Ester Ochse
Women’s month is a time when we celebrate women and their achievements. The question however is, are women better at managing their money? This is a pertinent question because there are several considerations that are specific to women, such as women living longer and having the responsibility of looking after extended family. Let’s unpack where women are winning at money.
Budgeting: Having a budget helps with keeping track of spending and allocating money to needs in the household. We have seen that when one proactively engages with smart budget on the FNB App, more money is spent on savings, investments and insurance. Interestingly, women engage less with FNB Smart Budget than men, which may have an impact on their longer-term financial wellness. Having a budget, either written or digitally using FNB Smart Budget, there is a likelihood that cash could be freed-up to help with short- and long-term goals.
Credit: Using the right credit at the right time for the right reason can be a very powerful tool. Using credit to sustain a lifestyle or living beyond your means can impede long term wealth creation or potentially start a downward spiral of debt. While the difference here between men and women is not significant, we see over the last year, men have been taking up more unsecured credit than women. The idea is to reduce unsecured credit to a manageable level with the freed up cashflow from the budgeting exercise and then applying the principle to reducing secured debt.
Savings: When it comes to savings, women are slightly better at saving than men. Women consistently have more savings on hand than men do, be it 1 week, 1 month or 3 months. Specifically looking at 1 months’ worth of savings, approximately 2% more women have 1 months’ worth of saving compared to men. The ideal aim is to have 3 months’ worth of income available in a fund that can be easily accessed, specifically for unforeseen expenses such as a medical bill or a burst geyser. It may seem like a lot and potentially unachievable but start small and set small goals to build up an emergency saving.
Protecting family: When it comes to protecting loved ones, there are a few things that should be considered like life or funeral cover and having a will in place. Life cover is specifically aimed at ensuring that financial dependants can maintain their lifestyle if something should happen to the breadwinner. Funeral cover is aimed at providing for the immediate expenses after the death of a loved one. More women tend to take up life and funeral cover as opposed to men. The question always is, is the cover enough? That is where you will need to get advice to guide you in the right amount of cover required for your specific circumstances.
Having a Will in place is another important consideration when it comes to protecting a family. A Will ensures that minor children are looked after, and their financial interests are looked after. In a Will, you can ensure that the people you want to inherit your estate, will inherit it. Men and women are very similar with only 1% more women setting up a Will.
These are some of the core components that women need to look at to set themselves up for wealth creation and financial independence. FNB follows an integrated advice process looking at an individual’s financial situation holistically. This ensures the right financial principles are used at the right stage in a person or families life stage.
Ester Ochse, is the Product Head, FNB Integrated Advice. She writes in her personal capacity.
