Seize your financial power this Women’s Month

Keeping up with your personal finances means ensuring they stay on track to support you (and even your family) today, tomorrow and into your golden years.

In honour of Women’s Month, we’re looking at why women need to prioritise their finances along with all the other competing priorities in their lives like family, work and home. It’s not easy, but by recognising your financial power and taking charge, you can take steps to improve the present and reach the future you want.

Empower yourself

There are a lot more women-led families these days where mothers need to make important financial decisions for the entire family. Or even if both parents are present, they’re both very likely to be working to support everyone financially – long gone are the days when the role of “sole provider” fell to the husband. These days parents share that burden. 

As a first step for women to take, it’s important to empower yourself with the  financial knowledge you need to make sure you’re doing the right thing. For example, you might need to pay off debt, save towards a specific activity for the family, or put money away for retirement or a rainy day – all at the same time. What to choose? You can find a lot of educational material on-line that will help you prioritise and that explains how to invest. For example, Prudential’s Guide to Investing walks you through all of the stages of investing, different types of investments for different goals, and the costs and taxes that go with them.

Women pay more but earn less  

It’s well documented and recognised that how women spend their money is quite different to how men do.  A 2019 estimate from NPO Use Your Voice stated that women can spend at least 13% more than men on personal care products. Packaging for some products designed for women was reportedly pricier than the packaging of men’s products, influencing the price. Even a basic black t-shirt cost R20 more for a woman than a man, although the latter required more fabric to make. The disparity in the gender pay gap makes this an even more difficult reality. But if men typically earn more than women, it also means women will need to save more, especially to reach a certain level of income in retirement, while factoring in their extra longevity as well.

Stats SA released its latest mortality data earlier in the year which showed that between 2002 and 2020, the life expectancy of males in South Africa increased from 59.9 years to 64.6 years, and for females from 67.2 to 71.3 years. With almost seven years’ longer lives on average, women will likely need their savings to last much longer than men. Plus, many more females than males go on to live into their 80s or even 90s, so to fund an extended, comfortable retirement could mean working longer if your savings are behind.

Spend vs. save

In these pandemic-dominated times, with more people working fewer hours and spending more time at home, we have all cut back on some spending. Where women might have spent more on going to the hairdresser or on cosmetics, these expenses have dropped. Some new, dressier work outfits also aren’t as necessary these days. As long as the pandemic lasts, so these trends are likely to continue, and some could remain permanent in some form or another, like not having to go into the office every day, or not having to meet clients face-to-face as often.  It’s a good idea to take advantage of the change in circumstances to continue to spend less, if at all possible, even when conditions are normalised. According to ASISA, investments into unit trusts broke records at R213bn in 2020, which could indicate the spending versus saving dilemma could be shifting (even marginally) towards building up reserves to manage through tough times.  

When our budgets are pulled in many different directions, it can be difficult to prioritise, and even more so when loved ones need support. If you can cover your own finances, it will allow you to help others –  and you won’t become a financial burden on someone else, whether it’s your parents now or your children down the road.

In case of emergency

Life has a way of springing surprises on us, and not always welcome ones. Imagine a costly repair on a vehicle that no longer has a service package, or is out of warranty and has no insurance coverage. Having access to some money for unforeseen expenses means you won’t need to rearrange your budget or go into debt to fix the problem. Your own emergency fund will give you the power to steer away from a financial setback, without impacting your or your family’s plans as badly as you might without that financial safety net in place. 

The power that comes with prioritising saving versus spending, making informed investment decisions and being prepared for unexpected costs is definitely within your reach as a woman these days. It just takes recognition that these steps are essential in creating a successful and happy life, in all its stages, for you and your family. And don’t be afraid to ask for help along the way if you need it. Financial advisers and investment managers like Prudential are always available to help.

For more information, please feel free to contact our Client Services Team on 0860 105 775 or email us at query@mandg.co.za