Women encouraged to flex their financial muscles

“Financial vulnerability is o­ne of the greatest challenges women face today. While women have more opportunities to be leaders than previous generations had, there are more pitfalls, says Karabo Morule, Strategy and Marketing Executive at Old Mutual.

“As we celebrate women’s month in August, we want to encourage women to empower themselves financially as too many women still rely o­n others to take care of their money matters. Whether you have a partner or not, your income is critical and can be impacted by severe illness or disability. Women outlive men by several years, so many will grow old alone, highlighting the dire need for them to save for retirement,” Morule says.

According to the recent Old Mutual Savings Monitor findings, more women than men claim that the recent recession has influenced the way they manage their finances.

Although 70% of women have at least o­ne store card compared to 58% of males, women are more likely to contribute to stokvels than men. Women are also more likely to save for funeral policies and children’s education, while men tend to save for home deposits and cars. However, more women compared to their male counterparts are planning to support their parents.

“As women we should empower ourselves and create our own financial future so that we can take care of our loved o­nes and ourselves in old age. There is no magic formula, just discipline and proper financial planning – the key elements in ensuring a secure financial future,” Morule adds.

It begins with preparing a household budget, settling short term debt like store cards, and working towards reducing longer term debt like bonds o­n your house. This allows you to adopt better spending patterns and more constructive use of your hard-earned money.

Once you have prepared a budget and a plan for working towards settling your debt, you can focus o­n addressing all your financial needs such as life, disability and critical illness cover, as well as saving for the future. All of this must be underpinned by a valid and current will.

No o­ne can predict the future, but there are two critical elements you should consider – protecting your income-earning ability and saving for old age.

“Retirement planning is a crucial part of this planning. A financial plan allows you to cope with life’s challenges. So speak to a financial adviser or broker to help you with a holistic financial plan,” concludes Morule.

With the focus o­n financial planning for women during Women’s Month, Old Mutual provides the following financial tips:

1.Budget – If you fail to plan, you plan to fail. Budgeting is an essential step to financial success. It prevents excessive spending and wastage.
2.Self-control – Don’t buy anything o­n credit the minute you want it. Wait until you’ve actually saved up the money.
3.Save for retirement now - Compound interest works for you in that you earn interest o­n the interest already earned. The sooner you start, the sooner you will be able to retire.
4.Guard your health – You want to enjoy the fruits of your labour, your investments as well as your children and their children. You also want to ensure that you protect your income-earning ability, so that you continue to draw a salary even if you are unable to do so.
5.Guard your wealth – Make sure that your hard-earned money does not vanish. Save more than inflation and ensure that you are invested in the right products that suits your risk profile.