By Debra Slabber, Portfolio Specialist
Morningstar South Africa
This month, we celebrate Women’s Day in South Africa. This day holds deep historical and cultural significance; paying tribute to the bravery, resilience, and strength of women across our nation. We celebrate this event, not just because of its historical significance, but also as a reminder that we should continue the conversation about education, career advancement, healthcare, and reproductive rights of women. Even though significant progress has already been made, women in South Africa still face many critical issues such as domestic violence, discrimination and harassment in the workplace, pay gaps, insufficient educational opportunities for girls, and more.
I feel very passionate about educating women on understanding their financial situation and empowering them to make decisions that will greatly enhance their financial future. I will always advocate for women to feel empowered when it comes to their finances. Financial knowledge, financial independence, and financial security are so important. It’s wonderful to see more women taking charge of their finances and more women entering the financial industry not only as financial advisers but in other roles as well.
I know, at first it seems like a very daunting and mammoth task. There is so much financial jargon to learn, and so many different products and opinions to consider. And to top that off, it’s difficult to know who you can trust with your money these days.
To make it easier, I have compiled a list of where to start if you want to take charge of your finances today and set yourself up for financial success and freedom in the future.
1. Work on your knowledge, doesn’t matter through what medium
Financial knowledge is power. Tips, how-to guides, whitepapers, thought-leadership articles, templates, videos, podcasts and even books are widely available online, at little to no cost. Don’t be intimidated, just start. One day at a time you will see how your knowledge can greatly improve in just a short amount of time.
2. Audit your assets and liabilities
A good place to start building knowledge about your own financial situation is by setting up a list of all your assets (investment accounts, property, money in the bank etc.), and by making a list of all your outstanding debt (for example what you still owe on your house, car, credit card debt, clothing accounts etc.). Some debt is worth paying off as soon as possible, especially if you look at what interest rate you are getting charged. Try and pay off debt as soon as possible.
3. Maintain a personal income statement
Knowing what you are spending your money on versus what you are earning monthly is crucial for financial success. Make a list of all your monthly expenses – fixed and variable and keep track of them. It will become a habit very quickly and you’ll be able to pick up trends and unnecessary expenses. It is also worth considering auditing which expenses may need a refresh – for example do I need all of those subscriptions, or can I perhaps negotiate a better deal with my insurance company?
4. Set up a budget
This goes hand in hand with number 2. There are many free budgeting tools available online or via an application on your phone. Once you have a sense of what you are spending monthly, it allows you to plan ahead better, especially if you know there are larger expenses that you need to cover in the near future.
5. Make saving a priority
I can’t emphasize this one enough. Saving towards your retirement is so important. We all know the horrific statistics about not having saved enough for retirement and the predicament so many people are faced with – outliving their money. There are many different vehicles available to save – whether you open just a simple tax-free savings account, or have an emergency savings account that is easily accessible, or through a retirement product like a retirement annuity. Start today, even if it’s small, which brings me to point number 5.
6. Build a circle of trust
Don’t be afraid to ask for help. Get a financial adviser to assist you in financial planning, getting your investments into the right products for tax efficiency and ensuring that they are suitable to your own unique circumstances. It is also important to have a will in place and a financial adviser can help you set this up. Surround yourself with people that you can trust to talk openly about finances with.
In conclusion
Investing your time into understanding your financial situation is the greatest gift you can give yourself. It’s the gift of independence to your future self by knowing that a little delayed gratification today will have a large impact on your future. It is about the ability to care for yourself and those you care about. Women are incredible power creatures and with the right knowledge and action, the world is truly your oyster. As the saying goes….maybe she is born with it…maybe it’s…