Women are more educated and successful than ever. But with gender pay gaps and more frequent career disruption related to family responsibility, many women feel disempowered when it comes to personal finance. So this August – during Women’s Month – take control of your finances. Not only is this empowering, it will ensure that you build a financial roadmap for your future.
“As women, many of us abdicate our long-term money decisions to other people, whether it’s our parent’s or our partners,” says Paula Walker (CA) SA, a Director and Advisory Partner at the Consolidated Wealth Group. “Many women handle the day-to-day budgeting in their households, but when it comes to long-term planning, we often don’t have the headspace or the time.”
Female or male, old or young, single or married; the bottom line is that you need to take responsibility for your finances. “Financial independence isn’t just about how much money you have, it’s about having the knowledge and the confidence to make your own financial decisions,” Paula explains.
So this Women’s Month, step up and own your power by taking control of your finances. Here are Paula’s top five steps to becoming financially savvy:
1. Open a bank account
Many women who have been stay-at-home mum’s who have always relied on someone else to handle their money often don’t have their own bank accounts. Women in this situation need to be aware that should their partner pass away unexpectedly, their bank account could be frozen and you may not have access to funds for an extended period. That’s why you should have your own bank account with sufficient emergency funds to cover household expenses for up to six months.
2. Work with a budget
To take control of your finances, you need to have an airtight budget. This will give you an overall view of how much money is coming into your household, your financial responsibilities and what is left once all of the bills are paid. This will allow you to start allocating a certain amount every month towards your savings goals, whether that’s a rainy day fund or long-term savings for an overseas holiday or even your retirement. To enable this, set up automatic payments into an appropriate investment, so you don’t even have to think about it. The important step is that you have a savings plan.
3. Protect your income-earning capability
If the past 18 months have taught us anything, it’s that life is uncertain. There has never been a better time to protect your assets and income with the right risk cover in place. The appropriate levels of life cover, income protection and dread disease cover can provide financial security in these unprecedented times. Most companies offer some of these benefits but double check that you and your family have all the cover that you need.
4. You’re in this together
Any long-term relationship is a partnership and you should work towards your financial goals together. By working with your partner on your finances and communicating your goals – saving for a house, your children’s education and even retirement – you will both have a better understanding about your money. So talk about your finances and have a finance date-night once a quarter to ensure that you are both on the same page and fully aware of your financial position.
5. Work with a Financial Advisor
Think of a financial advisor as a personal trainer, someone to guide you and keep you going when you might feel overwhelmed. An advisor helps you focus on the big picture and will build a portfolio to match your goals. How often you interact with them is up to you – but periodic check-ins will keep you on track and by attending these meetings with your partner, you’ll both be updated on your financial progress.
Paula says that money gives you options in life and as a woman, taking control of your finances is an absolute must. Financial independence is empowering and by taking charge of your finances, you are taking charge of your life and your future.