During women’s month, we as women often take time to reflect on how we can empower each other, break barriers and remove stigmas around our inclusion in financial planning.

In many cultures, when women get married, they are generally encouraged to yield all major responsibilities to their spouse, thus identifying them as the head of the home. Nowadays, more women are accessing bigger and better opportunities in the workplace and many run their own businesses. As a result of this, they are becoming financially independent; some to such an extent that they take home an equal or a higher salary than their spouse. Other women do not have spouses and take on the entire responsibility of financial planning themselves.

Although this is the case, some married women are still expected to take the backseat when it comes to issues relating to financial planning in their household. The responsibility is left to the spouse under the assumption that his leadership and sole discretion on the matter will serve the best financial interests of the family. However, because of this, it is often the case that women find themselves in a difficult financial position when they either get divorced or when their spouse passes on. Even during the life of married couples, the assumption that he will do a better job of managing the household’s finances simply isn’t always true. And due to a lack of initial involvement in the household finances, they are often forced to start from scratch, with very little or no knowledge at hand.

As a woman, the responsibility of how money must be distributed within the household is as much your responsibility as it is your spouse’s. As such, it is important to understand the financial needs of your family, as well as how these can be best met, even in the unfortunate event of you or your spouse’s demise.

Financial planning would include financial management (budgeting), investment planning (savings for emergencies, discretionary investments both locally and offshore as well as retirement planning) and/or risk planning (car insurance, medical aid, life cover, disability cover and cover for dread diseases). The financial planning should be implemented under the guidance of a financial advisor in order to build and protect wealth and to mitigate risks. Considering this, the active involvement of both spouses is critical in the planning and constructing of financial planning strategies for the household. This is because there are important decisions which must be made in the process, which require the input and understanding from both parties.

With the rising cost of living and the increase in interest rates which increases the future repayments on household debts, continuous adjustments to financial management, budgeting and management of expenses, consumption and prioritisation needs to be considered. This might imply an increase on the amount of money which is put aside for groceries, utilities and entertainment. With that said, it may not always be possible to freely adjust financial contributions, especially if you are salary based. Both spouses need to be involved in the finances and both need to agree on the spending needs which should be prioritised.

Even in the case of women who have opted to stay at home and take care of their households, financial literacy and awareness is a must. It is important to understand how you and the rest of your family will be taken care of in the event of the breadwinner’s passing.  All of this is important to know so that if your spouse excludes you from conversations on their savings towards retirement, discretionary savings, or risk cover, you can enquire on the measures which have been taken by them to ensure your financial security even beyond retirement or death.

Given that women who go on maternity leave often incur salary cuts, it is also important for them to have a conversation with their spouse as to how their medical and financial needs will be covered under the conditions of a compromised income. 

There are numerous benefits of understanding the financial planning process and being a part of it. For instance, when both spouses are aware of their individual as well as joint financial situation, they are in a better position to support one another financially should it be required. This also allows a more accurate identification of risks/shortfalls in the event of death or at retirement, allowing for adjustments to be made proactively. This might also help to manage any expectations which could lead to disappointments if unmet.

Death, although a sensitive topic, is extremely important to consider. The importance of having a valid last will and testament cannot be emphasised enough. Both parties must be on the same level of understanding on how the transfer of wealth will take place in the event of one’s death.

Women should make it their responsibility to involve themselves in the household finances and should encourage open conversations about finances with their spouse. Where possible, they should also teach their children about finances and encourage them to learn at a young age. Such discussions with your daughters will make them women who are confident about their finances.

I would like women to build the courage and confidence to ask the right questions as well as to determine when they need to seek the assistance of a professional when it comes to financial planning in the household.

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