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Why financial fitness and agility are important weapons for survival

27 May 2020

Abrupt and significant changes to your business-as-usual lifestyle – as we are seeing right now with the COVID-19 pandemic – can have a significant impact on your physical, mental and financial wellbeing.

But by taking proactive steps to become more financially fit and agile, your adaptability will help you ride the waves of change and hit the ground running when life returns to normal. Here’s what you need to know about financial agility – and why it’s a powerful weapon in your arsenal at every stage of life.

What is financial agility?

When everything is running smoothly and there aren’t too many drastic changes to your home and work lives, it’s easy to fall into a pattern of behaviour that ‘just works’. This is completely understandable during the good times, but when an abrupt change occurs then it may mean your usual way of dealing with things is no longer sufficient.

Research from Dun & Bradstreet reveals that when it comes to finances – whether it’s a financial team in an organisation or simply managing your own finances – there must be a level of agility in order to navigate an increasingly shifting environment.

In terms of what’s happening around Australia and the world right now, being financially agile means having the foresight, the strategies and the confidence to weather any oncoming storm. It means you have the tools at your disposal and the financial knowledge to overcome financial issues – whether that’s a gap in your business’s cash flow, sudden job loss - in order to come out the other side as unscathed as possible.

Financially fit at every age

The younger you are when you start honing your financial agility, the better placed you will be when it comes time to retire.

The advent of the internet means there are plenty of financial initiatives now dedicated to supporting women of all ages. Often that starts with financial literacy – including everything from the Australian Government’s paper on Financial literacy: Women understanding money, to powerful politicians like Julie Bishop empowering financial freedom, and online publications dedicated entirely to helping Australian women become more financially fit

Setting yourself up for long-term success

Of course, financial agility is something you can embrace at any age, but like so many things in life, the sooner you do it, the greater the rewards you’ll reap.

The hard facts are that nearly half of all Australian women (47%) retire with less superannuation than men. Moreover, 40% of single retired women are either living in poverty or endure serious economic instability during their golden years. These statistics are made worse when you remember that, on average, women live five years longer than men and we make up 46.9% of the workforce.

There are areas you can focus on for your own financial agility, and not all of them will be appropriate for every Australian woman:

  • Career: Do you want to reach the pinnacle of your career or you do want to balance work with having a family? If the latter, remember that women take five years on average out of the workforce to care for their children or a family member, which can hamper your superannuation growth and your personal savings. Being financially confident during this time can help you focus on what’s most important and perhaps find alternative revenue streams even if you’re not working full-time.
  • Home ownership: Defying traditional notions of financial success, Australian women are more likely to own a home than men – and that includes millennials. Research from the ABS found 60% of women own a home compared to just 56% of men, with an even wider percentage gap among under-35s. This is despite women earning less than men, on average, and it’s a clear indicator that Australian women are becoming more financially confident.
  • Retirement: Just relying on your employer’s super contributions may not be enough to provide you with a comfortable lifestyle in retirement. Depending on your financial obligations, making personal contributions could beef up your nest egg and help you enjoy the best years of your life without constant money worries.

5 steps towards being more financially fit and agile

  • Today is the best day to start saving: Growing your savings is a long-term goal with a short-term solution. That means you should start right now. Just cutting out your takeaway coffee or getting rid of an unnecessary subscription service can balloon over the coming years thanks to the power of compound interest.
  • Clear your debt: Credit cards, personal loans, mortgage repayments and more – when looking at the big picture, it can sometimes seem like an overwhelming mountain of debt. So instead, start small. Set a goal to cut your debt by 10% by this time next year, and review again in 12 months.
  • Shop around: Spend some time this weekend going through your bills and shopping around for better – i.e. cheaper! – service providers including on insurances, utilities, internet.
  • Seek support: Everyone has financial challenges in their lives, but you don’t have to go it alone. Reach out to a loved one or good friend and unburden yourself of your worries. The simple act of talking about things can help you re-evaluate your financial situation and uncover new strategies.
  • Join a network of likeminded people: Being part of a network can help you stay accountable to your financial goals. Ruby Connection has free resources to help grow your financial confidence and be an inspiration to other women who want to boost their own financial agility.

Financial agility is not something that happens overnight. It involves educating yourself, networking with likeminded people, and setting (and sticking to!) your goals. Get started on your journey to financial fitness right now.

The information above is general in nature. Always seek professional assistance to ensure that your decisions are appropriate to your personal circumstances and objectives.