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4 Key Tips for Women to Take Charge of Their Money
Too busy playing multiple roles and don’t have time to read this in full? Here’s a quick summary:
– Nearly 30% of HNW women aged 35 and older in Singapore are not confident that they are fully on track to achieve their retirement goals, a recent study by Prudential reveals.
– As women, we should take care of our finances just as we would our physical appearance with a rigorous skincare or workout routine! This will secure your independence and allow you to pamper yourself at any stage in life.
– Make sure to track your expenses, invest to grow your money, leverage on digital tools and insure yourself and your family against unforeseen events.
Challenges faced by the modern woman
The modern woman is expected to play several roles–caring partner, loving mother, selfless caregiver, a capable employee and empowering boss. She not only has to break the glass ceiling, but also take care of her family. With so many responsibilities, it may be challenging to think about personal finances. But financial independence is not just about how much money or assets you have accumulated. It is about making smart money decisions to secure the lifestyle you want in the future.
According to a study commissioned by Prudential in Year 2021, which surveyed around 250 high net worth (HNW) women aged 35 and older in Singapore, nearly 30 percent are not confident that they are fully on track to achieve their retirement goals. This is despite having personal wealth of almost S$2 million, comprising of savings and investments across various instruments such as real estate, stocks and bonds. Close to half of them said insufficient knowledge of wealth management is a key factor fuelling their financial insecurity. Realistically, juggling both career and family is already a challenge for many women today, but societal expectations have even raised the bar in some developed nations.
Why it is important to take charge of your finances
If you’re not already convinced, here are some other reasons to take your finances seriously.
1. You need to treat yourself
Being self-sufficient can bear many fruits. This applies to both single and married women. Having full control of your finances allows you to pamper yourself, splurge on the occasional luxury item, go for fine-dining experience, or relax on a well-deserved spa/staycation. It can also enable you to support your elderly parents or donate to a meaningful cause.
2. Your financial behaviour impacts others
Managing your money well can have a positive impact on your friends, kids and those around you. Children learn by example, friends may feel inspired and influenced too over casual dinner conversations. So by being financially responsible for your own expenses, people around you will learn the importance of managing their own money and being self-sufficient.
How to take charge of your finances
If you are ready to finally take charge, here are a few handy steps that will help you on your financial journey.
Step 1: Track your earnings vs expenses
The first step to balancing your finances, is to know how much comes in and how much goes out. Review your latest bank statements and track how much income you had for the month, and how much and where your money went. Then you need to come up with a written budget so you can manage both your desired lifestyle and financial goals.
The 50-30-20 Rule is a great way to allocate your money. This rule allocates 50% of your monthly cash on needs, 30% on wants, and 20% as savings. Your needs include bills such as rent, utilities, internet and groceries. Wants include things that are nice to have but not very necessary such as shopping or eating out. For savings, this money would go to your emergency fund and long-term goals like retirement.
Once your plan is set, use your savings to build up your emergency fund to cover at least three to six months of living costs. This fund will help to cover unexpected expenses such as losing your job or being in a car accident.
Consider putting your money to work by investing them. Investments take many forms, and it can take the form of company shares, real estate, bonds, or unit trusts, depending on your risk tolerance financial situation and financial goals.
If investing seems daunting to you, you might want to consider unit trusts which is managed by a professional fund manager or a team of managers. It is made up of money pooled from multiple investors, and invested in a variety of assets to meet an investment objective.
In addition, you can remove the risk of trying to time the market by setting up a Regular Savings Plan (RSP) and invest a fixed amount every month. RSP takes advantage of the concept of dollar-cost averaging, enabling you to spread out your investments over a longer period to mitigate timing risks and emotional decision-making. RSPs generally help investors accumulate their wealth over time and are typically more affordable for those on tight budgets because you can start with a monthly amount of $100.
And if you’re interested in any specific causes such as environmental or social causes, there are thematic funds that can align to your interests while helping you grow your money. For example, ESG (Environmental, Social and Governance) investing allows you to support businesses committed to driving positive changes in society as well as the environment.
Step 3: Save time with digital tools
Juggling a full-time job with household duties, spending time with your kids or taking care of your ageing parents can leave many women with little free time or energy to manage their investments.
Leveraging digital tools and platforms will help reduce the time it takes to manage your finances and allow you to invest on the go, thus you can focus more time on family, career, and leisure.
The SC Goals Planner is a holistic financial planning tool that takes your entire family’s goals into account. It allows you to plan individual or joint savings, expenditure and properties that are yours alone or your partner’s or under the both of you. You can simulate potential disruptions such as unemployment, critical illness, death and more. It offers a consolidated view of your net worth, cash flow and savings, as well as predicts when your money will ‘run out’ taking into account your assets and investments. It helps you assess your financial situation and plan as you journey through every life-stages towards achieving your financial goals.
If you prefer to invest directly into companies, SC Online Trading enables you to invest and trade on the stock market with just a few clicks. Apart from the access to 12 major stock exchanges around the world, the platform offers tools to help you analyse market movements, identify the market entry or exit points, and notifies you when stocks in your watchlist hit your desired price.
If you’re not confident enough to invest directly into companies, SC Online UT platform with over 300 fund offerings, enables you to tap on professionally managed unit trusts, spanning across many asset classes, sectors and markets. The interactive fund library has all the fund comparisons and fact sheets for you to find out more on each fund. Additionally, the platform also enables you to complete your transactions and track the performance of your fund holdings conveniently.
Step 4: Insure yourself & your family
We have emphasised the importance of saving and investing. Remember that it is all to help you achieve your financial goals. But all the efforts you place into growing your wealth may be fruitless if you and your family are not properly protected against unforeseen circumstances.
Without proper insurance coverage, hefty bills can place a strain on your finances. While basic health insurance coverage is offered to all Singaporeans under MediShield Life, it is important to consider other types of private insurance for higher and wider coverage, with some insurance plans provide cash pay-outs when you are hospitalised or unable to work for a prolonged period. Additionally, do not rely entirely on the insurance provided by your employer as it will no longer be available once you leave the company.
As a woman, you wear many different hats – a career professional, a mother, a spouse and/or a caregiver. Financial independence enables you to pursue an enriched life, without having to make unnecessary sacrifices to make ends meet. Take charge of your finances by equipping yourself with the right knowledge, tools and resources. Speak to Standard Chartered’s Relationship Managers or visit any of our branches to learn how to manage and grow your wealth today.
This article is for general information only and it does not constitute an offer, recommendation or solicitation of an offer to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This article has not been prepared for any particular person or class of persons and does not constitute and should not be construed as investment advice or an investment recommendation. It has been prepared without regard to the specific investment objectives, financial situation or particular needs of any person or class of persons. You should seek advice from a licensed or an exempt financial adviser on the suitability of a product for you, taking into account these factors before making a commitment to purchase any product or invest in an investment. In the event that you choose not to seek advice from a licensed or an exempt financial adviser, you should carefully consider whether the product or service described herein is suitable for you.
You are fully responsible for your investment decision, including whether SC Online Trading and Online UT platform are suitable for you. The products/services involved are not principal-protected and you may lose all or part of your original investment amount. Standard Chartered Bank (Singapore) Limited will not accept any responsibility or liability of any kind, with respect to the accuracy or completeness of information in this article.
Deposit Insurance Scheme
Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.
The information stated in this article is accurate as at the date of publication.