4 steps for women to take control of their finances

11 August 2020

You hear phrases like financial planning for women and wonder why it would be any different from financial planning for men.  You might think the rands you earn as a woman are the same as those earned by men, but that is where you are wrong; a woman’s financial requirements are unique and largely different from a man’s.

Women in South Africa have to deal with being single moms, an increase in the divorce rate as well as life expectancy.  These socio-economic issues, as well as typically earning 28% less than men, make financial planning for women complex and challenging.

Head of the household

According to Statistics South Africa, women head 41.3% of households, which means that women are taking up an increasing role in the leadership of household finances.

45.6% of moms are single moms, with only 16% receiving financial support.  Children are a huge responsibility that bring with them pleasure, as well as a major financial commitment.  Some of these costs can be estimated, such as their future education, but other costs like food and clothing, require budgeting and sometimes restraint.

With this responsibility of maintaining a household and providing for children, it is important that women are financially literate to ensure a prosperous future, for herself and her family.

Financial literacy

The Visa 2013 International Barometer of Women’s Financial Literacy highlighted a major concern on female literacy levels.  The study showed that South African women rank among the least financially literate in the world, placing 23rd out of 27 sampled countries.

Women must be empowered to talk, learn, and take responsibility for their finances.  A critical area where women can and should improve is long-term holistic financial planning (which includes planning and managing their family’s budget).

To start learning about and getting control of your finances, start with these 4 steps.

4 steps to taking back financial control

  1. Create a budget

    A practical place to begin taking control of your finances is with a budget – a plan on how you will spend your money and a record of how you have spent your money.

    Apply the 50, 30, 20% rule to your income – 50% goes towards your needs (electricity, water bills, transport and education fees), 30% towards your wants (clothes, entertainment or a holiday), and 20% towards savings (Retirement Annuities, unit trusts, tax free savings or endowments).

    Having a budget will help you to be aware of where your money is going, as well as help you plan for the future.

  2. Have an emergency fund

    To help you prepare for any unplanned financial emergencies, work on building up an emergency fund.  This should be equal to at least 3 months’ income that you can use for a financial emergency, such as if your car breaks down.  This should be invested in a low risk investment vehicle that should be immediately accessible.

  3. Start investing towards a retirement fund

    Retirement funds are designed to take advantage of tax structures, where you pay less tax, which should encourage you to invest in retirement funds.

    This is a long-term investment that you should be in for the long haul to ensure you have a financially secure retirement.  You can choose from retirement annuities, pension funds, and provident funds.  Contact your financial advisor for help in choosing the best option for you.

    On this note, the last step to gaining your financial control is to find a financial advisor to guide and assist you on your financial journey.

  4. Choose a financial advisor

    You want to find a suitable, accredited financial advisor to help you on your financial journey.  The financial advisor must be qualified, experienced, and honest who has your best interests at heart.  They should be able to articulate, prioritise, and action your short-term and long-term goals.

    The person you choose to be your financial advisor is someone you want to be with for the long-term.  This should be a relationship based on trust and good service, and they should always be available when you need your questions answered.

    Never underestimate the importance of selecting a suitable and accredited Financial Adviser who can articulate, prioritise, and action your short-term and long-term goals.

I am woman, hear me roar

Women earn less, live longer, and need to save more, which is why financial planning for women is so important.  Women are strong and capable of rising above the statistics.

Following these 4 steps are just the beginnings of a prosperous future.


Open/Download Liberty’s PDF ‘Importance of financial planning for women’, including infographics

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