Money-smart Women

W omen are more educated and successful than ever. Yet when it comes to their finances, many women still tend to stand on the sidelines. So this August – during Women’s Month – make it your goal to understand your financial situation. Not only is this empowering, it will ensure that you build a financial roadmap that will help you take control of your money both now and into the future. 

“We’ve seen time and again that women tend to shy away from managing their own money and abdicate their long-term financial decisions to other people, whether its their fathers, partners or their spouse,” says Scott Barker, Managing Director of Snowball Financial Advisory Services. “Many women handle the day-to-day budgetting and cash-flow in their households, but when it comes to long-term planning, they will tell you that they often don’t have the headspace or the time.” 

If you can relate to this, you are not alone. Almost one in three women believe that men are better at handling financial matters than women and 65% of men agree with this statement! Female or male, old or young, single or married; the bottom line is that you have to take responsibility for your own finances. 

“Financial independence isn’t just about how much money you have, it’s about having the knowledge and the confidence to make your own decisions. This doesn’t mean that you don’t need to ask for help. It simply means that you manage your own money: understanding how much you have and choosing how you will achieve your financial goals,” Scott explains.  

So this Women’s Month, step up and own your power by taking control of your finances. Here are Scott’s top five steps to becoming financially savvy:

1. Open a bank account

This may sound obvious but for women who have been stay-at-home mum’s who have always relied on someone else to handle their money, this is a reality. If something happens to your partner or spouse, their bank account will be frozen and you may not be able to access funds for up to two years. To ensure you are financially stable during this time, you should have your own bank account with emergency funds that will allow you to cover household expenses for up to six months. 

1. Work with a budget

To take control of your finances, you have to know where you stand financially with an airtight budget. This will give you an overall view of how much money is coming into your household, your financial responsibilities and what is left once all of the bills are paid. This will allow you to start allocating a certain amount every month towards your savings goals and you can choose whether you prioritise a rainy day fund or start with long-term savings for an overseas holiday or your retirement. The easiest way to do this is to set up automatic payments into a savings account, so you don’t even have to think about it. The important step is that you are starting a savings cushion that you can access when you need it. 

1. Protect your income-earning capability

The gender pay gap, disproportionate financial responsibility and retrenchments take their collective toll on South African women. This only serves to highlight the financial stress placed on working women and with retrenchments at an all-time high over the past two years, there has never been a better time to protect your income with income protection and disability cover. This pays a monthly amount if you are unable to work, either temporarily or permanently, due to illness or injury while disability cover pays out a lump sum benefit if an illness or injury leaves you permanently unable to work. While most companies offer these benefits as part of their employee benefits package, take the time to double check the cover that you have.

1. Work with your partner

Any long-term relationship is a partnership and you should always work towards your financial goals together. What does your partner pay for each month? If anything had to happen to them, do you have sufficient funds to cover all their financial responsibilities? By working together on your finances and communicating your goals – saving to buy a car or house, your kid’s education and even retirement – you will both have a better understanding about where your money is going. So talk about your finances and have a finance date-night once a quarter to ensure that you are on the same page as your partner. 

1. Work with a Financial Advisor

When it comes to long-term financial goals and managing your money, having a support team can be a great confidence booster. Think of a financial advisor as a personal trainer, someone to guide you and keep you going when you might feel overwhelmed or tempted to call it quits. An advisor will help you focus on the big picture and build a portfolio to match your goals. How often you interact with them is up to you – but periodic check-ins will help keep you on track and if you do this together with your spouse, you’ll both know exactly where you are in terms of your financial plan.

Scott says that money gives you options in life and taking control of your finances is an absolute must. Financial independence is empowering and by taking charge of your finances, you are taking charge of your life and securing your future.

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At Snowball Financial Advisor Services, we believe so strongly that all financial planning starts with a Will that we’ll draft yours as a complimentary service. Give our team a call today 0310360420 or email admin@snowballfas.co.za to arrange your complimentary Will consultation today, so that you have peace of mind for tomorrow. For your convenience, consultations are available online, on the phone or in person.

*The information in article does not, and is not intended to, constitute financial advice and materials on this site are for general informational purposes only.