Key things women need to know about money, savings

Our relationship with money has been altered by many life-changing events in the last few years, including Covid-19.

It has nudged many of us to think about our safety net, examine our spending and start investing to fund long-term financial goals.

Yet when it comes to women and money, the narrative is still incomplete. The gender pay gap has widened; pensions tend to be more minor, and we live for longer. We spend more of our lives caring for others, and all of this negatively affects our finances.

Now, the high cost of living is adding to our woes, with inflation eating away at cash savings while unpredictability returns to the stock market.  Here are some inspirational ideas about money that could shift your mindset.

 More women are investing

Generally, women’s investment style differs from men’s. This is often not supported by the products or advice available in the marketplace. Research shows that women are more likely to seek advice and stick to it and have a more goals-based approach to investing.

They require efficiency in terms of communication and administration. Women investors are less likely to succumb to market timing and overconfidence bias and more likely to do research before making investment decisions. Women are savvy investors.

Gender pay disparity

Although gender pay disparity is improving, the process is slow. On average, women still earn less than men. The effect of earning a lower income impacts every aspect of a women’s portfolio – personal insurance, lower investment contributions, reduced bonuses, commissions or incentives, among others.

This is exacerbated by the fact that women live longer than men and thus need to save for a longer retirement. However, studies show that a lack of money, rather than a lack of confidence, is a reason women do not invest. Closing the gender pay gap requires women to ask for a pay rise.

Financial impact of having a baby

Much of the dent in women’s earnings potential occurs after they become parents, but financial planning can help lessen the impact. The financial services sector has focused on rolling out savings products to cater to the growing needs of parents to provide ways to cover their kids’ school and college expenses.

Lack of retirement priorities

A man reaching 65 today will on average live to 84.3 compared to a woman’s 86.6-year lifespan, according to research. The disparity in earnings often makes this difficult to achieve. 

 The writer is APA Life Assurance CEO