Financial planning advice for women

According to a recent study done by UBS Global Wealth Management, 58% of women leave financial management to their male partners. Surprisingly, the study found that younger women between the ages of 20 and 34 were more likely to defer money decisions to their male partners. While it is common cause that women lag behind their male counterparts when it comes to wealth-building for a number of historical reasons, such as the gender pay gap, there are some significant steps women can take to ensure their financial security.

Know your worth

Armed with a combination of qualifications, expertise and skills, it is important to know your workplace worth. In historically male-dominated industries such as engineering and manufacturing, many women have been made to feel ‘lucky’ to have been offered a job and hesitate to negotiate out of fear for appearing ungrateful for the opportunity. Over and above the inherent financial inequalities, there are more nuanced effects of being under-paid by one’s employer. A lower-salaried employee is assumed to be less skilled and less valuable, whilst the converse is true as well. Those who had the confidence to negotiate a higher package are deemed to be more valuable to the business and all-round better performers, which has positive effects on their self-esteem and confidence as employees.

Don’t rely on anyone else for your financial security

Make your finances your responsibility and don’t rely on anyone else for your financial security. In the context of a marriage, ensure that you and your spouse shoulder your financial responsibilities together, regardless of who generates what income. Not being in control of finances in the event of death, disability or divorce can leave a woman in an incredibly vulnerable position, and can severely limit her decision-making powers if the relationship ends for whatever reason.

Take care of yourself first

In general, women juggle multiple roles as mothers, employees, partners and carers, and often attest to being tired and time poor. It is in their nature to care for others, very often sacrificing their own needs in order to look after children and/or aging parents. Be sure to prioritise your health, well-being and finances first before trying to take care of others.

Don’t take on your partner’s debt

Before getting married, ensure that you fully understand your partner’s financial position. If he has debt, take steps to ensure that you do not take on this debt personally. Bear in mind that should you marry in community of property, you will be jointly responsible for all debt incurred by your spouse, even debt that he incurred before your marriage. This applies to contractual debt, personal loans, credit card debt and even debt in respect of child maintenance. Rather, consider a marriage out of community of property which will ensure that you are not liable for any of his debts, whether they are incurred before or during the course of your marriage.


In their book, ‘Women don’t ask’ (Babock and Laschever, 2007), the authors’ research revealed that while 57% of men negotiated their starting salaries upwards, 93% of women accepted their first offer. This ‘nice girls don’t ask’ mentality stands in direct contrast to the ‘tough guys negotiate’ lesson that men are taught from a fairly young age. The reality is that most employers would pay a candidate less than they are worth if the candidate is not prepared to negotiate them upwards. In fact, many employers deliberately begin the negotiation process lower with the expectation that the candidate will negotiate them upwards. The result is that if you don’t negotiate, you risk the chance of entering the workplace beneath your market value – something which will have far-reaching effects on your wealth-building.

Take risk

Research done by Mercer Consultants found that when women save disposable income they tend to leave a lot of their money in cash or low-yielding savings accounts. According to their research, women are less likely to choose aggressive, growth-targeted strategies and consequently miss out on opportunities for long-term growth. According to a TIAA 2017 report, outside of their retirement funds, women tend to hold safer assets such as cash and money market funds – with their main aim being capital preservation rather than growth. However, research also shows that when they do invest, women actually make better investors than men as they are more cautious, tend to trade less and are more likely to follow investment advice. Bearing in mind that women tend to live longer than men – and therefore have a longer investment timeline – it makes sense to invest in growth-targeted strategies.

Start early

Although women make better investors, they only tend to start investing later in life as a result of the fact that they generally earn less when starting out their careers, and because maternity leave interrupts the savings progress. This is compounded by the fact that women generally live longer and therefore need to have more saved for retirement. As difficult as it may be, begin investing with your very first pay cheque – even if you start with R100 per month. If possible, avoid withdrawing your retirement benefits when moving between jobs. Check your employment contract carefully in respect of maternity benefits to ensure that you can stick to your investment plan during your child-rearing years.

Think carefully before giving up your career

The decision to give up one’s career in its entirety in order to raise children should not be taken lightly as there are massive financial, emotional and relationship issues that need to be considered. Many women who have given up their careers in order to raise children attest to feeling bored, unstimulated and resentfully reliant on their partner for money. In addition, many women harbour feelings of guilt that their partner has to work hard to fund their lifestyle. Many women struggle with the transition from earning their own money to having to ask their spouse for money, and this can cause tension in a relationship. Comparatively, the working spouse can feel enormous pressure as the sole breadwinner to work longer hours in order to make ends meet. A likely result is that one spouse is left feeling worthless and bored, while the other feels over-worked and unduly pressured. Whether you choose to continue working full time, structure a part-time arrangement, do freelance work or completely give up your career, it is important to fully understand the financial and psychological implications of the decision, both in the foreseeable future and when you have school-going children who no longer make huge demands on your time. Re-entering the workforce at some stage in the future is a distinct possibility and women need to ensure that their skills remain relevant and marketable.

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