Women are the mothers, nurses, housekeepers, chefs, entrepreneurs and in most cases the financial backbone of many South African households and their communities. Michele Obama says ‘that when women are educated, their countries become stronger and more prosperous’ – therefore efforts to improve their financial wellbeing and literacy needs to be prioritised to help build a financially resilient nation.
Understanding Financial Literacy
The International Network on Financial Education (INFE) defines financial literacy as a combination of awareness, knowledge, skill, attitude, and behaviour to make sound financial decisions and ultimately achieve individual financial wellbeing. So how can the everyday South African woman, improve their financial wellbeing?
The Current State of Women’s Financial Wellbeing in South Africa
When looking at the South African landscape, whilst woman constitute 51.3% of the population, only 35% of woman are employed compared to 46.1% of men (Statista: 2022). Of those employed, a study conducted by SA-TIED in 2021, found that women earn less than men, approximately 78 cents for every Rand. Research from Debt Busters shows that woman between the ages of 30 and 40 have the most debt and are in financial distress. In 2023, less than a third of South Africans were considered financially literate, with women continuing to lag behind men in financial knowledge, as highlighted by the OECD/INFE survey and the 2021 FSCA Baseline study for Financial Literacy conducted by the Human Sciences Research Council (HSRC).
Low employment, low income, debt and a lack of financial knowledge is dismal, however women have been doing a lot with so little for generations and they can empower and influence communities and societies at large.
Steps to Kick-Start Your Journey to Financial Wellness
Here are 5 easy steps women can implement to kick-start their journey to financial wellness:
- Take control of your finances – Know who you owe and how much you owe them
- Create a budget
- Consider emergency savings
- Think about retirement
- Speak to an authorised financial advisor
Step 1: Know who you owe and how much you owe them
Don’t let debt weigh you down with feelings of guilt or shame. Instead, face it head-on. Start by getting a free credit report from any credit bureau. This will give you a clear picture of who you owe and how much you owe them. Sometimes, you might even find accounts in your name that you didn’t authorize—these can be disputed with the retailer and the credit bureau.
Once you have this information, create a list of all your debts, noting the minimum payment due for each. Incorporate these payments into your budget. If your expenses outweigh your income, it’s time to explore some alternative ideas:
- Contact your creditors and negotiate a minimum payment that works for you, then adjust your budget accordingly.
- Try not to take on additional debt and to use credit to buy disposable items such as groceries.
- Instead of cancelling policies or letting them lapse, speak to your insurer on other options available so that you do not forfeit important financial products.
- If you receive a bonus or lump sum, consider requesting a settlement amount from your creditors—this is often less than the full amount owed.
- Consider seeking help from a debt counsellor or enrolling in a debt review program as a last resort and be sure to know the pros and cons of such a process.
There are certain strategies that you can apply to reduce your expenses in order to settle your debt and free up some funds such as using public transport or carpooling to work, packing a home-made lunch instead of purchasing lunch daily, socialise at home, find creative ways to liven up your current wardrobe, lay-bye or start a side hustle. Try to pay off debt as fast as you can to avoid expensive interest charges.
Step 2: Master your budgeting skills
A budget is a plan that details how you are going to spend your income. Through a budget, you will notice your spending behaviour an identified unnecessary or luxury spending patterns. Add up your income and subtract your expenses, this should give you a deficit or a surplus. i.e. either you spend too much, or you are within budget and have money left over after you have paid all your expenses.
In creating a budget, women can apply the 50, 30, and 20% rule to their income – with 50% allocated towards their needs (electricity, water bills, transport and education fees), 30% reserved for wants (clothes, entertainment or a holiday), and 20% towards savings (Retirement Annuities, unit trusts, tax free savings or endowments). A budget can help one keep track of exactly where their money is going instead of wondering where it went. The above step sounds easy but it’s a lifelong skill to master one’s budget especially with changing needs or high debt.
Consider making cash purchases or taking items on layby until you have settled some of your debt. Speaking to your household and managing expectations can also lessen the financial burden on you.
Step 3: Dream big and save
Yes, it’s possible to pay off debt and save. Once you have started comfortably paying your debt repayments, set aside funds towards your goals. Write down your goals and the financial value of achieving those goals, by using the SMART (Specific, Measurable, Attainable, Realistic and Timeline) principle. Goals can be short-term 6 months to 2 years, medium 3-5 years, or even long-term which is longer than 5 years. It is important to write goals according to priorities, which must be accompanied by a list of actions that women need to take to reach their goals.
An example of a SMART goal is:
Sarah wants to go to Thailand in January 2027. It will cost her R24 000. She will start saving from January 2025. She has 24 months to save, that’s R1000 per month.
Ensure that you regularly review your financial goals. Monitor and adjust your progress. Implement some changes, such as reviewing your budget or goals and remember that these exercises take time, patience and determination. As mentioned in step 1, interest works negatively on your debt, but can work positively towards your savings. Consider saving in an interest baring account. Shop around for the best savings vehicle for you or consider speaking to an expert as per step 5.
In addition to saving for your dreams and goals, include emergency savings as a line item in your budget. Experts advise saving at least three months’ income to start with. The FSCA recommends that this will help with unplanned financial emergencies that may require large sums of money.
Step 4: No better time than now to save for retirement
Given the plethora of stories of women being saddled with taking care of grandchildren and in some cases extended family members even in their old age, the regulatory authority is encouraging women to start saving towards retirement sooner rather than later. Retirement funds are designed to take advantage of tax structures, where you pay less tax the more you save. Visit www.fscamymoney.co.za for resources on planning for retirement.
Step 5: There are experts that can help
You don’t have to navigate your financial journey alone. A qualified financial advisor or services provider can help you set and achieve your financial goals, whether it’s saving, tackling debt, or investing in financial products like insurance or retirement annuities. They do this by conducting a financial needs analysis and affordability assessment and advise you in accordance with your financial goals and risk appetite which financial products to buy.
Your financial advisor must be qualified, experienced, and honest, and more than anything have your best interests at heart, to enable you to articulate, prioritise, and action your short-term and long-term goals.
Check that your financial advisor is authorised by the Financial Sector Conduct Authority (FSCA) to sell you financial products and services and confirm with the FSCA which financial products and services he/she is authorised to sell you by emailing enquriies@fsca.co.za or call 0800 20 3722.
Empowering women with financial literacy is more than just managing money—it’s about influencing communities and shaping societies. By mastering financial basics, women can curb impulse buying, reduce debt, and save for the future. As Desmond Tutu wisely said, “If we are going to see real development in the world, then our best investment is WOMEN!”
