“Financial knowledge is financial power.”
In light of Women’s Month, we’ve set out a “Finances for Females” guide to help our fellow females reach a higher level of financial literacy.
According to the Global Gender Gap Report, set out by World Economic Forum, it will take 98 years to close the gender pay gap in Sub-Saharan Africa if we keep up our current pace of change. This does not mean that women should rest on their oars and wait for change to come. Here are some tips to bring the femme-force to your finances:
1. Empower yourself through education
Get quality financial information from reputable sources when finalising financial decisions.
A salesperson should not have the final say in your finances. Always look for second opinions and evaluate all your options.
For example, while shopping for a loan, savings account or investment opportunity, make sure that you compare interest rates and fees and fine-comb all the Ts and Cs. It’s also a good idea to compare competitors to ensure you get the option best suited to your needs.
2. Set goals
Set financial goals, whether it’s a target amount in your savings account or a due date for paying your debts.
These can be broken down into long, medium or short-term goals, and should be realistic and fit your budget. Here are some steps for setting financial goals:
Step 1: Put it on paper
Writing down your goals can help you commit to them. The next step is to put these somewhere that you’ll see them regularly.
Step 2: Keep it SMART
“SMART-goals”, most people know the term, but seldom apply it.
This basic goal guideline states that goals should be smart, measurable, achievable, realistic and time-driven. “I want to be richer” is not a SMART goal. Something along the lines of: “I want to save R30 000 by December” can actually hold you accountable and feel less overwhelming.
Keeping it realistic and attainable, doesn’t mean you shouldn’t be ambitious. Push yourself.
Step 3: Be authentic in your goal-setting
You’ve already lost if you compare yourself to others when setting financial goals. Once again, be realistic and personal with your goals.
3. Get out!
Get out of debt. Yes, we know that not all debt is bad, but it should still be one of your goals to minimise your debt.
Some debt, like a home or student loan, allows you to achieve more incredible wealth and earning power. Making debt to buy that new pair of shoes, does not. If you have a credit card, you should aim to pay the balance on a regular basis or at least pay more than the minimum instalment.
4. Manage your own funds
Establish your own current, saving and retirement accounts and handle your own finances. Even today, many women blindly entrust their finances to a spouse or rely on them for income and financial expertise.
It is important for women to learn how to handle their own finances and increase their financial literacy if they want to feel empowered and avoid future risks.
Other financial best practices include saving, which will help you cover unanticipated expenses; setting up a retirement annuity, which happens to be tax-deductible (yay!); protecting yourself from fraud and safeguarding your personal information.