The road to financial independence for women

*This content is brought to you by Brenthurst Wealth

By Leslie Greyling and Suzean Haumann*

As we celebrate Women’s Month in August, attention will no doubt be turned toward the many ways women should be celebrated. While this is a sentiment we support, as financial advisors to many successful women who have taken charge of their personal affairs, we feel it’s more important to empower women rather than celebrate us.

Leslie Greyling

And what could be more empowering than achieving financial independence? Armed with income, resources and savings, there’s no reason you can’t get to this point.

Financial hurdles that women face

How you define financial independence will depend on your circumstances and goals. But one reality that women have to face is that the financial challenges they face are very different from those of their male counterparts. Look at just these three factors:

  • Life expectancy: Women usually live longer than men, so you’ll probably be responsible for your finances. The best course of action is to understand household finances and possibly even have a pool of savings or investments in case they’re needed.
  • Income gap: It’s no secret that there’s a persistent salary gap between men and women. This means you need to become more strategic with your finances and focus on saving more and planning for emergencies.
  • Caregiving responsibilities: One of the responsibilities of being a woman is being a mother and caregiver. Dedicating yourself to these duties means your income and finances will probably suffer.

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How to take charge of your finances

There is more than enough evidence that women have taken giant strides in managing their finances. 

For instance, in the US in 2020, the average balance in 401(k) accounts held by women had grown to $105,000 from $82,000 in 2010. Access to financial education and tools has also seen women take more control of their finances, making informed decisions, setting financial goals, and developing financial plans.

A financial plan doesn’t have to be complicated; even a simple target is enough to get you moving in the right direction. Here are six easy steps that you can take to improve your chances of becoming financially independent:

  1. Get educated: Knowledge is power. Learn about investment opportunities and personal finance to make informed decisions
  2. Be prepared for life-altering events: Plan ahead for unexpected life changes
  3. Don’t delay investing: Start investing early to reap the benefits of compound interest
  4. Understand your spending habits and draw up a budget: A budget can help you control your spending and save more
  5. Save for emergencies and manage your credit profile: An emergency fund and a good credit score are essentials
  6. Plan for retirement: Begin saving for retirement early to ensure a secure future

These steps are not difficult to understand or implement, so you have no reason to feel overwhelmed by what you must do. And if you are still uncertain, reach out to a qualified financial advisor who understands the complexities of what’s involved but can break it down for you to fully understand.

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It’s easy enough to follow these three golden rules that we suggest women saving for retirement follow:

Make an early start

Begin saving as soon as possible, aiming to save roughly 15% of your income from your first pay salary.

Stay committed

Retirement saving demands consistency. A broad recommendation is that you will need to save for 40 years to have enough for a comfortable retirement.

Don’t withdraw from your retirement fund

Remember: Saving for your retirement is a long-term commitment. Your chances of saving enough will suffer badly if you don’t resist the temptation to withdraw from your savings when you change jobs. Rather place that in a preservation or similar fund that will pay you in the long run.

As you will now have seen, the journey to financial independence can be different for women. But not unattainable if you follow the simple steps that we’ve laid out here. At the end of the day, it’s within your power to take charge of your future.

* Leslie Greyling is a financial advisor at Brenthurst Fourways. [email protected].

** Suzean Haumann is a Certified Financial Planner® professional and head of Brenthurst Wealth TygerValley. [email protected].

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