August is Women’s Month, a time when we pay tribute to the fairer sex and the significant contribution they have made to creating an equal, democratic South Africa. Women have come a long way since their historic march against pass laws on 9 August 1956. Now, they make up almost half of the local workforce and, according to Study International, increasingly outnumber men at universities across the world. As women’s independence grows, so too must their mastery of money, to ensure that they remain firmly in control of their own financial futures.
“Financial independence means having your own money as well as having the freedom to choose how you spend it. However, being truly in control of your finances means that you rule your money rather than allowing it to rule you. The financial tactics that one employs to achieve such mastery can differ slightly between men and women, based on a number of factors”, explains James Williams, Head of Marketing at short-term lender Wonga.
With this in mind, Wonga has the following four tips to help women make the most of their money.
According to the World Health Organisation, women live an average of eight years longer than men. Statistically, you are likely to outlive your partner or spouse so make sure your financial security isn’t dependent on them. Even if you are not the primary income earner, it is important that you have a good understanding of the household finances. This includes being fully aware of how much household debt you are jointly responsible for, how much you have in savings and what is being done to ensure you have a stable financial future.
If you are married or in a civil partnership, it’s a good idea to sit down with your partner and have a candid discussion about the household budget, debt, retirement plans and what insurance you have in place to protect yourselves from risk.
An essential component of independence is being in control. This extends to all aspects of your life including your spending. According to a recent Global Wage Report, women still earn an average of 20% less than men, which means that they have to make their money go further. As a result it’s important to make informed spending decisions.
As a first step you should set realistic and achievable financial goals such as saving money, paying off debts or contributing to a retirement annuity. Keep track of your monthly spending so that you know exactly where your money is going and can identify opportunities to save. Create a budget, accounting for essential costs such as transport, housing or groceries and allocating a spend limit to non-essential items like clothing or entertainment. Ensure that you stick to your budget and have enough left over at the end of each month to contribute to your financial goals.
It’s always prudent to expect the unexpected. Financial freedom means being able to cope with life’s setbacks without compromising your financial wellbeing. Therefore, insuring yourself against risk is extremely important and, as majority of caregivers are female, this protection should extend to those who are reliant on your care.
If you are a parent, and particularly if you are a single mother, have your last will and testament drafted and have a sound life insurance plan in place so that your family will be taken care of should anything happen to you. If you can afford to, invest in health insurance for yourself and your dependants so that, in the event of injury or illness, you can afford the necessary care.
Plan for a family
Having a baby and growing your family can be extremely exciting. While the pitter patter of little feet might be well worth the investment, being prepared for the financial implications of motherhood will mean you can enjoy your little miracle without worrying about money.
If you work, look into your company’s maternity leave policy. In South Africa, employers aren’t legally required to pay women during their maternity leave, however, women can claim unemployment tax for a period of time. Make sure that you can afford this, without the burden of financial pressure during yourpregnancy.
Research indicates that it costs an average of R90 000 a year to raise a child. Before you take the plunge, decide how much you can afford to allocate to your child’s monthly living expenses as well as how much you need to save for long term costs such as a tertiary education. Factor this into your budget to be certain that the future you want for your children is within your financial reach. By planning for motherhood and ensuring you can accommodate the extra expense, you pave the way for a rewarding maternal experience.
For more financial information and advice on how to master your money visit the Wonga Money Academy. #MasterYourMoney
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