Financial planning for women should not differ much from that of men. Women, like men, should secure their assets through short and long-term insurance policies, create emergency funds, and invest to achieve their financial objectives. However, women face some unique challenges that make financial planning slightly different.
Statistics South Africa reveals that women live approximately five years longer than men. Additionally, according to the 2022 Women’s Report, women have shorter careers than men – up to a third less. The World Economic Forum’s 2023 Gender Gap Report indicates that women earn around 70 to 80% less than men, with South Africa ranking 111 out of 146 on wage equality for similar work.
Despite these challenges, women possess the necessary skills to overcome them. They are excellent at budgeting, investing, and have the discipline to adhere to a financial plan.
Good budgeting skills
Because many women run the household budget they have excellent budgeting skills. They are able to stretch rands and find more when they need to. That’s a basic must-have of any financial plan.
Sound investment decision-making skills
Various studies, such as the 2021 Fidelity Women and Investing study, have shown that women achieve slightly higher returns on their investments than men.
Have you ever felt frustrated when your clients fail to follow the financial advice and plans you’ve tailored for them? Not adhering to the plan can impede their ability to achieve their financial goals and aspirations, and it ultimately falls on the client to take action. While you can offer guidance, motivation, and education, it is up to the client to put the plan into practice. Interestingly, women tend to be more disciplined when it comes to managing their finances, budgeting, and investing, which increases their likelihood of success.
Working with your clients
Your clients are all unique. They have different needs and may face additional challenges when it comes to their financial plans. For example, some women are not familiar with the world of money and investing, and many put others before themselves, neglecting to invest in their futures. You have the skills to work with your clients to find out what additional challenges they face, and how they can overcome these.
Empower and educate
As a starting point, focus on financial literacy and help your clients become familiar with the world of personal finance. Even if they work in the financial services industry, they may not be familiar with the various terms and products.
The first thing women need to do when looking at their financial plans is to educate and empower themselves. Financial advisers and planners have a big role to play here and can ensure women are money-smart and money-confident.
Make sure women invest in themselves and their future
Women tend to care for others before themselves. For example, many women will pay for their children’s needs and future needs, such as ensuring they get a good education. However, women also need to invest in themselves.
You can encourage women to include their needs in their budgets, such as paying themselves by building their savings and investing in their budgets.
The need for personal advice
When it comes to financial planning for women, it’s important to acknowledge the unique challenges they may face. However, this doesn’t mean that a separate approach is necessary. By leveraging their existing skills, such as budgeting and planning, women can achieve financial freedom with the proper guidance and support from advisers and planners.