Home Career Financial Planning Surviving and thriving in the financial jungle – tips for the modern day tigress!

Surviving and thriving in the financial jungle – tips for the modern day tigress!


 

Finally, it’s been proven! Women are better at multi-tasking than their male counterparts. A study by UK psychologists in a notable international psychology journal has shown that while both sexes struggle to cope with juggling priorities, men were slower and less organised than women when switching rapidly between tasks in tests. Now, this has been a commonly held theory for a while, but its’ always good to have this proven by scientists, is it not?


The challenge for women today, however, is that while we might be well adapted to coping with a myriad of tasks, the requirement is always to do more. If you think about the lives our grandmothers and even mothers led, for many women reading this article, the sheer magnitude and complexity of daily demands has increased significantly. Notably, in addition to the traditional roles of caregivers, many women today also have to survive and indeed thrive in the financial jungle.
With the improving economic participation of women in the labour force, women now have a lot more financial freedom. And while there is still some way to go to close the earnings parity gap in South Africa, women continue to climb the corporate ladder, increasing their wealth and participation in the economy independently from that of their spouses or partners. With this being the case, the modern woman has to take a firm front seat in driving the financial well-being of themselves and their households.
As a single mother, with two young children, this has never been more evident to me than now. Together with the financial freedom of managing the household, comes an overwhelming responsibility when it comes to financial decision making. Here are some pointers for the modern day tigress in the financial jungle.

Consider investing, women are naturally good at it

Here, our natural traits about generally looking for more stable and sustainable performance may actually play to our favour. For example, during the banking crisis of 2008, studies showed that women’s portfolios generally outperformed men’s. So perhaps our natural risk aversion and planning skills make us much more savvy investors than we might think.
Yet, women are still stubbornly less likely to invest in the stock market than men, and choose to stick to more traditional investment vehicles like fixed deposits and savings accounts. Many of the women I have spoken to about this, have indicated that they just don’t know where to start, and that it sometimes seems to complex.
If you are nervous about investing independently on the stock exchange, through for example on-line share trading, speak to a financial advisor about simple investment tools like unit trusts you could start off with. Also, don’t be afraid of researching index-linked investment bundles that allow you to participate in diversified investments in a simple, transparent way.

Know your finances and be smart about debt and savings

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Don’t shy away from the maths! Draw up a spreadsheet about what your fixed (essential) spending is per month. Such essentials might include bond repayments or rental expenses, school fees and insurance costs. Then calculate your typical variable expenses, e.g. clothing, grocery bills etc. Based on this have a grounded, numbers based view of what your surplus income is.
If you do have a surplus (the key is always spending less than you earn so you do have a surplus!), you should be using it optimally, for example by paying off higher interest debt, or by directing it towards achieving your goals, like pursuing further studies.
Be smart about how you are balancing savings and borrowing. For example, if you do you have lazy deposits which are earning you a low return, you should be considering whether you are using those funds appropriately to pay off any debt. And of course, look for options for consolidating debt onto lower rate instruments, as this is will help in lowering your overall repayment bills.

Own your credit history and credit record

Banks will often base their assessment of your ability to borrow funds, and hence the price at which they will lend to you, on your past payment behavior. Your credit bureau record is meant to be an up-to-date reflection of your payment history, but sometimes it can reflect inaccuracies or outdated information. In South Africa, you are entitled to a free credit bureau record once a year, so use this to check that your record is just that – yours!

Plan for financial freedom

Don’t take a backseat when it comes to dealing with your financial security to a spouse or a partner. There are many peculiarities that women need to take into account when it comes to financial planning. For example, women tend to live longer than men, and therefore also need to have a clear idea of what their partner has in mind for retirement, as they may need a longer planning horizon.
Have your own contingency fund for emergencies and unforeseen expenses. Life happens, and you want to be able to endure one of life’s curveballs without necessarily taking on expensive debt, that could get you into a negative debt cycle which is hard to recover from.
After all, as noted author and politician Claire Booth Luce once said, “a woman’s best protection is a little money of her own”.

 

Special Thanks to our Author; Isayvani Reddy01

Isayvani Reddy is a seasoned banking professional having held several senior positions across banking sectors both in South Africa and globally. Her combined industry experience spans more than 10 years during which she worked for a number of financial services businesses. She currently heads up on of the Card portfolios in Standard Bank’s South African businesses

Isayvani obtained a BSc (Hons) degree summa cum laude from the University of KZN and completed her MBA at INSEAD.

In her personal time, Isayvani loves spending time with her twin girls. She is also a keen traveller.

 

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