Money, maintenance and female purses

2013-04-14 14:00

Maya Fisher-French discusses why we need to take financial literacy for women more seriously.

As a panellist at next week’s global Financial Literacy and Education Summit in Chicago, I will be joining other personal-finance journalists from across the world to provide a perspective on women and financial literacy.

This has led my thoughts to the issue of women and money – what issues do women face in South Africa, specifically, and what experiences do we share with other countries?

There are two societal features that make women inherently more financially vulnerable than men.

Firstly, the FinMark Trust Financial Vulnerability Index found females, on average, still earn less than males. A Careers24 survey found that the average salary for a woman was 30% lower than the average salary for a man.

Secondly, many women are alone in supporting their children.

A survey conducted for the Old Mutual Savings and Investment Monitor found that, out of the urban working mothers interviewed, 56% were single mothers.

In single-mother households, only about one in two fathers make a financial contribution to support their children, and only 21% make a contribution on a regular basis.

A survey by a large debt-counselling company found that 75% of female applicants for debt review are single mothers, of whom fewer than 35% receive any maintenance at all from the fathers and fewer than 10% receive regular maintenance.

It is not surprising that so many single mothers are facing a debt crisis considering that, according to Old Mutual, a woman earning R15?000 a month and raising a child on her own could not make ends meet on her salary, let alone have extra to save for her retirement or an emergency fund.

Single mothers literally live from salary to salary.

It will be interesting to see if this experience is shared by other countries, or if South Africa has a particularly high prevalence of mothers acting as the sole breadwinners.

A trend that does seem to be globally prevalent is the general lack of confidence women show when investing their money.

Research in the US has found women typically avoid more “risky” investments, such as shares, and are also generally less confident in their money-management skills.

The Visa Women Money Matters survey conducted in South Africa found that 57% of women get their advice either from a partner or a family member and only 27% use a financial adviser.

It also found only 2% of women invest directly in shares.

When asked about their worst investment decisions, “buying shares” topped the list.

Women tend to prefer cash and property as their main investments.

Although this more cautious approach means fewer women are taken in by scams, it has serious consequences on long-term retirement savings.

Women do not have enough exposure to growth assets, yet tend to live seven years longer than men.

The good news I will be sharing at the global summit is that this trend is changing in South Africa.

As employment opportunities improve for women, we are seeing an increase in the desire for financial independence.

More women are seeking financial education: women tend to outnumber men at financial workshops and are asking the tougher questions.

This is creating an environment not only to improve women’s financial literacy, but to improve the financial health of South Africa’s many female-led households.

Through her role as a caregiver, a woman’s impact on her community is significant.

By empowering a woman, you empower a community.

»?If you have any questions or comments on women and financial literacy you would like to have raised at the summit, tweet questions to @mayaonmoney and use the event hashtag #FinLitSummit. Key questions received on Twitter will be answered by the panel during a live webcast

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