By Glenda Oosthuizen
Despite much progress on many fronts, women still have work to do when it comes to achieving financial security. The truth is that sound personal finances are the foundation of anyone’s freedom. While women have made great strides in the workplace, in access to reproductive health and in numerous other areas, the average woman still finds herself in a relatively precarious position financially.
The massive changes triggered by Covid-19 and the measures to combat it have again highlighted just how financially vulnerable women across society actually are – but also, how resilient they are. Though the lockdowns have affected everyone, there has been extra pressure on women. Not only are they overrepresented among frontline health care workers, they are prominent in service industries where workers have been either furloughed or retrenched. In addition, they continue to earn less than their male peers. At the same time, their share of unpaid work – childcare, shopping, cooking and so on – has become more onerous, especially with schools being closed. Balancing the roles of employee or boss, full-time teacher, domestic goddess and parental caregiver is no sinecure. Women have seamlessly adapted to this multifaceted role – as they always do.
In the process, though, many have learned a lot about themselves and their finances. Many have realised that whatever havoc it has wreaked, lockdown has highlighted both the need to become more financially resilient and that it is possible to change even seemingly ingrained habits.
Based on my conversations with clients during this period, women have become aware of some important financial truths over this period:
One is that it’s important not to prioritise the immediate needs of their family above saving, simply because it seems like there is no alternative. One needs to take the long view because, guess what, curve balls like Covid-19 could come your way without notice.
A second important lesson is that we do not need to spend as much we used to. Although not a popular thought, we could thank lockdown for showing us that we can, in fact, make substantial cuts to expenses we previously thought were essential – and redirect them more effectively. Transport costs (petrol, taxis, Uber, even insurance) have been cut dramatically, daily coffee stops are a thing of the past and those ‘must-have’ hair and nail appointments are no longer in our diaries. And, now that we have learned to live without them, or at least reduce them, we must learn how to invest any spare cash.
If there is any advice I can give a woman, no matter her stage of life, it is to set goals and then create a sound financial plan to help achieve them. The good news is that she does not have to do it alone. For the first timer, the thought of financial planning can be daunting. I have found that many women often feel more comfortable speaking to a female financial advisor. Women understand women and are more likely to empathise with how they think and feel, which is critical on such an important and personal journey.
Another barrier to starting down the investment path is fear. Putting your money in the bank is a sure way to miss out on a comfortable future, so if investing in the stock market makes you nervous, start off with unit trusts: they make excellent medium- to long-term solutions for growing your wealth, and they show you the incredible benefits of compound interest. Additionally, in these cash-strapped times, it is also really important to know that financial advice will not cost you a cent as the advisor will, most-often, receive a fee from the Product Provider.
A good advisor will tell you to have a minimum of three months of savings in case of an emergency, such as the one we are experiencing right now. While it may sound unattainable, if you invest 15% to 20% of your earnings each and every month, you will achieve that goal and also grow your retirement nest egg.
A final, important point is that women must educate themselves about the various financial products and how they work, and they must insist on being fully in the loop if they have a partner who is “in charge of the money”. The 21st Century is one of great change, and it is time for women to take ownership of their finances, and thus, of their futures too.
Glenda Oosthuizen is a Wealth Manager at GCI
PERSONAL FINANCE