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Women’s Month: Your financial journey is a very personal one

By Opinion Time of article published Aug 24, 2020

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Balancing work and home life has always been challenging, but our new normal has had an even greater impact on our personal lives, affecting our families, livelihoods, well-being and health. As women in South Africa, the impact has been even greater.

According to the National Income Dynamics Study Coronavirus Rapid Mobile Survey, women in South Africa accounted for two million (two-thirds of) job losses between February and April this year. Gender disaggregated data from 125 countries from 25 June 2020 shows that in South Africa more women (57%) are infected compared to men (42%).

Women continue to feel personal and health pressures, which have been exacerbated by lockdown, business closures and rating agency downgrades. Financial pressures are at the fore with increasing indebtedness and concern around the impact of this uncertainty on livelihoods and savings. All these concerns tend to overflow into the working environment leading to poor engagement, absenteeism, presenteeism and continued questioning about future financial security.

Every journey is unique and different

Belinda Sullivan, principal consultant at Alexander Forbes, says South African women must ask themselves: How has Covid-19 impacted your income, employment, goals and objectives?

She explains that it is crucial to understand your long-term goals and how you measure them, while filtering the short-term noise that you are seeing in the market. “Advice is key to prioritise these goals and to ensure that you do not make decisions based on short-term events, which could lead to locking in losses. By carefully managing your course, you should be better off in the long term.”

She adds, “By continuing to invest during a market downturn, every additional rand that you invest is actually buying more shares at lower prices, so when the market recovers you will benefit.” We have seen this over the last couple of months since the dramatic downturn in March.

At this stage debt may be the biggest impact on your financial well-being. Little or no income may have compromised your debt repayment commitments; or you may even have incurred debt to stay afloat. It is important to face your debt head-on. Don’t be afraid to ask for advice: “You must start with a plan by setting up a budget. Knowing what all your expenses are and what income you are getting in goes a long way to looking for a way to manage your debt. This also helps you to identify non-essential expenses, which you could consider putting on hold to free up income to meet your current debt commitments. You can always relook at this once you have better control of your finances. Ask your financial planner for some guidance.”

If you are a woman in your 20s and 30s, time is on your side and you may be looking for a plan that balances wealth creation, debt management and risk benefit needs based on your specific journey. It is never too early to start prioritising your goals, albeit different needs at different times in your life. In your 40s and 50s revisit your plan to make sure that you are prioritising the right goals to achieve your targeted outcomes. Sullivan says, “Advice can help you to prioritise your goals to make sure your plan continues to meet your immediate income requirements and retirement objectives. Your income might have been affected by recent events, so you may need to question where you should be prioritising while targeting your objectives.

She continues, “Look at how you can improve your long-term outcome, balancing your current needs due to the impact of the crisis and your long-term objectives. If you are reviewing your strategy, you need to consider your specific reasons for doing so. Also ensure that you review your entire portfolio and not just certain aspects in isolation. Your plan must be holistic.”

South African women who are older than 60 and have been impacted must ask themselves what their objectives are after retirement. According to Sullivan, “it is important to consider your options in retirement and decide what is suitable for your income needs to ensure that your investment strategy in the fund, leading up to retirement, is appropriate to meet your objectives.”

It’s worth getting advice and planning for an individualised financial journey. In the words of Eleanor Roosevelt’s: “It takes as much energy to wish as it does to plan.”

PERSONAL FINANCE

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