Financial advisers perform a key role in the financial independence of women

It’s no secret that women admirably spend their lives juggling the demands of work and home, only to find that, when they reach retirement, their financial status isn’t what they had hoped it would be. It has been statistically proven internationally – The Women's Institute for a Secure Retirement reports that women typically work 12 fewer years than men over their lifetime and the poverty rate for women age 65 and older is 16 percent, compared with 9 percent for men of the same age group, according to a U.S. Census Bureau.

In 2012, Visa conducted a study involving 2000 women in South Africa who hold some financial decision making within their household, unearthing interesting findings on their relationship to money. One of the most prominent statistics was that less than a third of SA women consult a financial adviser, and less than 2% were invested in direct equities.

And yet, women tend to live longer than men – which means that their money has to last that much longer. According to Prudential's 2014-2015 Research Study (US), while females are taking control of household finances, they are no more prepared to meet long-term financial goals than they were a decade ago, with only 14% feeling confident they would be able to have enough money to maintain their lifestyle in retirement.

Investec Specialist Bank’s head of Cash Investments, René Grobler, urges women to defy the statistics and take steps to secure their long-term financial independence. “There is so much information to understand and so little time to consider the options – for many women it seems easier to put their spare cash in the savings or bank account they’ve always had. However, empowering yourself financially is one of the most important things you can do, and easier than you might think with the guidance of a competent financial adviser.”

Grobler proposes five tips for women to keep financially fit, many of which can be guided by a financial adviser:

Seek professional advice: Obtain investment advice from someone who has received professional training and therefore understands how to choose products that suit your lifestyle. Your financial adviser will also be able to help you select appropriate investment and insurance products (such as life, medical and disability cover) to suit your lifestyle, which you can re-look at annually, as needs change over time.

Review your finances every year: It’s also important to check with your financial adviser whether you are on track with your financial objectives. The options available to you every year also change as well as the economy so it is best to ensure that you are still in a product that is ensuring you receive the best returns.

Consider short, medium and long-term goals: Perhaps you are planning a holiday, or wish to sharpen your skills, put cash away for school fees or university education. These objectives require planning and budgeting; create a clear picture of how you would like to use your money and then you can take action.

Get into the practice of budgeting: Start by writing down everything you spend for a month, right down to the smallest detail, and at the same time, make a list of all sources of income. The goal is, of course, to make sure that these two are balanced and to cut down expenses where you can. With the extra cash you now have available, consider short and medium term savings products that will make your money work harder, achieving those goals sooner. Ask for guidance from an expert if you are unsure.

Pay yourself first: It’s a good start to promise yourself that you will deposit whatever is left at the end of the month into your savings account or investment plans, but the reality is that there may not be anything left at all. Pay towards your financial independence first – it will ensure you get into the habit of saving.

Grobler concludes by adding four questions to consider with your adviser, before considering alternatives to save towards short-medium terms goals, providing a guide to the maze of short-term savings products available:

• Do you need immediate access to your funds, or are you comfortable to put your money away for a fixed period? Do you need a combination of both?
• What is the interest rate that you will earn from the different products available to you and how can you maximize the returns you receive?
• Do the different options available to you charge fees or have any hidden costs? This could ‘eat’ into your hard earned savings
• Do you want your interest paid to you every month or added to your savings account? If you don’t need this amount then adding it to your savings account will continue to increase your returns in the form of compound interest.