The 7 golden rules every woman should know about money.

There are an overwhelming number of us who don't feel like we know enough about money. 

We weren't necessarily taught financial literacy at school, our parents might not have had honest conversations with us about money, and by the time we're adults, we feel too silly to ask the basic questions. 

What is a share? How much money do I need for a house? What's a healthy amount of savings? 

As a result, we make decisions that seem like the easiest, most stress-free option at the time, but ultimately, we don't set ourselves up for the long term.  

I'd like to put it on the record that I am not a financial expert, or even very good with money. In the interests of transparency, I'd like to state the following confessions: 

- For years, I was signed up to a bunch of subscriptions that I forgot about, and when I eventually went through my bank statement I was mortified. I was paying for access to Kim Kardashian's website - despite never having visited it. I was paying for Jib Jab, even though I'm still confused as to what exactly it is and when I signed up. I felt too guilty to calculate the total cost of my ignorance, but sometimes it still keeps me up at night.

-  For a long time, I waited until my phone was cut off to pay my phone bill. It was only when I literally couldn't text or call that I'd bother to go online and pay. Eventually (in my... late 20s) I figured out you could, like, schedule for the bill to come out of your account and it changed my life.

- I didn't know where my superannuation was until the end of last year. 

Despite my own ineptitude, I'm passionate about women having a greater understanding of, and therefore more control over, their finances. 

While money is ultimately a means to an end, for women, it has a different kind of value. Money means independence. Money means freedom. Money means that if you're in a situation you don't want to be in - whether it's a bad job, a controlling relationship, an unforeseen challenge - you have choices. You have power.

Financial literacy is crucial for women for several reasons. Speaking to Mamamia, Kate Crous, Executive General Manager Everyday Banking at the Commonwealth Bank says, "women have unique challenges that differ from men, which can put pressure on our financial wellbeing."

"For instance, we often take more time out of work to have children, which can impact on our career progression and earning capacity.

"We’re fortunate to enjoy a good retirement savings system in Australia. However, because women tend to take out more time from the work force to care for families as well as being paid less on average than men, women often fall short in retirement savings. All of this can put a strain on our financial wellbeing."

Ultimately, she believes "building your financial literacy when it comes to money matters is one of the best investments you can make."

So here are the 6 golden rules every woman should know about money.

Stop ignoring it

This is what I'm most guilty of. 

I can easily just... switch off when it comes to money. I spend what I spend, I earn what I earn, and I don't take any time to interrogate it. 

But the first step - and the key golden rule for managing your finances - is to stop ignoring them.

"When it comes to improving your finances, the worst thing you can do is ignore it," Crous says.

"Rather you should actively engage with your money matters; whether that be checking your accounts regularly, setting up a regular budget check-in or setting financial goals. 

"You don’t have to scrutinise every cent, but you should understand your money coming in and out."

Build an emergency fund

Before 2020, I always rolled my eyes at the idea of an emergency fund. 'Why save money for later when I could spend it now' was my very mature mentality. 

But when the unexpected happens, an emergency fund makes all the difference. 

"One of the biggest mistakes people often make is not having an emergency fund or financial buffer," Crous says. 

"Unexpected events like illness, job loss, changes in your relationship or family circumstances can happen at any time. None of us are immune – sadly 2020 taught us that.

"So having money for a rainy day like an emergency fund or financial buffer can offer us some certainty and peace of mind during those stressful times. A rule of thumb often cited is to have an emergency fund equal to at least three months’ worth of expenses. So think about what helps you sleep at night, is it a dollar figure, or amount equivalent to a few months’ income or expenses? 

"Unexpected events like illness, job loss, changes in your relationship or family circumstances can happen at any time." Image: Getty.

"At first it might seem like a stretch, but if you start to put aside a little bit consistently, you’ll get there."

Plan for your 'One Day'

As with anything in life, we should all have goals when it comes to our money. That involves planning for both the short and long term - in more concrete terms than simply 'one day I want to be a trillionaire' (sorry, young Clare, that's looking increasingly less likely). 

Most financial institutions have tools available to help you create financial goals, make the most of your money, and set up your retirement. The CommBank app, for example, has a spend tracker, transaction notifications, a goal tracker, bill predictor and a cash flow view. 

Think long term, and look into what your financial institution has to keep you on track.

Know what a healthy and respectful money relationship looks like

Whether you're married, in a long-term relationship, or have just started seeing someone new, there is no single right way to manage your money as a couple. 

"Our relationships can sometimes impact our financial wellbeing and while it can be difficult to talk about money with your partner, it’s necessary and important," Crous says.

"Every relationship is different and there is no one right way to manage your money when you’re in a relationship.

"We bring different views and attitudes towards our finances, that’s why it’s important to have regular, open and respectful conversations about money. No matter how you decide to manage your money as a couple, both partners should have an equal voice in decision making, be transparent and share information. And this should be the same for financial decisions and responsibilities."

Understand financial abuse

As I touched on earlier, financial abuse is a very real and very dangerous tactic used by abusers. Understanding and knowing the signs of financial abuse is crucial, because it allows you to take the necessary steps to keep yourself safe. 

"It’s important to recognise when a relationship might deteriorate into something unhealthy or unsafe," Crous says. 

The contact list anyone leaving an abusive relationship should have.

"Despite its prevalence, financial abuse can be difficult to recognise. That’s why we should all understand the warning signs of financial abuse and stay vigilant. Commonwealth Bank has developed several useful guides to help anyone wanting to know more about financial abuse."

Tap into the experts

Don't be afraid to ask for help.

There are people whose whole job is to help lay people understand money! 

"When it comes to money basics, a little understanding can go a long way," Crous says. "It helps to do your research and ask questions; whether that be speaking to your financial institution, a professional financial adviser or using online resources like ASIC’s Money Smart website."

If you are experiencing domestic violence, please know that support is available. Call the National Sexual Assault and Domestic Family Violence Counselling Service, 1800 RESPECT, on 1800 737 732. If you are in immediate danger, call 000.