According to Bancy Kaleli, a Pension Consultant at Enwealth Financial Services Limited, the narrative of letting male partners take the lead in handling finances beyond paying bills is dangerous because in the event of divorce or death of their partner, such women usually end up traumatised on many levels.
“Besides rebuilding their lives, the biggest challenge becomes getting a grip on their finances, which includes figuring out their sources of income, sustaining their lifestyle, devising a new budget as well as growing their savings,” adds Kaleli.
With proper planning and smart financial moves, divorced, widowed and newly single women no longer have to be financially vulnerable or deal with challenges surrounding women and money.
Kaleli advises women who are financially dependent on their partners to protect themselves from being financially at risk in future by:
1. Taking responsibility of individual finances
One should always maintain positive saving behaviours like having an emergency fund and creating a pension plan to ensure future consumption and expenses are covered.
Although some couples manage their finances jointly, it is important for both partners to actively take responsibility of their individual finances with the aim of achieving financial freedom as opposed to relying on one partner to do all the planning and decision-making.
2. Making saving a priority
A common trend among women is that they are financial caregivers to their children, siblings or parents. In many cases, they put off personal savings to settle other expenses like college fees, mortgages, annual vacations or debt.
But the three key components of financial fitness include having an emergency fund big enough to sustain an individual for up to six months, a growing savings account and a pension plan.
The idea is to ensure -- whether a woman is single or in a relationship -- that she saves at least 20 per cent of her income to cover unexpected expenses or emergency situations without having to borrow or sell items.
3. Talking about money regularly with your spouse
Most women in relationships avoid having conversations about money with their partner and do not participate in long-term financial planning or investing decisions. They assume that men know more about finances which puts them at the mercy of their partners’ financial behaviours.
Failing to talk about finances with a partner not only shows a lack of trust in the relationship but also denies one an opportunity to educate themselves and to better understand the level of risk they are willing to take and their retirement portfolios. Both partners should be accountable for their finances by keeping track of their financial goals.
4. Working with a financial advisor
Finding someone trustworthy helps one take a look at their financial situation, make decisions based on their individual needs, and make sure they understand an investment before they put money into it.
It is important to seek out an expert advisor who appreciates one’s financial issues, a woman’s care giving load, their career and money goals.
The financial advisor guarantees a holistic approach that not only focuses on investment and retirement planning advice, but also looks at budget creation, estate planning and many more.