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Women make great investors and earn higher returns than men! Which is a good thing! Women live longer than men so they need more money! So are you investing? You should be! It’s one of our five money rules that will help you become financially independent, grow your wealth and become great role models for family, friends and every woman in the country!
Rule #1 Know your money personality
Your money personality is how you use money (spend, save and invest) and how you think about money – which influences how you use money! Knowing yours can help you to stop repeating the same mistakes, and build on your strong points.
Answer these questions to get in touch with your money personality and identify what you’d like to change or improve about yourself!
- Are you open about money or do you never talk about it? Not talking about money can prevent you from saying no when you should (to the night out or holiday) and getting into too much debt!
- Is money a sign of status (the smart car) for you or are you focused on building wealth (the big investment account)? If it is status and you can afford it, no worries! But if you spend all you earn or go into debt to achieve outward signs of affluence, you may never achieve financial independence or build generational wealth.
- Do you live within your means? If yes, great job! If not, you’ll need to identify the reasons why you overspend and think of ways to change – which can be as simple as drawing up and following a budget!
- Do you have financial goals and are you saving towards them or do you have habits that sabotage your goals, such as impulse spending on things you don’t really need? Try to get in touch with your financial habits so you can
If you struggle with this step or cannot make the changes you want to, chat to a money coach to help you to identify your money personality and use your money well!
Rule #2 Always make the time to learn about money
Improve your knowledge, skills and confidence! Read blogs, articles and books about money. Ask questions if you don’t understand and want to learn more. Take courses, such as the financial education course from Truth About Money. Check out money influencers on social media. Share money tips with family and friends.
Money is such a big part of your life so why not make a commitment at the start of each new year to take one financial course to improve your knowledge?
Rule #3 Know the price of everything, negotiate the cost of everything
Ready to get the best deal so you can get the greatest value for your money?
One of the golden rules of budgeting and investing is to track your costs to make sure they don’t get too high! Make a note of the cost of everything you spend money on, from a loaf of bread to your electricity and water bills.
Pay particular attention to “silent” costs such as bank charges and investment fees that are deducted from balances each month. Paying high investment charges reduces your returns, which means you either have to save more or save for longer to achieve your goals. In the case of investment fees, even a small reduction can make a big difference to the end result – you don’t want your hard-earned savings and bank balances eaten up by costs! Compare the bank costs and investment fees you are paying with those of other financial institutions so you can either negotiate or switch!
Rule #4 Invest
Women make great investors! Investing makes your money grow, so that over time you have more! You invest when you put money into the stock market by buying shares directly through a stockbroker or online trading platform (many banks and investment companies offer these, or you can use a company such as EasyEquities) or invest in products such as unit trusts or ETFs (exchange traded funds). You can also invest in property or a business.
Women need to invest – a lot. In South Africa, women live, on average, five years longer than men, according to Stats SA. Five years is a long time! You’ll need five more annual salaries or 60 more paychecks to fund your extra years! Start investing as soon as possible, and you will have those extra funds!
Worried or unsure of how or when or where to invest? You’re not alone! Only a third of women see themselves as investors according to a 2021 Women and Investing Fidelity study. But, women who do invest earn better returns than men – as much as 1.8% more, according to a Warwick Business School study. Commit to point 2 – learn more – and you can develop the knowledge and skills you need to invest! You can also chat to a financial adviser for their advice on how to go about growing your nest egg.
Rule #5 Know your free-work hourly rate
What is your time worth per hour? Work this out so your family knows how much you contribute to the household and the gap it would leave if you weren’t around.
Women do more than two-and-a-half times the amount of unpaid household and care work than men, according to UN Women! Think of how much time you spend shopping, cleaning, cooking, caring for children or relatives – you can work out how many years you spend on this unpaid work on the UN website! You do this out of love, but it can have devastating consequences on your family’s finances:
- It means you have less time to spend earning money (which you will need more of in your lifetime because you live longer than men).
- It is a free benefit your household would have to pay for if you were no longer around.
So what is your time worth? Are you taking it into account when you make financial decisions such as buying enough life insurance or working out who should scale back working hours to care for your children?
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Bonus rule: Build generational wealth for you and your family!
Invest, buy a property, take out life insurance, and stick to your budget so you can build generational wealth for you and your family, generations to come! Don’t forget to share your financial knowledge with your children and family so they can build their wealth too, and use their inherited wealth wisely!
Take charge of your financial destiny
Managing your money well and growing your wealth is a great way to be a role model to your family and friends. It shows you are in charge, in control and can achieve your dreams and financial goals!
