Bridging the gap: how just being a woman impacts your bank balance and what you can do about it

8 March 2022 by Lifetime

Bridging the gap: how just being a woman impacts your bank balance and what you can do about it

New Zealand’s gender pay gap is unlikely to be going anywhere anytime soon and the impact of earning less over a lifetime has an enormous effect on a woman’s immediate and future financial security. This is compounded by a lower level of workplace participation, a tendency to seek part-time casual work and bear the bulk of caring responsibilities for children and other family members. So how can women bridge the gap? Here are some tips on how to build wealth and make positive steps towards pay equity and financial independence despite and in spite of the hurdles women face.

Increasing your income and being paid what you are worth

The pay gap issue is not a simple problem to solve, but one thing is clear, it is not narrowing. Currently reported by Stats NZ as 9.5%, the gap between women and men is consistently a problem in New Zealand workplaces. It is not a straightforward stat to analyse either, with some of the contributors being that more women are in part-time roles to balance with childcare and some of the part-time roles that are readily available are in industries that offer lower wages, as well as more complex contributors such as conscious and unconscious bias.

A simple step could be asking for more, particularly when it comes to negotiating pay rises and salaries for new roles. If women are asked their current salary rate in an interview, many suggest this is a pivotal moment to deflect the focus from what they are currently earning to their expectations for the new role and the value they will add to the position. Countries such as the United States have made it illegal to ask about former salaries in interviews to prevent discriminatory pay gaps from following candidates into new roles.

For hiring managers, becoming aware of the bias a question about previous salary can introduce can create the greatest change and start moving the dial on an otherwise stagnant gender pay gap.

Applying for jobs even if you think you are not 100% qualified for them

Many people have come across the statistic recorded in a Hewlett Packard internal report that suggested men apply for a job when they meet only 60% of the qualifications, but women apply only if they meet 100% of them, and much has been written about this finding since.

It does simply help just to know this fact and gain some insight into the hiring playing field. Hiring managers are often listing the characteristics of a dream (often non-existent) applicant, but in reality the job market is imperfect and people have experience and qualifications that can meet the criteria in many ways. So the lesson is to apply because the male counterpart sure is.

Using past experience as a side hustle

With the average age of a first-time mother now 30 years (compared to 24 in the 1970s), many primary carers throughout New Zealand have a great deal of work experience in a wide range of positions and industries before taking time out of the workforce. This can create more opportunity for primary carers to capitalise on their experience and benefit from the higher income and flexibility of work that differs from more traditional part-time positions.

Long called the side hustle, freelance work can offer primary carers a great income while keeping skills and experience up to date for if and when they re-enter full-time work. With increasing global acceptance of workplace flexibility, likely accelerated by the Covid-19 pandemic, workplaces are reportedly more open to employee-led hours of work, working from home and digital communication tools to build team culture. All of this means that primary carers become more eligible for roles and/or work that was previously unsuitable or out of reach.

Another consideration is for individuals to dig deep into past skill sets and use them to boost incomes while taking time out of full-time employment. For example, if a mother is now in management, she could tap into past experience as an accountant, bookkeeper (etc.) to run a ‘side hustle’ or business to earn an income while caring for children.


Of course, confidence plays a huge part in money matters. With knowing more and continuously learning how to manage, grow and distribute wealth, confidence on all money matters will increase.

Creating passive income through property or shares

Having a passive income means earning money without actively participating in the generation of that income. It does not sound easy but with the right tools and advice, creating a passive income is a powerful way to boost finances for current enjoyment and prepare the right way for later in life and retirement. Whether this is through property or investments (funds or shares), schooling up on what is going to work best for a particular budget, goal and appetite for risk, will mean women can begin taking steps to generate a passive income.

Depending on an individual’s current situation, leveraging the equity in a property might be the best way to secure a second home for the purpose of becoming a rental, or they might have savings that are earning very little interest in the bank and could be generating more income invested in a fund or company shares.

Planning for your future financial needs

Stats NZ 2017-2019 figures reveal that life expectancy for women is 83 years, while on average men live until they are 80. While an extra three years does not seem many, by that point most people have not worked for years and have no means of generating more income, making it an important issue to consider now.

The pay gap and years spent out of full-time employment for primary carer duties mean women naturally save less for their retirement. Of course having KiwiSaver is a good start when planning for retirement, but there are many factors to consider – contribution level, risk level and choosing a fund that is going to provide the sorts of returns required to sustain the lifestyle desired once retirement is reached.

At the bare minimum women on any leave should invest at least $1042.86 per year into their KiwiSaver as the minimum requirement to receive the government contribution of $521.43 – a 50% return on investment.

Considering more investment risk

The level of risk individuals are willing to accept is different for each person and each investment, but research and experience teaches us that women are more likely to be more cautious and conservative investors and choose a more risk averse investment. Although it pays to have a more conservative investor profile in some situations and in some stages of life, choosing to take more risk and diversifying a portfolio could pay greater dividends long-term.

Great bodies of research reveal that women often reap greater returns than men on their investments due to their tendency to research, seek advice and practice patience when “waiting” for returns. If they are simply not investing anything, a natural cautiousness is not a negative thing, as seeking advice before plunging in can ensure any nest egg worth investing is in good hands.

Finding financial independence

The harsh reality is that the cost of being a female is perpetuated by our willingness to surrender our financial independence or more simply trust our partners (or banks) to “take care of the numbers”. It is not the case for everyone, but for many, should a woman to take the role of the primary carer, and so stop earning a full-time income, she often also takes a back seat in the household money management. Not only does this time looking after the children result in missing out on a salary, pay rises and salary growth, but it means she can become financially dependent on her partner or other support. This has a subsequent hit on current savings, future earning potential and retirement planning. These financial setbacks are further compounded for both parties if the relationship later ends and a household with one set of bills suddenly sees each individual now responsible for one whole cost centre each.

Insuring to secure the future

Having a back-up plan for the finances when things do not go to plan is not only good sense but allows people to have the confidence they need to make good life decisions without money worries holding them back. Whether that is income protection, mortgage cover, trauma cover or health insurance, having the right cover means that money is the least of anyone’s worries if sickness means a break in earning.

Changing the conversation and surrounding yourself with the right people

Something we can control is the conversation. Let’s ensure financial literacy is accessible to more women – share financial knowledge, experience and contacts with peers and friends and talk about it over coffee. By normalising ‘talking finances’ among women, it will encourage them to save, to invest and to ask for more.

Of course, confidence plays a huge part in money matters. With knowing more and continuously learning how to manage, grow and distribute wealth, confidence on all money matters will increase. If both men and women have the appetite to learn, because let’s face it; a woman earning, contributing and investing more is a financial asset to any household or community (and country), then we raise the bar on what can be achieved by everyone.

Whether research is completed online or face-to-face with an experienced financial adviser, it all starts with a conversation, asking questions and seizing financial independence with both hands.

Disclaimer: This article has been prepared for the purpose of providing general information, without taking into consideration any particular investor’s objectives, financial situation or needs. Any opinions contained in it are held by the author as at the report date and are subject to change without notice.

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