Single women rising to the top, but are we robbing our future selves?

Financial planning key for single career women

South African, single women are making their mark on the property front, reflecting global economic trends.

With the high unemployment rate South Africa is experiencing, it is reckless not to protect your income. Picture: 123RF/ANDRIY POPOV
With the high unemployment rate South Africa is experiencing, it is reckless not to protect your income. Picture: 123RF/ANDRIY POPOV

A recent study done by research group Lightstone shows that in 2017 and 2018, single women bought the most properties compared with single men and married couples. This reflects trends in the global economy where women are:

  • Marrying later: the rush to become a wife and mother to 2.5 children has died down. Women are striving for academic, post-matric excellence, of which the demands of studying cannot be understated. The rise and growth of the ‘career woman’ continues – long hours and high stress pressures result in a delay in committing to marriage and/or motherhood.
  • Initiating divorce proceedings: how we view marriage and its longevity has also changed. We are no longer bound by the thought that divorce equals failure as a human. Countless reasons lead to divorce, but the increase in the number of divorce proceedings being initiated by women is noteworthy. According to Statistics South Africa, 51% of divorces were initiated by the wives.

With that said, there is an undeniable increase in women’s purchasing power and they are not shy to spend. The single women won in volume but scored the lowest for the average sale value. This is a direct consequence of the gender-based discriminations that women face, such as the wage gap, where on average women earn less than men.

Also, women-headed households in South Africa have increased over the years, and that has created a dual-role where a woman is both the nurturer and provider. It is not surprising to see more women are buying homes as a way of creating long-term wealth or to leave a legacy for their children and/or loved ones.

My sense of pride in the Lightstone findings was short-lived as I quickly remembered a consultation I had with a female client who had recently bought a property. She was, however, unaware of the monthly premium of the credit life insurance attached to her bond and how it worked. I then wondered:

  • How many of us have started this journey to financial freedom and wealth without considering how to protect our assets?
  • Do we know who or what we need protection against?
  • How will we pass our assets to our heirs?

The financial commitments we are making now are often linked to our current income. With the high retrenchment rate and disability and severe illness claim statistics, our income is not guaranteed. So, the promise to fulfil our financial obligation is then open to not coming to fruition. Protecting your ability to earn an income and other assets is easy and takes a few steps to implement. Here are my tips on getting started:

  • Draft a valid and executable will

The pain of loved ones fighting for a home or possessions is unnecessary. A valid will allows you to protect your minor children and heirs so that their inheritance goes to them as you’ve wished. Without a will, your estate will be dealt with in a rigid law which may result in your assets being sold, or worse, the then live-in partner getting a portion of the house you bought for your children.

  • Transfer your financial risk

There is no greater asset than your ability to earn an income. Once that is lost, you may not be able to maintain your lifestyle for more than a couple of months. With the high unemployment rate South Africa is experiencing, it is reckless not to protect your income. A friend of a client got retrenched a few weeks ago and only then did she realise the need for such protection. Unfortunately, it was too late for her, now she must use her pension savings to support herself and family until she finds another job. Insurance is no longer a grudge buy, but a necessity.

  • Prepare for after retirement

We often think of retirement as a luxurious time of travel and endless beautiful sunsets at the beach. Well, for most of us, that will only be true in our dreams. As women, our financial resources go for the now and honestly, we seem to fall short at times. We are robbing ourselves of a chance to provide for our post-retirement financial needs when we don’t put ourselves first and invest in our future selves. Take the time to consult a financial adviser for your personal plan.

The words of Emily Taft Douglas ring loud and true. She said: “If women understood and exercised their power, they could remake the world.”

* Trudy Luthuli is an independent financial adviser and partner at Luthuli Capital

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