Every income earning individual needs to have a financial plan – this will ensure that your money and lifestyle is protected. However, it might surprise you to know that women have different financial planning needs to men, even if they need similar financial products. Do you know how best to plan your finances as a woman?
When putting in place a financial plan, consider the following factors:
- Earning power. Despite the many strides that have been taken by women in the workplace, they still tend to earn less than men, even though they will retire at the same time (or even earlier). Are you a working woman? Do you depend on your income? You need to take care to plan, save, and protect your money as soon as you start earning it with a view to the future.
- Even though they may retire at the same time as men, women will often have a smaller retirement plan in place, especially if they are depending on their company or husband to supplement that plan. This could because they have taken career breaks to care for their family or they don’t work in the corporate world (and therefore don’t have access to sustainable retirement benefits). What is your retirement plan? And is it independent of your husband’s? Does it need to be?
- The above concerns are linked to how long your money will last you once you are no longer earning a salary or making a regular income. And, they are compounded by the fact that women tend to outlive men. The reality is that, when it comes to finances, you need to plan for a future (including a longer retirement) in which you outlive their partner – one that involves living alone and perhaps being a sole provider. Does your financial plan take that into account?
- Specific insurance needs. Most adults need insurance but not all needs and insurances are equal. If you work in the corporate world or own a business, you probably have income, personal, or business insurance. But what if you’re a stay-at-home mom? Insurance for a stay-at-home mother might need to include life cover to provide for her dependants. Have a history of cancer? You might need a dread disease policy. Your needs are unique to your situation and should be considered in any worthwhile financial plan.
As a woman, what should you do to ensure the best financial plan for your needs?
- Learn as much as possible. Education is empowering. To be truly in control of your finances, you need to understand where you are at and where you are going. Read financial papers to better understand the markets and ask your financial adviser to explain why they are suggesting certain products for your portfolio.
- Work with a trustworthy accountant and planner. You do not need to be a financial expert to take control of your finances. But, to do so properly, you will need the help of experts like a professional accountant and reputable financial planner who take the time and care to advise you on the best possible financial moves for you.
- Know your financial goals. What do you want to do with your money? And how long does it need to last? Spend time outlining your financial goals (and dreams) and put in place a plan to achieve them. If you don’t know where you’re going, you’ll never get there.
- Talk to your partner. While this is not always the case, research shows that financial decisions are often made and carried out by a woman’s husband, leaving her in a dangerous position. When that spouse dies before her, for example, she is often left vulnerable on the financial front. Do you understand your finances, taxes, and the plan that is in place for your family? Open and honest discussions are important to protect you and your family, and ensure that your financial future is secure.