Dubai: It used to be that women would depend on men for money. These days, women are marrying later or not at all. And when they do get married, women earn a living and share the financial responsibility with men.
But, many women still procrastinate over financial planning and investing, as they feel overwhelmed by other priorities.
Tracey Hughes, a consultant at Acuma - Independent Financial Advice — in Abu Dhabi, said that the fundamentals of financial planning for women are not so different to men, but certain circumstances unique to them make it all the more important for them to take their financial affairs seriously.
“Women do have the added complications specific to them, such as longer lifespan and staggered career paths, making it so important to plan ahead,” said Hughes.
“It is true to say that men and women are not always on the same page when they think about the issues like money and happiness, kids’ future and their own future. Women tend to look at the what if’s in life — what if my husband dies, can I pay the mortgage? Will I have to work? What if I get a critical illness, who will look after the kids? The house?” added Hughes.
Ashok Sardana, managing director at Continental Group, observed that while women are comfortable with managing their daily household finances, they still rely on their husband or father when it comes to investments or retirement planning.
“Many a times women tend to leave their financial planning to their husband or father. This leaves a massive gap between what is actually needed and the action taken,” Sardana said.
Women should consider the following points when planning their finances:
Consider that you might live longer than your spouse yet receive lesser pension, so plan carefully for your retirement. “The life expectancy for women is higher than men. Statistics show that, on average, women live five years longer than men, earn 25 per cent less during their lifetime and work 11 years less in their careers. This clearly indicates the importance of retirement planning for women,” said Sardana. “Women tend to live longer, however, they tend to work for less time resulting in a smaller pension, gratuity or provident funds. Hence, women should start taking retirement planning seriously, and their amount of retirement saving should also be higher,” he added.
Be prepared to manage your finances alone in case you outlive your husband. You need to be more involved in financial planning with your spouse early on. “It’s very important for them to be informed when it comes to their financial assets and wealth, as the chance are that they will outlive their husband. They should also know how they would manage their finances and lifestyle in the future. An independent bank account and credit card is highly recommended,” Sardana advised.
Many women, about one in four, get diagnosed with critical illness between the age of 40 and 70. It is very important that you consider protecting yourself from the financial burden you may have to go through if diagnosed with critical illness, advised Sardana. “ Besides having a good retirement plan in place, it is very important for women to have a critical illness cover. “Married or single, one of the most important plans to have in place is critical illness cover and where necessary with life cover. Should you be diagnosed with a serious illness, you will soon realise the havoc it will wreck on your finances. Even with health insurance on the side, there are still expenses that will not be covered. And if your illness is critical enough, you may even max out on the limits of your health insurance policy,” added Hughes
If you’re planning to get married, think about the expenses you have to cover when you get pregnant. Prenatal, delivery and postnatal expenses can be a burden on your finances. “Women need to be aware of the importance of having the right medical insurance especially when planning to start a family,” said Sardana. “Also, it is important to make sure that the medical cover is put in place well in advance to account for any waiting periods that may apply. With the price of medical care being expensive, it is imperative that anyone who is pregnant have adequate insurance in order to make sure that both mum and baby are properly cared for before, during and after the pregnancy,” he added.
