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Becoming financially independent as a woman

With August being #WomensMonth, we thought it would be good to tackle the topic of financial independence. According to research by Flux Trends in 2019, the female share of employment in South Africa is between 40% and 45%.

Based on this, women account for R1.3 trillion, or 48.3% of South Africa's GDP. Globally women spend 4.5 hours on housework per day, and men less than half of that. The amount of time women spend on unpaid domestic work is not included in labour force participation.

This means that the value women add to the economy is largely hidden, as only their paid labour is accounted for in economic models.

With women having so much on their plates, the topic of financial independence often takes a backseat. Other more pressing tasks like taking care of children and running a household takes up time, leaving things like long-term financial planning, including retirement and investing, to their partners.

With all of this in mind, it is important for women to connect with their finances.

Below are some of the steps women can take towards achieving financial independence. This is compiled by Paula Walker (CA) SA, a Director and Advisory Partner at the Consolidated Wealth Group:

Open a bank account

Often stay at home mothers rely on someone else to handle their money and they 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.

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.

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.

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 of 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.

Work with a financial adviser

Think of a financial adviser as a personal trainer, someone to guide you and keep you going when you might feel overwhelmed. An adviser 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.


The Worth of Women in South Africa, Womanomics - A FLUX TRENDS REPORT

Women and Money: Why it's important for women to take control of their finances



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