A marriage partner is not a financial plan. Eloise Boezak, the Head of Customer Experience for African Bank, said a common mistake made by many women was to rely on a spouse for financial security and for retirement.
Boezak said this was not advisable, as in the event of a divorce, separation, or the death of a spouse, some women were left penniless and often took years to get back on their feet.
“Be in control of your finances, of what you are spending and saving, and of what you own at all times. Planning for your retirement should be a priority from the day you start working,” she stated.
Boezak has provided information on the five common pitfalls which can financial hinder a woman’s future:
- A lack of understanding of the implications of the marriage contract (ante-nuptial or in community of property): Boezak explained there is no such thing as a ‘common law partnership’ in South Africa? Co-habitating partners have no legal duty to support each other financially during the relationship or afterwards if it should end.
- Choosing to stop work to raise your children: This big decision could cause the loss of work benefits like medical aid and pension for the period where one is not working. Boezak said there is also a mental mind shift from being independent to becoming reliant on a spouse or partner for money – “Ensure you are both clear on the importance of protecting your financial future if you decide to swap work title for that of stay-at-home mom.”
- Neglecting to save: A nest egg needs to be nurtured, and the best way to grow money is in a high-interest savings account. According to Boezak, saving for the future should be as much of a priority as paying off debt. The longer money is not saved, the longer one will have to work and the more one will have to save at an older age. Her easy tips for saving include setting up a debit order and keeping cheque and savings accounts separate, to help stop impulsive spending.
- Not budgeting: Tracking monthly expenses has numerous benefits, added Boezak. Failing to budget can often lead to overspending on credit cards, leading in turn to high debt and unnecessary stress. She said there were many budgeting tips online, as well as apps to make this process simpler – “Soon you will be excited to check up on your spending – and can reward yourself for a good month!”
- No emergency funds: Boezak commented that life is full of unexpected events and even more so amid the Covid-19 pandemic – “Loss of income, illness and an unexpected death in the family are all part of our life now. Save for these and other emergencies by ensuring you have at least three to six months’ worth of living expenses in the bank.”
Boezak concluded it was also a good idea to invest wisely from a young age.
“There are several options which require a minimum investment and which offer good returns. Investing in a fixed deposit, notice deposit, access accumulator or into a tax-free option is a good way to set yourself up for financial freedom in the future.”
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