How being a woman impacts your financial wellbeing


By Meg Wedlock, who has just completed Master of Business Studies (Finance) at Massey University, focused on the gender gap in financial capability and the impact that has on our retirement.

What’s the issue?

For a lot of women both in New Zealand and globally, concepts like depreciation, compound interest, stock market fluctuations and KiwiSaver fund planning are difficult to comprehend. There is a perception that financial management is a ‘man’s domain’, meaning women are ending up in a worse financial position.

When you hear the term “financial capability”, that simply means someone’s ability to understand financial concepts such as saving, investing and budgeting and take action using that knowledge.  Unfortunately, despite the importance of financial capability, a number of people lack financial knowledge, and are unable to understand financial concepts that apply to their day-to-day life. The situation is worse for women – global research shows that women are less likely to be financial literate than males.

Among New Zealand adults, research shows that 74% of males are considered financially literate compared to only 52% of females. Not only are we women less financially literate, but we also have more difficulty obtaining high quality financial advice, leaving us under-prepared and at risk of making poor financial decisions. Another survey in New Zealand found that, for 16-65 year olds, 63% of women calculated prices, compared costs and budgeted on a weekly basis, compared to only 51% of males, and yet females still maintained lower average financial knowledge rates.

Why is this happening?

This gender difference tends to be impacted by a combination of the gender pay gap, concentration of women in part-time employment, career breaks due to child-rearing and social stigmas regarding gendered roles within the household. Also, women are often excluded from financial environments and can lack the motivation to take it upon themselves to be financially independent. Many women don’t have the freedom and confidence to actively seek out financial services that can provide education to guide personal financial management and investment.

A lack of financial capability has a real impact on women’s lives, directly impacting the ability for women to enter retirement with enough money to support themselves. Because women will live longer (on average), it’s likely we will require a higher level of retirement savings to achieve financial wellbeing. At the same time, women face longer career breaks (because we bear the brunt of raising children and looking after elderly parents) and lower average incomes, meaning we have less than men to prepare for retirement.

What can I do?

Women of Aotearoa, you have the right and ability to achieve financial wellbeing – both for retirement and long before then! That’s why Closing the Gap exists – to help women get educated, take action and improve their own financial wellbeing.