10/06 - Category: Home, Planning Ahead

Confidence is preparation. Everything else is beyond your control. -Richard Kline

I was at a dinner party the other night for a friend’s birthday. It didn’t take long for the conversation to turn to the economy and the global financial crisis. I noticed all the men in the room had plenty to contribute, whether it was discussing the latest corporate collapse, the dire state of the share market or prophesising more doom and gloom. What they were saying was relevant and affects us all, yet compared to the men the women were conspicuously quiet.

One of the key findings of the recent ANZ Women and Money Confidence Report is that Australian women do not talk about money. It’s not because women are unaware of the present situation and therefore unable to contribute - but rather I think their silence reflects our lack of confidence when it comes to the big financial issues.

For example, the research revealed a staggering 98% of us are not comfortable when it comes to talking about our long term financial goals and the plans we have in place to achieve them. The uncertainty of the current economic environment can only add to this lack of confidence and preparation.

Amy Auster is ANZ’s Head of Foreign Exchange and International Economics. Recently, she and I travelled around Australian for a series of events designed to start the money conversation among women. The insights Amy has shared on the impact of the current economic climate and how Australian women can be best prepared have been fascinating, and I thought I’d share with you some of her expertise.

Amy explains that we are currently experiencing the worst global recession since the Second World War, with global trade and manufacturing particularly affected. There has also been a huge decline in household wealth because of what is happening in equity markets and on corporate balance sheets. Unemployment has risen, and we may not yet be at the turning point. The concerning thing about this initial phase of the downturn is how sharp it has been.

While Australia has well protected in comparison to the rest of the world, our labour markets are now being affected. Those who are dependent on an income stream from cash management accounts or income yielding products are also feeling the impact.

When it comes to preparing or protecting ourselves now Amy has the following tips: