Women’s Month: Taking stock of women and their finances in this tough environment
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By Aneesa Razack
AUGUST is an important month, because it is Women’s Month. It is a month that we as women need to utilise to review our savings and investment journey.
Saving and investing can be daunting initially. However, the age-old excuse that “someone else will worry about my finances for me” is no longer good enough. As women, we are more than capable of managing our family savings and investments.
The conventional investment world has changed. Technology has brought financial literacy and education to our fingertips. With this access to technology, educating ourselves and staying on top of our finances has become much more achievable, despite some of the challenges we face as women.
First National Bank (FNB) data highlights that women use savings products more than investment vehicles. The reasons have been attributed to women preferring safer, capital-guaranteed vehicles because of lower risk parameters. Women tend to save for emergencies through risk-averse long-term savings instruments. This needs to change, because investing one’s savings assists in growing one’s wealth over the long term. Beating inflation and the increasing cost of living requires a balance of savings and investments, because higher growth is needed to ensure that one’s wealth is not losing value over time.
The concepts of inflation and the cost of living are exceptionally important in the investment world. If your funds grow at a rate that is lower than the increase in the cost of living, your wealth is losing value year after year, and your nest egg will depreciate when you head into retirement. Investing can accelerate growth and put you on track to achieving long-term goals faster, and give your children the opportunity to attend the schools and universities of their choice.
On average, women have longer life expectancies than men, which means that women will be the sole decision makers with regards to financial matters at some point in our lives. The rule of thumb is always to plan and discuss your finances as family or with your spouse, but both spouses need to contribute actively to the financial decision-making process and understand the financial decisions being made for the household.
A large percentage of South African women still rely on men for financial decisions and planning, with some women not contributing to the decisions being made. On average, we outlive our spouse, and this could mean taking over the finances with no background as to the decisions that have been made in the past. Incorrect decisions could have been made in the past, and better financial decisions could have been made to achieve healthy retirement nest eggs for you and your family.
We also need to ensure that the wealth created in the family is correctly protected through instruments such as wills and trusts. Planning means being on top of your family finances, and if something does happen, your lifestyle should not have to be adjusted. Whether you are married, a single mom, working full time or working part time, it’s important for every woman to start planning and managing their finances.
Technology means that building financial knowledge and taking control of your financial journey through weekly financial webinars, weekly educational podcasts and articles are a mouse-click away.
Creating a savings and investment culture among South African women will not only help us to build financial security, but it will also go a long way in increasing the household savings ratio within our country. As South African women, we are resilient, strong and exceptionally capable of taking the financial world by storm and controlling our own destiny.
Aneesa Razack is the chief executive of share investing at FNB Wealth and Investments.