5 Steps to financial resilience every woman should know

5 Steps to financial resilience every woman should know

How easily can you bounce back from life’s nasty shocks? Here, experts share the importance of financial resilience, especially for women, and how to get on track to future-proofing your finances.

How we understand financial resilience now

On its own, resilience refers to our ability to bounce back from life’s unplanned events, or to ‘roll with the punches’. As the authors of an article titled ‘Positive mental health and its relationship with resilience’ published in Industrial Psychiatry Journal explain, “Resilience is often discussed as that aspect of mental health and coping which is paramount to the ability to spring back during adverse circumstances. The mention of positive health necessarily recounts on the ability to withstand and cope with stress adaptively.” Needless to say, resilience is intrinsically linked to our positive mental health, and financial resilience is no exception.

“Financial resilience impacts our wellbeing in so far as it is a measure of our capacity to meet our day-to-day needs as fully-fledged adults in all our relationships and roles,” says clinical psychologist Linda Da Silva. She also describes it as a layer of protection against trauma. “In this instance, trauma is to psychologically experience the effects of loss of agency and autonomy, i.e. to be rendered helpless,” she adds.

From a financial planning perspective, it’s the ability to make the necessary changes to your financial ‘road map’ to ensure that your end goal is still met in the face of unforeseen life events or circumstances, says Jyoti Gopee, a financial planner at Pinnacle BlueStar, underwritten by Sanlam.

Women’s financial resilience matters more than ever before

40%. That’s the proportion of South African mothers that are single parents, according to the Human Sciences Research Council (HSRC). It’s also the fraction of marriages that end in divorce before they can celebrate their tenth anniversary. Add to this Payscale.com’s data, which shows that women still don’t earn equal median salaries to men for like-for-like work in 2020, and it’s fair to suggest that post-divorce, a woman could bear a heavier financial burden, having likely relied partly on her partner for financial support in marriage.

So, what does this say about women’s needs? Financial resilience is key to their health, wealth and peace of mind.

“In so far as financial resilience is an important aspect of being able to function as an adult, it is particularly important for women, who have historically and disproportionately been excluded from access to equal economic participation and opportunity,” explains Da Silva.

Salary comparisons aside, there’s the unavoidable break from work that many women take to start a family, to be present in raising their children, which means a setback in reaching career goals. “What this all adds up to is that women, by definition, have a harder time achieving their financial independence,” says Marusha Nadar, a financial planner at Ravi Naidoo’s Financial Solutions. “That can leave them socially and economically vulnerable to the three deadly financial Ds if they are reliant on their partners: divorce, death and desertion.”

Separate to enabling women to stand on their own and forge their own journey to financial security, there’s also an emotional resilience component that ties into this. “Financial resilience is especially important for women’s own self-worth,” says Gopee. Independence means the power to choose, and this is the key to freedom. This has different applications, as Nadar explains: “The most important way women can empower themselves is by being financially independent. This allows them to have choices – be it to leave an abusive or controlling relationship, or simply take time out between jobs, if so desired.”

The benefits of financial resilience in a woman’s life has a positive domino effect too, one that can set future generations up for financially sound decision-making. “A woman’s financial empowerment also means her children will be groomed to practise healthy financial management habits from a young age,” explains Gopee. “The number of divorced single mothers is escalating at an alarming rate; these mothers need to have a larger emergency fund available – to cater for the needs of themselves and their children,” she adds.

How to build financial resilience

Becoming financially resilient is a journey on its own, and the benefits are something every woman should have access to, in order to soften the blow of life’s surprises. So, where to begin? These 5 steps are a good starting point:

Steps to take
1. Round up your supporters
Few things match the satisfaction of reaching a savings goal or other financial milestone (perhaps purchasing a property, or starting a business), especially when it’s been your dream or goal for months or even years. Don’t be afraid to set your sights on whatever financial goals are important to you – then having the courage, discipline and perseverance to meet them.

Your social circle plays a significant role in your discipline, so be intentional about who you share your goals with and who will help you on the path to realising them. “It becomes easier to remain committed to your goals if you surround yourself with focused, goal-oriented individuals,” says Gopee. “Your social crowd is a very important influential factor on your behaviour pattern.”

Break the taboo of hiding away from money conversations – instead, face them head on and enjoy the benefits of learning from and supporting each other. Here’s how to start.

2. Plan like you mean it
Think beyond budgeting for this weekend’s grocery shop, or next week’s family gathering. What about the year-end holidays and birthdays? Plan in advance for these larger expenses, whether they take the form of extra mouths to feed, or gifts to buy. “You can save money by planning at least two to three months ahead of expensive occasions; this reduces the risk of impulsive and unnecessary buying,” suggests Gopee.

Besides planning for the money in your pocket, Nadar also notes the importance of planning for life’s curveballs. “If you are working for an employer, check your employee benefits annually,” she suggests. “And take out relevant insurance, depending on your needs,” she adds.

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3. Get serious about saving
“Think about creating a savings plan and put away a little contribution regularly to build up your cash safety net,” suggests Nadar. It’s fine to start small, but Gopee suggests aiming to have three different savings platforms, for example:
1. A savings account with the bank (with easy transfers from your cheque account)
2. A cost-effective, user-friendly solution with an aggressive strategy – Satrix–  or EasyEquities-based savings
3. A fixed savings element with a longer-term horizon (BEE shares, RSA Retail Bonds or tax-free savings account (TFSA))

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4. Stay disciplined
This could mean a savings mindset adjustment, but you’ll thank us. Instead of putting away whatever money you have left at the end of the month, be intentional about saving first for future you, then spending what is left over. “Don’t wait to save what is left of your salary,” cautions Gopee. “Your savings solution should be funded by setting up a debit order every month,” she suggests.

Separate to the traditional concept of saving (i.e. contributing money to a fund), think about the daily habits in your life that could be tweaked to help you save, for example, grocery shopping, subscriptions and takeaway coffees. Want to know the key to forming healthy habits that stick? Help is here.

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5. Reward yourself
“Saving is important, but self-care and investing in self-awareness is important too (not necessarily the five dresses and three pairs of shoes you have your eye on),” says Gopee. In other words, balance out the discipline of saving and being diligent about building your financial resilience with investing in yourself right now too. Gopee explains: “Our actions flow from within. This includes financial planning decisions. For example, if you have a sense of low self-esteem, it will be difficult to maintain the discipline of saving, as you will feel that you are not deserving of the effort.” She suggests investing in maintaining a healthy body, and a fresh and active mind.

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A qualified financial planner is best positioned to help you make decisions to bolster your resilience to get through life’s uncertain times, and protect you and your loved ones for financial peace of mind. Book a meeting with one today.

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