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Your partner is not a substitute for financial security - experts

Dec 31 2018 17:15
Lameez Omarjee, Fin24

Women need to consider that if they are the breadwinner in the household, they also need to take on responsibility to plan for the financial security of their families, say experts.

Motshabi Nomvethe, technical marketing specialist at PPS, explained that as women generally tend to outlive their male partners, they need to plan for their financial protection.

“For those women who are married or in a long-term relationship, it is important to realise that your spouse or partner is not an insurance policy.

“The life expectancy for women is longer than for men, so you need to plan accordingly and protect yourself,” she said.

According to data from the 2017 Old Mutual Savings and Investment Monitor, 50% of women are single mothers. Of these, only 16% receive financial support from the children’s father.

“Many women still rely on others - their spouse, partner or parents - to take care of them financially," said Madelein Marais, legal adviser at Old Mutual Personal Finance.  “The reality is that South Africa has a high divorce rate, so relying on a partner is no guarantee of security,” she said.

Women need to consider the expectations they have of their future financial situation, explained Nomvethe.

“You choose the type of relationship you want to have with your money; it is very important to understand what financial security means for you and to determine what your desired financial goals are,” she said.

Women face several financial challenges. These include black tax (extra money black professionals have to pay to support extended families) and pink tax (money women spend on gender-specific items), while some women find themselves in the sandwich generation where they have to support both parents and children.

“All of these situations can make it harder for women to make ends meet,” said Nomvethe.

She said women should take time to understand their finances, tax, employee benefits, insurance, savings and investments. “Draw up a budget and stick to it. Share it with your family, to manage their expectations of you,” she added.

Women should also “quantify their worth”, not just in terms of salary but also in time spent to raise a family and build a home. Safeguard that with income protection insurance, and protect other assets with insurance, said Nomvethe.

“Your income and your family’s lifestyle can be severely impacted by severe illnesses, disability or even death, and you need to make sure you are covered for these risks,” added Marais. Besides protecting their income-earning ability, women should also consider the best way to save for retirement, she explained.  

Both Nomvethe and Marais recommended that women obtain professional financial advice.  

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