International Women’s Day: single women still vulnerable to financial disaster

This International Women’s Day, single ladies might like to take a look at their financial savvy, after new research from State Custodians Home Loans has revealed that single women - and single mothers in particular - are in danger of falling victim to serious money troubles, thanks to a lack of financial knowledge.

The survey asked over 1,000 people across Australia how they would deal with financial difficulties following major life shakeups like divorce, serious illness, unemployment or a death in the family.

The results showed that an alarming number of single Aussie women feel under equipped to deal with the financial fallout of such misfortunes. In fact, 37% of single women and 46% of single mothers admit to the worrying tendency to delay taking action in a bad financial situation, in the hopes the problem would “just somehow resolve itself on its own.”

“Given that women are living longer lives, it’s vital single women financially educate themselves in the event of a crisis. This also applies to women in a couple, who leave money matters up to their partner because they’re also at risk if they suddenly become single and don’t know how to handle finances,” said State Custodians General Manager, Joanna Pretty.

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One major issue for single women trying to get back on their feet was housing and paying off a large mortgage. Despite the fact that selling a large family home and downsizing to a smaller place with a smaller mortgage may be one of the best ways to get out of debt, 29% of single women without kids and 34% of single mums said a strong emotional attachment to their homes means they’d be reluctant to do so.

“The home can hold great emotional attachment and is familiar for kids,” said Pretty. “When women lose their jobs or get divorced, often they want to hold onto a home so they’ll feel secure. However, you need to think about it in practical terms. If you can’t handle the mortgage and it’s going to financially wipe you out in two years’ time, get advice and consider your options.”

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But 46% of single women and 60% of single mums also said that lacking financial knowledge and not knowing who to turn to for help was the biggest potential hindrance to getting their money back on track after an emergency.

Part of the problem is that finding financial advice they can trust is not always easy for single women. Single mothers in particular have trouble with this, with 48% acknowledging that advice from well-meaning friends and family may actually hinder recovery from financial trouble.

39% also felt banks and financial institutions can be intimidating, making them feel as if they have limited choices, rather than presenting a solution to money woes.

Tips for getting your finances back on track

  • Be realistic. Thoroughly think through any big financial moves - like selling your home and taking on a new mortgage - before proceeding. Get real about what financial commitments you can handle without straining your budget. Check out Mozo’s financial calculators to help you whip your budget into shape and work out how much you can afford to save, spend or borrow.
  • Shop around. Don’t feel like you’re suck with the first bank you approach, or the one you currently bank with. “...I’d advise women to shop around and talk to different institutions,” said Petty. That way, you know you’re getting the best deal, from a bank you feel secure dealing with.
  • Call on the experts. If you feel like you’re in over your head, don’t be afraid to turn to professionals, like financial advisors, accountants or even a home loan negotiator if you think there are better mortgage deals out there, but you’re uncomfortable haggling yourself. “Finding people who can give you the right information and products, and reassure you they’ll look after you is key. Trust is very important in dire situations,” said Petty.
  • Educate yourself. Learning how to handle your money is an important skill for all Aussies and there are plenty of great resources to help you brush up on your financial literacy. The Mozo website has heaps of resources to help get your money on track - for example, if you’re struggling with mortgage repayments, head over to our home loan resource centre to find guides on need-to-know topics, or take our mortgage refinance search tool for a whirl to see if you could save by switching home loan providers.