As we celebrate Women’s Month in August, we’re giving a nod to all our savings-savvy women out there – the mothers, grandmothers, sisters, and aunts. Money Management Product Head, Ester Ochse shares some insights from FNB.
Women tend to have a slightly higher rate of savings, based on research from our Retail customer base, says Ester – and particularly when it comes to emergency savings. “Data shows that 10.27% of women have at least 1 months’ worth of income or take-home pay available as emergency savings, compared with 8.75% of men.”
Having money set aside to deal with unforeseen circumstances means that you aren’t forced into decisions you’ll regret, like going into short-term debt or selling off assets. It’s the key to financial resilience. “The recommended amount you should have saved for an emergency is three times your monthly income, and that money should be held in an account that is easily accessible,” says Ester. While this may not be possible at one go – especially during these tough times. We recommend starting small, putting away a little every month until you reach that milestone of 3 months’ worth of monthly income.
Women are long-term planners
It’s not just saving for the unforeseen that women excel at – the data suggests women also think about the long-term and tend to spend more in general on. Our research shows that 33.25% of women spend more than 10% of their income on these categories, compared to only 29% of men.”
Spending on the right level of insurance protects against potential financial shocks and further assists with financial resilience. These statistics become even more relevant when it comes to retirement planning. “The life expectancy for women in South Africa tends to be seven years longer than men, *” says Ester. “This has a significant impact when determining how women need to provide for retirement.
We suggest that women take time to think about what their dream for retirement looks like. Then put a plan in place and be intentional about reaching that dream. It’s important to start saving for retirement as early as possible, so that the benefit of compounding is truly unlocked.” She recommends seeking financial advice to ensure you are appropriately and sufficiently providing for your retirement.
In fact, Ester says investing time to understand her personal money situation is the best investment she’s ever made. “Every year I have a personal finance day where I look at my finances holistically, check if I’m spending on the things that are important to me and that I value, check that I have the right insurance in place, and that my future investment goals are on track,” she shares.
In addition to living longer, women often assume the caretaking responsibility in the family. Known as the ‘sandwich generation’, it’s also a common trend for women to spend a significant amount of money caring for their children into adulthood, while at the same time looking after their parents.
Considering the continued rise in cost of living, Ester’s advice to women is to always have the fundamentals in place. “Spend less than you earn, keep track of your spend using the nav»Money Smart Budget tool on the FNB App, and use buffers like eBucks to free up cashflow. Don’t use debt to fund your lifestyle, wants or nice-to-haves.
It’s very important to ensure that the breadwinner has the right cover in place should they no longer be able to provide for their family,” she concludes.