– Thembi Kandanga
Women have come a long way in gaining and maintaining their financial autonomy, but the playing field is far from level. A woman’s ability to make decisions about their money – this is the premise of financial autonomy for women. I truly believe that can only be achieved through financial literacy for young girls and women.
Focusing literacy efforts on girls in high school and university is key to instilling financial discipline and habits that can be used when these young women start earning an income. Simple concepts such as budgeting, saving, debt management and investing when truly understood and put into practice can change the type of women we are sending into the world. We can raise women who are empowered, self-assured and confident to demand equal access to financial products and services and equal pay to their male counterparts. Women who understand that cultivating and maintaining their financial autonomy is not negotiable and it should be protected when entering into business agreements as well as romantic relationships.
Whether we are employed or self-employed, whether we work in the home or outside of it, financial education provides us with the tools for accumulating assets, generating income, managing financial risks, and fully participating in the economy.
From a social impact viewpoint, research from across the world has shown that women who earn and control their own money tend to have more power in the home and in some cases are less likely to experience domestic violence. When women earn, save and invest, society as a whole stand to benefit. Research conducted by Rohini Pande, Professor of Public Policy at Harvard Kennedy School, shows that women who earn for themselves work more, save more and thus are more likely to spend that money towards better healthcare, education, and living standards for their families. The hard truth unfortunately is that women across the world have much less to spend and even less to save. According to the World Economic Forum’s Global Gender Gap Report 2020 men and women will only have pay equality in 257 years!
So how can we work around the systems put in place to hold us back and advocate for ourselves? By putting the basics to practice; budgeting, saving and investing as the base for all our plans.
The budget is a contentious step in getting our finances in order. Most people think it is a tedious exercise that takes the fun out of having money, others find it to be a rigid document that is hard to live up to. I like to think of a budget as the navigation system for our finances.
As with any good navigation system you enter your current location and the destination you plan to reach. As the journey begins all seems well, a straight path to your destination is shown, then life happens. There are potholes and pitfalls along the way, we make detours and stops that were not included in the initial plan. The budget being the most important planning document is there to guide our path and re-center us should we stray too far from our plans.
Flexibility: A budget should be fluid and responsive to major life changes. Revisit it every 3 months or when the need arises to account for changes in your goals or address setbacks.
Honesty: When creating a budget be honest with your spending and saving figures. Do not record information that is not realistic to your current situation. If you know you like eating out frequently or going to the spa every month, include it in your expenses.
Write it down: Use what you are comfortable with but a budget must be written down, either in a spreadsheet, app or notebook. Budgets that live in our minds are very hard to remember and implement. Give life to your budget and it will change your life.
Here a link to a simple budget template to get you started https://docs.google.com/spreadsheets/d/e/2PACX-1vQAuP4CoYKlD0V1rSUe0TK6LhddBZnRDddLvo9kO2DodDHuNZy9tOI7EanszHlQZQ/pub?output=xlsx
In a world of instant gratification, creating a savings culture plays an important role in attaining financial autonomy. Creating a savings culture requires a shift in mentality. The best way to begin this shift is to start by saving what we can afford on a consistent basis. This instils the discipline needed to form a habit. Our level of income should not determine whether we save or not. Do not put off saving because you are waiting for some perfect moment to arise. Too often we tell ourselves we will start saving when we get a raise, pay off our debts or get a “real” adult job. Here is the cold hard truth, you will never have enough money to start saving. The key lies in building solid saving habits no matter your level of income. Train yourself to put something away for yourself with every income stream.
S.M.A.R.T goals: Create savings goals for all future expenditure. These goals must be Specific, Measurable, Attainable, Realistic and Time Based.
Automate: Take the decision of saving out of your hands. Create debit orders on your salary to move money to designated savings accounts so the habit can be created without your interference.
Start small: Do not aim to save an amount that is too hard to maintain. Start low and increase as you go. Having unrealistic goals will have you withdrawing from your savings to cover expenses and have you feeling defeated when those goals cannot be reached.
A fun way to kick start your savings habit is to participate in a savings challenge with your friends or join one with strangers on social media. The #52weeksavingschallange is a great way to begin and practice consistency. The challenge works by saving a certain amount for every week of the year. This particular challenge requires us to save N$10 the first week, N$20 the second and N$30 the third, you get the gist; increase by N$10 every week. By the end of the year you will have N$13 780 saved up! Follow the #52weeksavingschallange to find like-minded individuals on their savings journeys.
I use an app called 52 Week Money Challenge (available on Play Store) to remind me how much I should put aside every week and track my progress throughout the year.
According to a report by Merrill Lynch, on women and financial wellness, “women’s number one financial regret is not investing more of their money”. The main reasons cited for holding them back are limited knowledge and lack of confidence.
It is recommended that investment planning be done with a professional but before you do so, take the time to learn the basics. The lack of confidence we experience when having to talk to professionals comes down to not having a basic knowledge of the subject matter. Thus, we don’t know what questions to ask, what red flags to look out for and if we are getting the right products and services for our needs.
While investment concepts are not gender specific, women have certain challenges that require a different approach. In the financial planning field, these gender nuances are often not considered or overlooked completely. Some advisors are not cognisant of the fact that women have more dynamic careers and encounter difficulties such as, having to take more career breaks than men to raise children, earning lower incomes, live longer than men and are often not empowered with knowledge of how to manage and grow their money. To meet women’s distinct financial needs requires not just a unique approach but one centered around finding solutions that address our very specific issues. Investing is an integral part of every woman’s financial plan that cannot be ignored. It is the only way to compound our money and pave the way for generational wealth.
For investing I use a combination of asset managers and doing it myself. My favorite asset manager right now is Namibia Asset Management (http://www.namasset.com.na/), they have a great range of funds to choose from with reasonable management fees. The best part is you can set up a minimum debit order of only N$500 per month on any of their funds. Don’t be afraid to give them a call, the service is always warm and welcoming.
For my DIY investing I use a South African app called Easy Equities (https://www.easyequities.co.za/). They have a wide selection of shares, exchange traded funds, unit trusts and exchange traded notes from South Africa, the US and Australia.
If the goal is to empower and improve women’s financial standing, then the answer is and always will be financial literacy. Financial literacy opens minds and gives young girls and women the ability to design a life that fulfills their wildest dreams.
About the author
Thembi Kandanga is a Financial Wellness Coach, Personal Finance Writer and Content Creator. She holds a Postgraduate Diploma in Financial Planning and is currently pursuing her Certified Financial Planner Designation.
She lives in South Africa with her husband and two sons and travels to Namibia frequently to service her Namibian clients.
Visit her website www.thembikandanga.com for more information on financial coaching, reading material and videos.
Follow and engage her on social media for more personal finance content, Twitter @secureherbag and Instagram @secure_her_bag.