The Confidence Gap

The room fell silent when La Trobe Financial’s Chief People and Marketing Officer Antonietta Sestito stood to speak at the FW La Trobe Financial Budget Dinner. 

“Who am I?,” she began. 

“I am earning 88 cents to the dollar of many of my peers. I’m less likely to invest in shares than many of my peers … [and] I have 25 percent less superannuation funds than many of my peers.”

“Who am I? I am the average Australian woman.”

Too many Australian women are short-changed when it comes to their financial security. They earn less than their male peers and are not given the tools needed to take control of their economic futures. 

For many, smart investments are a means of growing economic wealth. But there is a so-called ‘confidence gap’ holding too many women back from investing.

Dawn Thomas, a senior financial advisor at The Wealth Designers who took part in FW and La Trobe Financial’s Choose Her Own Adventure Campaign, said women tend to be more conservative with money. This “flows through” and can affect women’s financial security later in life. 

Antonietta Sestito speaking at the FW La Trobe Financial Budget Dinner

“Women have been left out [of financial literacy] … the number of times I’ve heard women say ‘I’m just not good with numbers’ or ‘I’m not good with money’,” Thomas said. 

“Men tend to be more confident as well with their investment decisions – and women tend to hold off,” she added. 

This happens despite, as Tim Maurer writes for Forbes Magazine, study after study showing women are often better investors than men. 

“If you’ve got young women in your life, you need to challenge them to take on more risk,” Thomas said. 

“Men will be more open to things like investing in shares, which is considered ‘risky’, but it’s not. Because if you look at long-term returns … they even out. 

“[And,] if someone has just held money in cash for all those years then they’re losing out on real growth that can happen if it was invested in shares.”

To help reduce this confidence gap and encourage women to invest, we spoke to our friends at La Trobe Financial. Here are three actionable steps, taken from a team of La Trobe Financial’s experts that can help boost women’s financial literacy and confidence today.

Step one: Know your budget 

Developing a budget – and being able to stick to it – is a key building block of financial health. This involves tallying up all your expenses, even the small ones, and casting a keen eye over your spending patterns. Once you have a sense of where your money is going, you’ll be able to see where you can save money or better invest your resources. 

Two: Prioritise your financial knowledge 

Financial literacy should be seen as an essential toolkit – not a mere add-on or afterthought. Speaking as a financial advisor, Thomas said more women needed to prioritise learning about common investment strategies.

“It’s about relisting the priorities that we think are important and it’s okay if that comes off as being selfish. I think it’s more about survival because if you look right now at the stats about homelessness, they’re horrible statistics [for older women in particular],” she said. 

Three: Be clear about your ‘why’ 

Be clear about the reason why you are investing and any goals you are working towards. This will help you to clarify your investment strategy, understand how much risk you can take and weigh up what any losses may mean for you. 

These steps are not exhaustive. They are just the start. If you’re looking to boost your financial fitness, it’s never too late to reach out for advice or research the best ways available to you. 

To the extent that any statement in this article constitutes financial advice, that advice is general only. The author has not considered your personal financial circumstances. We recommend you seek the assistance of a finance professional.

Photography credit: Ashley St George