HOME > BLOG > Budgeting and Saving > How women can financially empower themselves when a set-back occurs

We’d all like to live in a world where things run fairly and smoothly both on the home front and in our professional lives.

However, the fact is that in times of crisis many women, particularly those who are single and single mothers, are vulnerable when it comes to their finances.

A new Galaxy Research survey recently conducted on behalf of State Custodians Home Loans quizzed 1,005 Aussies nationwide on how financial difficulties would be handled following a stressful life-changing event such as job loss, divorce, serious illness or a death in the family.

Did You Know?

Almost half of all single women (46 per cent) and specifically three in five single mums (60 per cent) say recovering financially after a major set-back would be hard due to a lack of money knowledge.

Alarmingly, some 37 per cent of single women, and 46 per cent of single mums, admitted there was a real tendency to wait too long to take effective action in the hope that any dire financial situation would “just somehow resolve itself on its own”.

Women everywhere are at risk of severe financial distress if they don’t manage their money properly. This was the case for Tziporah Malkah – the former Vogue cover girl once known as Kate Fischer.

When the then 25-year-old split up from her partner James Packer in 1998, it set forth a disasterous chain of events. Following the break-up, newly single Kate was given $250,000 and the couple’s Bondi apartment which she sold for around $2 million – all in all an apparent windfall.

However, following a move to Los Angeles, instead of consulting a financial professional, in 2011 Kate allowed a man she was dating to invest the money on her behalf. He embezzled the lot. Kate had also thrown jewelry James had given her, said to be worth more than half a million dollars, into the ocean at Bondi to make a “fresh start”.

This misfortune highlights the fact that some 28 per cent of women and 48 per cent of single mums polled in the State Custodians study acknowledged that poor advice from friends and family could hinder financial recovery during a crisis.

By then penniless, Kate returned to Australia and was forced to live in a women’s refuge for two years alongside other women, including she says doctors and former CEOs, who had financially also fallen on hard times due to marriage fails and business busts. For the last five years, the now 43-year-old has been working in a nursing home trying to make ends meet.

At State Custodians we often advise single women in difficult financial circumstances, who are struggling to make sense of money and housing issues. Most women usually spend some proportion of their lives on their own – whether it’s by choice or circumstance.

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.

says General Manager Joanna Pretty.

In preparation of a financial set-back:

  1. Step 1. Have an emergency fund stashed away

    “Aim for at least three to six months’ worth of savings that can support you,” Jo says. “Having nothing in the bank is very risky.”

  2. Step 2. Live within your means

    “Get totally across all your essential and non-essential expenses and be honest about your present and future earning capacity. Only spend what you can afford.”

  3. Step 3. Educate yourself financially

    “Check out how well your super is performing, make sure your bank accounts aren’t attracting unnecessary fees, and look at re-negotiating your mortgage to a lower rate. Consider seeing a financial planner to map out your financial goals, particularly if you are single.”

In the aftermath of a financial set-back:

  1. Step 1. Get advice from various experts

    “Contact different experts such as financial advisors, accountants and other institutions – not just one – and explain what’s happened. The more you talk to people, the more likely it’ll become clear who can most assist you.”

  2. Step 2. Be realistic

    “Work out what’s do-able and what’s not – especially when it comes to housing. If you and your ex sell the family home, you may get your share of the money, but then you may not be able to sustain a new mortgage or buy into where you want to live, so proceed wisely.”

  3. Step 3. Work out how to invest your money

    “Be open to suggestions on how to move forward. Look at different types of investing options. For example, if you don’t want to move from your neighbourhood, consider renting there and buy an investment property elsewhere.”