It used to be that money management was considered the domain of the ‘breadwinning male’. Women would manage the household and generally avoid discussing money matters. As we celebrate National Women’s Month this August, let’s seize the moment to take stock of how financially empowered we are, and find out how to get started on the road to financial freedom.
Financial literacy = financial freedom
In recent years, women have discovered how liberating it can be to be financially independent and involved in the planning and managing of their family’s budget. Therefore, we are putting an emphasis on educating women about managing their finances.
Being financially empowered is not about how much money you have, but how you manage it. According to a 2021 Deloitte report, around seven out of 10 South Africans spend all their income (or more than they earn) every month. The South African Reserve Bank estimates that over 75% of our income goes towards paying off debt, while less than 30% of us manage to save anything at all. While this is partly due to our high unemployment and inflation rates, it is also because many of us lack financial literacy (knowing and understanding how to manage money), particularly regarding debt management, investment and retirement planning.
Why don’t women put money first?
Women often place the needs of their families before their own, which may have a bigger financial impact on their lives at a later stage. An estimated 41.8% of South African households are headed by women. This shows just how essential it is for every woman to understand her financial position and secure her financial future.
Get financially empowered today
Financial literacy empowers you and those around you. So, how do you get started?
- Keep an eye on debts and make sure your expenses don’t get out of control – spend for necessity rather than luxury.
- Maintain a good credit record so that you can have access to credit, should you need it.
- Evaluate your current situation. How much do you know about the household finances? What would happen in an emergency or the death of a family member?
- Educate yourself. Even if you’re not a ‘numbers person’, there are resources available such as books, online apps and courses. Speak to a financial advisor at your bank or contact your employee wellness programme.
- Communicate confidently and openly about money with your family. Share and discuss your financial goals and plans.
- Draw up a simple budget to keep track of income and expenses. It should be flexible to accommodate unexpected expenses and include short- and long-term savings.
- Assess the type of bank account you have and whether it is appropriate for your stage in life i.e. student, married, have children etc.
- Start saving for your retirement as soon as possible.
Here’s an interesting observation from award-winning financial journalist, Maya Fisher-French. In her July Savings Month Tip, she
Tweets: “Did you know you get a bigger “high” from anticipating spending than you do from an actual purchase? This means by planning and saving towards something special like a car or holiday you’ll get more enjoyment than simply paying for it immediately on credit.”
Maya is so passionate about helping people manage their money that she has developed a programme on how to follow the basic rules of money management: budgeting, avoiding credit and investing. She says: “It is not rocket science, but it takes discipline and determination. That is why I have created Money Mentor, a space where you can take control of your money and get the help and motivation you need to stay on track”
You can explore Money Mentor here: https://themoneymentors.co.za/
Strategies for financial independence
- Check out A Financial Literacy Masterclass by Momentum and FinEazy.
- Read one of these books by South African authors:
- Smart Woman: How to fain financial independence and create wealth by Sylvia Walker
- From Debt to Riches: Steps to financial success by Phumelele Ndumo
- You’re Not Broke, You’re Pre-Rich by Mapalo Makhu
- See this Hello Doctor article on making financial independence your goal.
- Remember that you can contact your employee wellness programme for financial planning advice
- Check out Maya Fisher-Fish: https://themoneymentors.co.za/
The more financially literate you become, the more you can work smart choices into your life and the closer you will get to financial empowerment.
- Global Financial Literacy Excellence Centre
- Personal Capital
- The Banking Association South Africa
- UBS Bank