The benefits of you taking charge
In terms of changes across time, the female labour force participation rate today is higher than three decades ago.
This is true in the majority of countries, across all income levels. Why then are so many women, now earning their own money, not making their own decisions about these earnings?
Despite the growth in numbers of women who work, build careers, start and run successful businesses, too many still rely on others – spouse, neighbour, lawyer, bank manager – to provide direction.
1. Take charge of your own money
Manage your finances yourself. Do not transfer responsibility to a partner or spouse. You do not know what the future holds. In the event of death, the estate of the deceased is frozen until the estate is wound up, leaving you with a possible cash flow problem. Appoint your own advisor.
2. Stick to your budget
Know what your income and your expenses are, live within your means – do not overspend. Divide your after-tax income into three categories: must-haves, lifestyle and the future.
3. Say yes to be er employment and earning opportunities
Many women underestimate themselves. They become comfortable with what they do, but it is good to aim for an increase in earnings. Even if you are at the bottom step of the ladder, encourage yourself to learn more and to reach for the top.
4. Be open about your finances to your partner
The more you share with your partner/spouse, the better. For instance, if you have debt issues, do not be ashamed, tell your partner if you are struggling with debt and repayments thereof. Plan to pay off the debt as quickly and efficiently as possible. Be cognisant of your partner’s debt when you get married.
5. Start saving for retirement
The power of accumulating a nest egg for retirement and allowing it to grow is just of outstanding value. It is a known fact that women generally live about six to 10 years longer than men, so your retirement plan is a very important component of any financial plan.
6. Save more than your spouse
When women stop working for periods of time to have children and take care of them, they often put savings on hold. Save more before starting a family.
7. Look for bargains and loyalty cards
Many people are of the view that loyalty or savings cards are purely gimmicks to make us spend more. But using the programmes correctly can translate in real savings.
8. Talk about your family’s needs and your wishes with close family members
A will is of the utmost importance in every person’s life. Whether it is a joint will or a single will, it must be reviewed regularly, with your advisor (and your spouse in the event of a joint will).
Where there are minor children or children with special needs, it is important to discuss your wishes with your family, inform them of your choices should you pass away, such as a trust and guardian appointments. You do not want to place a guardianship burden on a family member that might not be ready for the task.
Suzean Hauman is a financial advisor at Brenthurst Wealth Management