Focus on women

How to combat financial challenges in difficult times

Arecent survey conducted by debt counselling company DebtSafe sheds some light on the financial challenges women could experience during difficult times, like the Coronavirus Disease (COVID-19) pandemic.

According to DebtSafe debt advisor Carla Oberholzer, 1 240 people took part in the survey, of which 77.9 percent were women.

“The COVID-19 pandemic and nationwide lockdown impacted 75.82 percent of these women's finances. It also impacted their emotional well-being (54.53 percent) and increased their stress level (50.42 percent),” says Oberholzer.

The research also revealed that the women have various dependants to take care of, namely children (38.10 percent), parents (15.11 percent), young adults (7.14 percent) and extended family members and friends (4.55 percent).

The female respondents' household income ranged from a low R0 to R5 000 (28.63 percent) to between R5 000 and R10 000 (22.90 percent), between R10 000 and

R15 000 (14.89 percent) and between R15 000 and R20 000 (14.50 percent).

“Their most pressing financial responsibilities included food (95.22 percent), water and electricity (63.38 percent), rent (53.50 percent), data/ Internet (30.25 percent) and medical aid (25.80%).

“The research also indicated that 74.12 percent had debt or credit obligations that they needed to take care of and that their typical debts included clothing accounts (49.55 percent), credit cards (45.95 percent) and personal loans (38.29 percent),” says Oberholzer.

During a crisis, many women stop paying or committing to certain financial obligations. Results ranged from stopping savings and investments (22.93 percent) to retail accounts (21.97 percent), day care or school fees (20.06 percent), credit agreements (19.11 percent) and

pay-television or streaming subscriptions (16.56 percent).

The World Economic Forum has reported that globally, women are more likely to be harder hit by the economic downswing brought about by the pandemic.

It says this is because women's personal finances are weaker than men's and their position in the labour market is less secure. Moreover, women are more likely to be single parents.

Dealing with financial challenges

After looking at the research and seeing the financial difficulties women face, Debt Safe has provided some tips to help them deal with financial challenges.

Many women are financially responsible for dependents, but they do not have to face these challenges alone.

“Try to get the whole family involved to execute financial goals, encourage household members to offer income-generation options or boosts, and make sure each individual contributes to lessening living expenses. For example, by limiting the use of energy-hungry household appliances or sticking to grocery lists during shopping outings,” says Oberholzer.

She adds that women should also try to boost their cashflow by checking their bank statements and looking for spending leaks, like those daily fancy coffees or takeaways for lunch.

“They all add up, making it hard to save.You can also use phone apps or a budget sheet to track your bills and spending leaks.”

Oberholzer advises also keeping an eye on fixed and varying expenses. “We need to be careful when it comes to our fixed expenses, such as cars, loans or bonds, and our variable expenses, like groceries, all of which can impact our cash flow negatively. It's best to do away with credit, where you can, and cut down on unnecessary costs that you have signed up for, but don't use. For example, a DStv subscription or gym membership.”

Have an emergency fund

An emergency fund refers to extra cash that is put aside, creating a breathing space when you need it most.

“An emergency fund should only be used in a crisis – a situation that affects your health or ability to earn money,” says Oberholzer.

A few tips to start saving for unforeseen emergency expenses include the following:

• Have a proper budget in place and keep a record of your expenses.

• Set an emergency savings target or goal for yourself each month, starting small and building from there.

• If you are in a good financial position, put your tax refund away for emergencies or use it to pay off debt so you can close a gap somewhere.

• Spring clean the house and sell unused items.

• Review memberships, like gym, and contracts annually. There are various and possibly cheaper products and suppliers.

• Make sure to review and reshuffle your credit facilities, with your financial planner.You will be amazed how much you can save.

• Recycle: Take your recyclable goods to local drop-off points and buy-back centres – the money may not be much, but every bit helps. • Get handy: Learn to do your own simple home repairs, such as fixing a leaking tap.

• Downscale your home, car and luxury items.