Women urged to empower themselves through financial planning

Despite strides forward in education, women are often not as confident when it comes to their financial matters as men, which is mainly a result of social conditioning. But times are changing and women need to understand their unique financial needs in order to provide for themselves and their loved ones.

In order to take control of their personal financial situations, there are some vital steps women need to consider.

1. Start a budget

The most important aspect of sound financial planning and preparedness is to create an accurate budget that reflects expenses and financial needs, while also ensuring that the budget is actually followed.

To draw up a budget, monthly expenses such as housing costs, utilities, groceries, car payments, petrol, insurance and entertainment must be recorded. These expenses must then be subtracted from your disposable income. This will give a good indication of what is left over to divide according to what can be saved and what can go towards discretionary spending. It is also a good idea to pay off any debt as soon as possible in order to avoid unwanted interest costs.

2. Avoid the urge to splurge

When presented with a month-end sale or a good bargain, sometimes it can be so hard to resist. However, it is important to take a step back, look at the broader picture and question whether the purchase is a necessity or just nice to have.

Learning to identify and, ultimately, avoid unnecessary expenditures can significantly boost a woman's financial position - especially if there are other more urgent expenses that need to be considered. A good question to ask is whether the purchase requires money to be borrowed or whether it will need to be placed on a credit card - if this is the case it is probably better to avoid the extra debt.

When it comes to purchasing larger items, like a big holiday or a car, the costs should be incorporated into the budget in order to start saving over a longer period of time to ensure the cost does not overwhelm your finances.

3. Insurance considerations

Bearing in mind that one in every eight women will contract breast cancer - according to the World Health Organisation - and 10 in every 1000 professional women will become disabled in their lifetime, according to the Actuarial Society of South Africa, it is crucial that all women take out essential insurance cover including medical aid, critical illness cover, life insurance and income protection.

The importance of sufficient insurance cover to protect against the financial implications of serious injury, disability or dread disease cannot be stressed enough. Should a woman fall ill or become disabled and is unable to work she needs to have a plan in place that can assist her - or her dependents - to pay for their monthly expenses.

Depending on the package, medical aid is essential to pay for any medical expenses, such as visits to the doctor, hospitalisation or treatment in the event of health deterioration. Critical illness cover can assist with additional costs that are not typically covered by medical aid. This can include home nursing care, family counselling or alterations to a home for physical impairments.

Life insurance will ensure that dependents are financially covered in the event of an untimely death and can also assist to pay for additional medical, legal and funeral costs. Lump sum disability and income-protection policies are also important as women may contribute significantly to the total family income. Should a woman become unable to perform her occupation due to injury, or illness, whether temporary or permanent, it assists by replacing lost income, until she can return to work.

Short-term insurance needs, such as car and home insurance, are also important. Should a woman become involved in a motor vehicle accident or her home is ruined after a fire or flood and there is no insurance in place, it can be devastating to her financial situation. It is vital to ensure that these unforeseen costs are also covered.

4. Planning for retirement

Many women mistakenly believe that when they get married their partner will provide for them. However, this is not the case as you never know what will happen in the long run - they could become divorced or their partner could lose everything. A financial plan does not involve relying on others for financial support; women need to secure their own future.

It is crucial to begin planning for retirement as soon as possible, because saving from a young age ensures a more comfortable retirement. It is important remember that financial security is not only about achieving short-term goals, but also ensuring financial security in the long run. It is best to consult a financial advisor to select the most appropriate retirement plan before it is too late.

Bearing the above financial aspects in mind will better assist women to ensure a solid and secure financial situation now and in the long run. Learning to take control and understand their own finances will greatly assist women in shaping their own financial future and realising their goals.