five reads.

Finances don’t have to be intimidating. BetterSaver is here to help you become a better saver - no one makes it easier than us.

Get expert KiwiSaver advice.

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