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Women and Money

Learning to get on top of it

Women and Money

“We’re talking about money money, we’re talk-in’ ‘bout the dollar bill” ..… the words in this song may as well have been written with women in mind, because when it comes to women and money, well we really don’t like to talk about it. While everyday finances may be easy for some, it’s the area of long terms investments and wealth creation where we can lack confidence.

Typically, women still earn less (certainly than men), consequently save less and are generally more risk averse when it comes to long-term financial planning and wealth creation. This is born out in research undertaken international insurance firm Prudential in its 2014-2015 Research Study, “Financial Experience & Behaviors Among Women,“. The findings revealed that while women confidently manage their household finances, they are no more prepared to meet long-term financial goals than they were a decade ago.

While 75% of the 1,407 women (age 25 to 68) polled said having enough money to maintain their lifestyle throughout retirement was very important, only 14% were very confident they will meet that goal. And just 20% said they felt prepared to make smart money moves.

Carrie Schwab Pomerantz, daughter of Charles Schwab, he of the renowned Charles Schwab brokerage firm, oozes confidence when it comes to money …

“I think that managing your money isn’t that different than managing any other part of your life. Doing it successfully —whether you’re a woman or a man — requires maturity, a clear sense of priorities, the confidence to make decisions and a willingness to follow through.”

According to Schwab, a common mistake women make is to not give retirement savings a high enough priority. Often we care for our families before we take care of ourselves.

Which bring us to life stage and investments – millennials, newly weds or single career women – our life stage has huge influence on how we prioritise our spending. Cooing over our babies as mothers is a real deal too. As women become more empowered and gender paradigms shift, so with it comes seriousness about money.

In many developing countries, bankers and investors show preference to women when it comes to lending and financial support. Bangladesh’s micro lending prodigy Grameen Bank gave preference to women for its loans. Women, its founder Muhammad Yunus felt, were more likely to be concerned for the well being of their families and towards lifting them out of poverty than men. Grameen’s wisdom was well placed. Women borrowers’ repayment rates have been 97 percent year after year, rather than 70 percent among men. Moreover, women put the money they made into providing more food for their malnourished children or to sending them to school. Thus, they were able over time to improve their families’ diet and education, contributing to the cycle of poverty alleviation as well as their overall empowerment.

With legacies like these, sistas have proved that we can do it for ourselves!

Here are some thoughts to help us better manage those rands and cents:

Where am I?

• Make a list of what you spend every month. • Write down your fixed expenses that don’t change monthly (rent or bond, insurance premiums etc) • Write down your variable expenses e.g. food, transport, mobile phone, entertainment and clothing • List bigger, occasional expenses e.g. home repairs, car services etc. • Then add together all your cost estimates – if you are spending more than you earn, you need to make a plan to reduce spending. Now you know where you are with your spending habits.

Fighting off debt

• List your expenses in order of importance – cut out items that are not essential • Start reducing your debt as soon as possible now that you’ve cut your spending, especially credit and store card debts.

You’ve got the power

• Start an emergency fund for unexpected expenses, once you’re debt free. A month’s salary is a good start • Invest some money each month for your financial goals, like saving for your retirement and your children’s education. Also remember that an accredited financial adviser can help you to establish your financial needs. • Learn as much as you can about money and how it works, so that you can build a secure financial future for yourself and your family.

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The underwriter of this policy is Old Mutual Alternative Risk Transfer Limited (OMART) a registered long-term insurer.

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