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Financial Planning for WomenFinancial Planning for Women

Is it really necessary?

By Wouter Fourie


 Financial planning is a necessity for both men and women

Many people neglect to plan for their retirement and death or to actively manage their wealth, but it is more acute for women than for men.

At the recent Financial Planning Association (FPA) conference in Boston, USA, delegates from across the world acknowledged that financial planning, investment, retirement and death or disability planning have in the past focused predominantly or even exclusively on men, leaving many women unaware of the need to plan for their future.

This was confirmed by recent research published in the United States, which found that the majority of women are unaware of their options when it comes to planning their wealth or for their eventual death. The research also found that most of the women they polled are unsure of their husband or partner’s investments, plans and policies for their retirement and death.

With women inclined to outlive men, it is important that they actively engage with their personal financial planning and keep track of their husband or partner’s financial portfolio as well. Actively managing your personal finances and keeping track of your partners’ portfolio is important both to protect your and your family’s legacy and ensure the health of the household.

Protecting your legacy

Your legacy may be defined in terms of the wealth that you created over your lifetime, the successful business that you leave behind or your children, and their wellbeing after you are gone.

The first step in protecting your legacy is creating your own living will. The will should be separate from that of your husband or partner and should consider your wishes for both the financial and non-financial aspects of your life. Your will can include items that range from the allocation of your life insurance policies to the custody of your children.

An equally important consideration, for women who are entrepreneurs, is to think about what happens to your business if you pass away. Entrepreneurs often forget about detail such as life insurance on their business partner(s) life or a sale contract of their share of the business. By neglecting these important plans, you leave your family with the difficulty of negotiating with business partners or creditors when you pass away.

Financial Planning for Women - household

Protecting your household

At Ascor® we have often consulted to women who have lost their husband, only to realise that they had no idea of which policies he had, how to claim them or what is stated in his will.

Looking after your household also applies to non-financial considerations, such as custody of children if both partners pass away or the creation of a trust that can hold the family wealth until children are old enough to be good custodians of the money.

To prevent the unexpected from catching you and your family off guard, consider the following steps:

  1. Have the conversation with your husband or partner

It is important to discuss your personal and shared finances regularly. This may be difficult at first, but it will become easier as you regularly return to the conversation and you keep in mind that it is in the best interest of the family.

  1. Have the conversation with a wealth planner

A CERTIFIED FINANCIAL PLANNER® (CFP®) is trained to assess your personal and family’s financial situation and provide the best advice on how to plan and invest for the future. Look for a truly independent advisor who is not beholden to a specific financial service provider and who will then try to force your individual needs into the available products from that provider.

  1. Create a will and review it on occasion

Both partners should have their own will and it should consider your assets and your personal wishes. Review this at least annually, because circumstances and your needs will change over time.

  1. Consider creating an estate directory

If you or your husband or partner passes away, you will invariably find yourself in a lot of emotional turmoil. An estate directory records all your partner’s details, including some often overlooked items such as their mail password, social media accounts and best friends’ contact details. This lightens the burden if you ever find yourself in this emotionally trying time.

  1. Invest for yourself

Many families combine all their finances and often only invest in the husband’s name. While this is not wrong, it is not always sufficient should the husband pass away. Consider creating your own financial portfolio, however small.