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nelson mandela bay's family lifestyle
author:
john osmond
a man is not a financial plan
issue:
7, spring 2008
Women have special needs when it comes to financial planning. On average, they earn less than men and often they are more likely to take time out from work to raise children or take care of elderly relatives. At the same time, they live longer, making the need to save so much more important. Every woman needs to have a financial plan or be working together with her husband to understand their joint Financial Planning Goals – when it comes to financial planning, too often women's needs are overlooked or even disregarded, while they trust their partners “to take care of business.” August was woman's month and although there are some initiatives regarding women's needs, it is vitally important for each woman to become more assertive in planning towards her financial independence, or at least be planning in partnership with her husband by compiling a joint plan. If you are of the female persuasion, you need to engage with a financial planner who recognizes the differences between the needs of men and women – one who is willing to assist you in addressing these needs, as well. One of the aspects often overlooked when it comes to financial planning for females, are life insurance. You need life insurance. With 43% of the workforce comprised of women, it is clear that families need the incomes of two people, often just to live comfortably. Women's contributions to their family are valuable even when they don't work outside the home. Many women are working mothers with dependent children, even if you are a stay at home mom, what would it cost to hire an au pare, pay after care or a crèche, should something happen? So if your family relies on your income, or even if you are a stay at home mom, it is critical that the family is adequately prepared, through adequate life insurance. Unfortunately it seems this is one of the most neglected aspects of financial planning - all too often we insure our car, home and TV, but do not protect our family, should the unforeseen occur. Another given within our current environment that is too often overlooked, when it comes to financial planning for females, is the assistance required by ageing parents and young adult children. Who exactly should be assisting them, is a very difficult and much debated question that raises some sharply divided opinions on what our moral & financial obligations are. Often the task of caring for young children or for older relatives falls to the women of the family and the cost of care for the elderly is increasingly falling to families. Utilizing a student loan to pay for tertiary education needs to be considered; children should be applying for bursaries and working to earn extra income, where possible. Ideally your children's education should be planned long in advance, as should the care for parents be attended to, before they need care that cannot be provided, or their sudden need catches the family off-guard. Unfortunately when you are faced with these dilemmas, it reveals that many of us have failed to prepare adequately for our old age and families are burdened beyond their means. On average, women live approximately nine years longer than men. Whether those are good years will depend on your health and your ability to save for your retirement. If you are working, you ought to be saving for retirement, even if it is only a few rand a month. The most effective way to save for retirement is in a retirement fund, at work, which could be a Pension or Provident Fund, or if your employer does not offer this benefit, then a Unit Trust based Retirement Annuity investment. Both of these options allow certain tax deductions on contributions and the underlying investments will not attract any tax on the growth. You will only pay tax if you withdraw prior to retirement or when you start drawing income from an annuity in retirement. However you decide to address these issues, it is vital that you know and understand your personal financial picture. Many women end up alone or sole parenting, either because of marriage breakup or the death of a spouse. Don't wait until you are dealing with emotional upheaval to take stock of your financial situation. If your husband dies, his assets can be frozen until his will is settled. If he leaves, what is to stop him clearing out the bank account? Women need to know the details of their family finances and take control of their own money – not necessarily with a bleak future picture in their minds, perhaps merely to be a part of the future they are living towards, together. There are some essentials women should keep in mind, even if you disregard every bit of advice given so far. Make sure you and your husband have a will and you know what is in it. Ideally you should create this together. Know whether your spouse is insured and with what company. Ideally you should discuss life insurance and consider whether the insurance will answer possible needs. Know where important papers, such as the will and investment certificates are kept. Keep a list of all the institutions where you and your husband have accounts. If you are truly partners, you will be attending to financial matters, together. Have your own bank account, even if you and your husband only keep a minimal amount of funds in it – perhaps enough to keep you afloat, should the unforeseen occur. Keep a list of any assets you yourself brought into a marriage, such as furniture, an inheritance or a large amount of savings. Establish your own retirement savings plan. If you do not work outside the home, insist that your husband contribute to separate savings for you. This is good tax planning for both of you. Whatever you do or choose – become involved in your personal financial plan. It is interesting that the emancipation of women is almost forgotten, but females have not taken charge of their own financial futures.
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