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Women and finance: How well do you know yourself financially?

The first step to becoming financially independent and wealthy is to know yourself.

National Women’s Day is a South African public holiday celebrated annually on August 9 and draws attention to many of the important issues that women in South Africa still face – such as domestic violence, discrimination and harassment in the workplace, education for girls, equal pay and more.

Unfortunately, when it comes to money and finance, the odds are often stacked against women. “A woman in a man’s world” as described by Magda Wierzycka in her book My Journey explains that women typically earn less than men for the same amount of work, they take time out of their jobs to raise children, setting their career progress back and they also spend more working hours doing unpaid labour such as housework.

In our country, many women do not have formal employment and do not make any provision for retirement savings thereby forcing them to rely on their husbands to provide for them. Not only do many women lack the means but they also lack the awareness and skills to plan for the day when they are no longer able to work.

Know yourself

In his book Financial freedom for Women (soon to be updated), Bruce Cameron provides a practical exercise to score yourself and to get an idea of where you find yourself financially – he calls it “know yourself”.

The first step to becoming financially independent and wealthy is to know yourself. Many people, including women, do not get ahead financially because they keep making the same mistakes. The reason for this is that they do not know themselves and they do not have a plan.

Score yourself

Answer the following questions and see how you fare in knowing yourself financially.

In Part One give yourself one point for every “No” answer. In Part Two give yourself one point for every “Yes” answer.

PART ONE (give yourself one point for every “No” answer)

Question No
Do you avoid taking financial decisions?  
Are you afraid of making financial decisions?  
Do you doubt your ability to take financial decisions?  
Do you allow others to make your financial decisions?  
Do you feel you are always in debt?  
Do you believe your financial future will take care of itself?  
Do you believe to have money is materialistic?  
Do you rely on someone else for the money you have?  
Do you feel your financial position never improves?  
Do you depend on someone else to provide for you financially?  
Sub Total  

PART TWO (give yourself one point for every “Yes” answer)

Question Yes
Do you feel financially successful?  
Are you in control of your money?  
Are you in control of your spending?  
Do you save money?  
Do you have a savings plan?  
Do you know the value of what you own?  
Do you know how much debt you have?  
Do you invest in unit trusts?  
Do you understand the power of compound interest?  
Do you have a retirement plan?  
Sub total  

 

Total Points

How did you score?

Zero to nine points

You are clearly locked into a dependency cycle, or your finances are in a chaotic state from which you need to break free. You are probably badly in debt and do not know how to get out of it. You desperately need assistance to get yourself on course. You need to tell yourself you can succeed, and that you can take charge of your own finances.

You should start by assessing all your strengths. (Forget about what you presume to be your weaknesses). Tell yourself you can succeed. If you can multiply five by five you can take control of your finances. You must give yourself the power to change your life. By educating yourself about money, budgeting, and investments you will increase your self-confidence.

Nine to 15 points

You have a hit-and-miss approach to your finances. You know you must do certain things, but you do not have a real plan to bring everything together. You need to learn how to structure your financial plans properly and probably not to spend impetuously. You also need to be a bit more assertive about your financial plans.

16 to 19 points

You are well on your way to controlling your financial future. You already have the confidence and the basic knowledge. You probably only need to have a bit more structure to your plans.

20 points

Congratulations you are in control of your life, but do not stop now it is an ongoing process and you need to work on it daily.

Most people don’t plan to fail – they fail to plan

Financial failure is not only caused by stupidity. Look at nearly every financial failure and almost without doubt you will find the cause is the lack of realistic and proper planning. This applies as much to an individual as it does to a business venture. If you have a well-constructed plan, you are more likely to succeed.

Seek advice from a qualified Certified Financial Planner (CFP) – not all advisors are CFPs.

Wouter Fourie, CFP®, is the CEO of Ascor Independent Wealth Managers www.ascor.co.za , author on retirement and investments and previous financial planner of the year. Please visit www.retirementplanning.co.za for more information on the best-selling books “The Ultimate Guide to retirement in South Africa” and “Secure your Retirement”, which were written by Wouter Fourie and his co-author, Bruce Cameron.

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Wouter Fourie

Ascor® Independent Wealth Managers

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