Financial vulnerability is one of the greatest challenges women face today, according to Italia Mabula, head of segment and value proposition development at Old Mutual.

While South African women have more opportunities to be leaders than previous generations, they are faced with more pitfalls.

“Whether you have a partner or not, your income is critical and can be impacted by severe illness or disability.”

Furthermore, women outlive men by several years, so many will grow old alone, highlighting the dire need for them to save for retirement.

According to Old Mutual Savings and Investment Monitor findings, although 32% of women have at least one store card compared to 28% of males, women are more likely to contribute to stokvels than men.

Women are also more likely to save for funeral policies and children’s education, while men tend to save for home deposits and cars.

However, more women in comparison to their male counterparts are planning to support their parents.

“As women we should empower ourselves and create our own financial futures so that we can take care of our loved ones and ourselves in old age,” said Mabula.

“There is no magic formula, just discipline and proper financial planning – the key elements in ensuring a secure financial future.”

It begins with preparing a household budget, settling short term debt like store cards, and working towards reducing longer term debt like bonds on your house.

This allows you to adopt better spending patterns and more constructive use of your hard-earned money.

Once you have prepared a budget and a plan for working towards settling your debt, you can focus on addressing all your financial needs such as life, disability and critical illness cover, as well as saving for the future.

All of this must be underpinned by a valid and current will.

No one can predict the future, but there are two critical elements you should consider: protecting your income-earning ability, and saving for old age.

“Retirement planning is a crucial part of this planning. A financial plan allows you to cope with challenges that occur at various stages of your life. So speak to a financial adviser or broker to help you with a holistic financial plan,” says Mabula.

Five top financial tips for women

1. Budget

If you fail to plan, you plan to fail.

Budgeting is an essential step to financial success. It prevents excessive spending and wastage.

2. Self-control

Don’t buy anything on credit the minute you want it. Wait until you’ve actually saved up the money.

3. Pay off your debt

There is good debt and bad debt. Bad debt is usually short-term debt with high interest rates.

Remember that store cards usually have high interest and should be paid first.

Longer-term debt such as a mortgage is good debt in that after you have paid off your loan, you will have acquired an asset in return.

4. Save for retirement now

Compound interest works for you in that you earn interest on the interest already earned. The sooner you start, the sooner you will be able to retire.

5. Guard your health

You want to enjoy the fruits of your labour, your investments as well as your children and their children. You also want to ensure that you protect your income-earning ability, so that you continue to draw a salary even if you are unable to do so.

Make sure that your hard-earned money does not vanish. Save more than inflation and ensure that you invest in the right products that suit your risk profile.

Source: Fin24