 Flirting with finance
Okay, you've got online banking down pat. But are you working your finances to best serve you now and in the future? Anneli Knight and Virginia Graham – authors of Flirting With Finance – help you gain control of your money.
The following is an excerpt from Flirting With Finance, by Anneli Knight and Virginia Graham (Fairfax Books, 2009).
Flirting with finance can help bring you financial freedom, independence and security. But that’s not the only reason you should try it. Here are a few other reasons to get you warmed up.
It is fun
Flirting is fun – it adds a little sparkle to your day. You might flirt with the idea of finally learning how to cook, or starting a martial art.
You might flirt with your husband when you get home tonight, or send a cheeky message to your boyfriend, or throw some chat at that guy you’ve had a crush on for months. Or, you might flirt with the idea of finding financial freedom and independence through making investments and generating passive income streams (see Chapter 2 for more on this) – whatever puts that sparkle in your eye.
It is easy
Flirting really is easy. Although it might feel a bit awkward at first – oops, that laugh came out a bit too loud – once you warm up and relax a little it just seems to flow. And before you know it, you’ve moved from twirling you hair around your finger to having finance wrapped around your little finger. After some initial stumbles and blushes you’ll start to get the hang of the basic rules. Then it’s just a case of getting out there – and before you know it finance will be putty in your hands.
But it’s not so easy that it’s boring
We all know every good flirt needs a challenge. Where would be the fun if you got immediate results every time. While you can catch on to the basics quickly, flirting with finance is an artform. There is always a challenge around the corner, just when you think you’ve got the hang of it. It can be a world of fascinating twists and turns, and the more you learn, the more you’ll discover there is to learn. Unexpected things happen, your dreams and goals change, and you’ll make mistakes and learn from them. All the while you’ll be perfecting your craft.
Not flirting will get you nowhere
You know the saying: you have to be in it to win it. It’s simple: if you do nothing, you will end up with nothing.
It puts you in control
First, you have to decide what you want, then you have to go out and get it. Flirting is a tool to help you control your destiny by transforming your desires into reality. Flirting with finance will give you control of your finances and help you make informed decisions to achieve financial independence. If you’re not the one making decisions about your finances, someone else is – your employer, partner, parents or the government. Mastering the art of financial flirtation gives you the confidence, freedom and security to make these decisions for yourself.
It’s not what you have, it’s what you do with it
Every good flirt knows it’s not what you’re born with but how you work it that is fundamental. The same rule applies to flirting with finance. It’s not what you earn but how you invest it that will influence your success. Sure, a higher salary might make it easier to put some cash away, but the investment decisions you make will have a greater impact on your level of financial freedom, especially in the long term.
Finance will start flirting back at you
The best part of flirting is when you get a good response. So it will be a thrill to notice that once you start flirting with finance, finance will start flirting with you. You’ll start getting little rewards or gifts, perhaps a share dividend, or finance might pay you some interest.
Flirting can give things a whole new significance
Ever noticed that when you are really interested in someone or something, you start seeing relevant signs and signals everywhere? Once you begin this flirtation, you will start to notice things that were always there but never caught your eye before. Where once the finance pages of newspapers and magazines were dull and lifeless, all of a sudden fascinating information will jump from the page. You might overhear conversations that suddenly have a whole new meaning. And you’ll surprise yourself with the conversations you begin or the questions you ask. Your financial flirtation will finetune your attention – and all these little cues will help bring you success.
There is a serious side …
All of these are entirely fun reasons you should start flirting with finance, but there is a more serious side to the importance of women understanding finance and making well-informed investment decisions.
Women are different to men.
- Women have different a attitudes, beliefs and worries about money. While we are better at saving and budgeting than men, we tend to worry more and be less confident about investing, and we make more conservative investment decisions (Women Understanding Money report);
- Women are physically different to men. We live longer (so we need even more money for retirement) and are more likely to have interrupted work patterns because of child-rearing or caring responsibilities (which can significantly affect our superannuation retirement savings);
- Women earn less than men. Despite the equal pay and equal opportunity legislation, women still earn less than men for the same work, and we make up 70 per cent of the lower-paid casual and part-time workforce.
Women are as capable as men at investing and planning for our futures, but there has been a long history of women’s exclusion from the world of finance and investing.
The legal and banking structures have had a massive overhaul over the past three decades regarding their attitudes to women, but there are still many hurdles to overcome. Until recently, it was simply expected that women would be dependent upon their husbands for financial security throughout their lives and into retirement. Until the 1960s, this was so woven into the social fabric that women who worked as teachers or in other roles in the public service were forced to leave the workforce as soon as they were married.
One woman we spoke to was even made to reapply for her department store card in the early 1970s after she got married. She had held the card in her own name when she was an undergraduate student, but once she was married, the store required her husband’s permission for her to be eligible for the card.
The banking structures also discriminated against women, and it wasn’t until the 1970s that a woman was able to have a mortgage in her own name. Home ownership is one area women have transformed in a very short time with property ownership more heavily represented in female wealth than it is in men’s. Home ownership is now the most popular investment choice for women.
The dependence on men for women’s financial security was also deeply entrenched in the legal system. In the notorious “pretty widow” case in the 1990s, a judge gave a 25 per cent reduction on the damages awarded to a woman following her husband’s death because, he said, she was pretty and had a good chance of finding another husband to support her (“the remarriage discount”). This decision was only overturned by the High Court in 2002.
This social, legal and financial historical disadvantage still presents subtle challenges for women and seeps into the attitudes of men, women and financial institutions.
Because generations of women have been brought up with the expectation that their husband will provide for them, this attitude can still affect the financial decisions they make. A study conducted by the University of Technology, Sydney, found women would dip into their superannuation savings if they could to spend it on children’s education, mortgage repayments or even holidays – rather than preserve it for their retirement income.
Another compounding factor is that because women have historically not been the ones to make investment decisions, the financial literature – which has evolved for a male audience – continues to be presented in a way that many women find boring or unimportant.
Women’s lack of financial literacy has been exacerbated by the fact that sections of newspapers with a high female readership – “women’s sections” – do not contain financial or investment information. In social changes, it has become evident that relying on a man is becoming increasingly irrelevant, as higher percentages of women are now single. For the first time since World War I, there are more single women in Australia than married women. Women are choosing not to get married or are getting married later in life, and divorce rates remain high. So many more women are moving towards financial independence, in line with their relationship status.
These historical influences, the higher incidence of single women, and our physical, attitudinal and financial differences to men all mean it is even more important that women take charge of their financial literacy and investment decisions so they can move towards financial freedom and independence.
The Women Understanding Money financial literacy report found that women were more willing than men to seek further knowledge and advice to fill in the gaps of their financial knowledge. That might be why you are reading Flirting with Finance right now – to help guide you along the path to empowerment through financial freedom and independence.
 Flirting With Finance is available now – more
Published by Fairfax Media Publications
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