Don't wait for your knight in shining armour
To the women out there who are still waiting for their knight in shining armour to rescue them, to save them from their troubled times and to ride off into the sunset in a Ferrari: this is for you.
“That knight is probably divorced with a few children and has money woes of his own. Therefore, there is only one way, ladies: you have to do it for yourselves,” says Shiree Coetzer, financial planner at Alexander Forbes.
She says: “Some women are fortunate to have a partner in the true sense of the word. You can then work together to ensure that you plan accordingly. But many ladies are on their own and they need to ensure that they can take care of themselves and their children and be proud of being able to do so.”
Coetzer says that, based on her experience, her concern is that women often rely on their partners to make most of the financial decisions in the household. “Many women do not take the time to understand the long-term financial implications of the decisions made and are not aware of household savings and debt, the balance on the bond and other financial issues."
Coetzee recommends that you ask the following questions:
1. What type of marital contract did you enter into? (if applicable)
- Did you get married in community of property or out of community of property? If the latter, was it with or without accrual?
- What does that mean?
2. If you are living together, what are the contractual options available to you to ensure that you are protected if you break up? (Contrary to popular belief, there is no "common-law" marriage in South Africa.)
3. Do you have any emergency savings?
- This is ideally three months’ household expenses. It is for emergencies when, if you did not have an emergency fund, you would probably have to resort to taking out debt.
4. Do you have a retirement fund?
- This would be either through your employer in the form of a company pension or provident fund or your own retirement annuity.
- How much are you saving into the fund monthly?
- Is it enough?
5. How much is enough to retire on?
- This is an article on its own, says Coetzer, but a "rule of thumb" is that you will able to replace your income by at least 75% when you retire.
6. Do you have discretionary savings?
- These are additional savings other than emergency savings e.g. savings towards a new car, a nice holiday, education for your children etc.
7. Do you have a will?
- Either your own will or a joint will
- Where is it held?
- Who is the executor?
- A will is always important, but especially so if you have dependent children
8. Do you have a financial planner looking after your financial wellbeing?
All of these questions can be answered by having a certified financial planner looking after your interests. At the very least, start by reading up on the items above and learning a bit about all of them over time. The more you understand, the better equipped you are to make informed decisions.
“So, should the proverbial knight arrive, you can have the choice of whose vehicle you are going to ride off in ... or simply stay in your own,” Coetzer says.