I have a simple rallying cry: women need to do more with their money.
I’m not saying I’m an expert. Far from it. Despite spending almost a decade as a financial journalist interviewing the world’s top investors about their strategies and mindset, I struggled to even bring myself to open an ISA. I clearly remember how experts never thought the FTSE 100 would break the 7,000 mark, but I can’t recall which hole in the ground my savings fell into. I even spent 18 months working in New York and wracked up hundreds of pounds in bank charges because I didn’t get one of those… foreign currency card thingies.
And if I’ve been a bit, shall we say, lax, with my cash, then I imagine many others are in the same boat? After all, most of us didn’t get financial education at school, and I think a lesson on pensions or how to send an invoice would have been more useful than weekly experiments in home economics about how much baking soda can ruin a brownie.
In my defence, it’s tempting to be apathetic in a world where most of the “benefits” of products like pensions and ISAs benefit the truly rich. Getting on the property ladder is almost impossible – most of us need our parents to help out. The cycle of poverty is real, and money only makes more money if you have it in the first place.
My third excuse is that money, for some unfathomable reason, is put in the same category as rocket science – technical, detailed, irrelevant – or it’s seen as an imminent disaster, with American pundits screaming on cable news about the latest hot stock or announcement by the central bank. We put money experts on a pedestal and worship them – and that didn’t turn out so well for former fund-manager star Neil Woodford. But money is not an exclusive club. We don’t need to be up to speed on the ramifications of every by-election to take an interest in politics. We also don’t need to know the direction of equity markets (they normally go up over the long term anyway) or know the interest rate of a government bond to sort out our finances.
So, the million-dollar question: how can I get better with my money? One is learning, and talking to other people about their finances. Taking small steps at a time; deciding what you really want and focusing on your goals, rather than saving for a future you don’t know is going to happen. (Despite women’s mags advising me to the contrary, I refuse to give up my takeaway coffee most days – I get a discount with my KeepCup.) I’ve taken some simple steps over the last year: consolidate my pensions into one pot; invest in premium bonds; open a stocks and shares ISA; put aside 30 per cent of my income to pay tax and student loan, and cut down on what I spend ie subscriptions and fast fashion.
There is a higher purpose here, I like to think. In the UK, there is a very significant gender pay gap (8.6 per cent for full-time workers), a gender pension gap (almost 40 per cent in 2017-18) and a gender investment gap, (YouGov research shows that 52 per cent of women have never put their money into an investment product, compared to 37 per cent of men). And while what we really need is to change the overarching structures that affect those gaps ie corporate transparency and legislation – in the meantime we can at least gain confidence in our own money matters.
And we should gain confidence, because research shows that women make good, if not better, investors compared to men. Women are more risk averse, and less emotional. As someone who has interviewed the man who brought down Barings Bank in the 1990s through excessive risk-taking, I believe this to be true.
In other words, I want to shake that magic money tree. That’s why I decided to launch a podcast about how money affects our lives – our work, health, relationships and everything else. Dealing with money is unavoidable, yet we often feel like talking about it is dirty, distasteful, or out of our remit. It’s time that changed, for our own sake.
Rachael Revesz is a journalist and host of An Honest Account, a podcast about how money affects our lives
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