FINANCIAL FREEDOM

How involved are women in financial decisions?

Plan ahead
Women need to plan financially

Even in today's age, we find that relatively few women are intimately involved with the financial planning of their families. Although women are often tasked with monthly budgets and the commercial running of the family -- shopping, schools, bills -- they are seldom involved with long term planning.


The ideology of complete trust and inter-dependence of marriage partners or life-time partners is a good thing as it builds a society with strong mores the reality is that in SA, for whatever reason, many couples split up.There exists overwhelming evidence that one of the fundamental reasons for failed relationships is “financial issues”. One would therefore think that involving both parties in the long term financial planning would be high up on the agenda of couples seeking a long term relationship. However, this basic need to plan financially is often overlooked.


The advantage of a joint financial plan is that it creates an ideal opportunity to focus short term hardships into long term successes. It gives both parties additional areas of opportunity and, importantly provides joint responsibility for the future growth of their partnership and family.


It is true that today’s women are financially sophisticated and realises the importance of standing financially on her own two feet, yet many are reluctant to be involved in financial planning. Relying on a spouse to provide for their financial needs or trying to live happily ever after on the proceeds of someone’s pension fund is not the fairytale you want to be a part of.

You will need about 70% of your final income increasing every year by the rate of inflation to maintain your pre-retirement lifestyle. This means that you will need to be a member of a typical retirement fund for at least 30 years. A high proportion of women in SA are single, whether due to divorce, being widowed or by choice. It is important that women rely on their own financial planning and be intimately involved with their partners planning.


Most working couples are used to receiving two incomes. Retirement provision by one spouse only will result in a significant drop in income and, of course lifestyle change upon retirement. Single mothers always end up with the financial responsibility for looking after the children and getting money out of the ex-spouse or partner. This can often be a bitter, acrimonious and hard fought process. Yet it is vital that single mothers have a plan in place to ensure that their financial future is secure. It is often extremely difficult to do future planning when month to month financial survival is paramount, but setting goals and achieving small financial victories can change attitudes and assist in personal growth.


If trends continue, science tells us that you will live eight to 10 years longer than your spouse, if he is your age. It is therefore even more incumbent on you to ensure that you are involved in every stage of financial planning, as you will require independence.
The aging process is not always kind. As you get older you are more likely to have major health-related expenses. We see healthcare spend as the third highest cost of a family’s budget, after accommodation and travel. If the trend continues, healthcare may even become the second highest cost. Medical aids need to keep pace with this and we have found that many older people have been forced to reduce the benefits on their medical aids as they have become unaffordable.


Given the responsibility of family and children all your life, in many cases providing non-stop emotional and caring support, perhaps you owe it to yourself to enjoy a comfortable and financially carefree retirement.


Steps to plan and reach your goals:

Identify your goals – are you aware of your aspirations?
Gather information – do you have a retirement fund, risk protection, savings?
Analyse the information and do scenario planning
Agree which goals are to be aimed at and the length of time required, for example short-term debt reduction, bond repayment or creation of a savings buffer. 

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