DOES financial planning differ between men and women? According to historical data, women tend to live longer than men. Certainly, women need a more comprehensive plan based on their longer lifespan.
Studies have shown that women use more healthcare services than men. When it comes to financial planning, women may want to take this into consideration.
Fact aside, there’s some debate about women and money. Let’s debunk a few ‘funny’ myths we may have come across:
In our work with couples regarding investment, we find that women are generally risk-averse. The reason women tend to protect their money is further explored. In order to protect their families, women prefer not to take risks.
When a spouse takes a greater financial risk, women tend to put their money into safe vehicles like fixed deposits.
Couples are encouraged to communicate about financial planning. Once financial goals and objectives are clarified, women can re-evaluate their financial decisions. Women can allocate their portfolios to fit their risk appetite and still leave an emergency fund for their families.
- Women are bad in financial planning
Does bad mathematics equal bad financial planning? Most people are not interested in numbers, especially when they are complicated.
Before money existed, women planned the necessities at home. Women made sure that there was enough food to ration for as long as possible.
This explains why in today’s world, most women detest debts. As a result, women’s financial planning instinct may benefit from the history and characteristics related to their past role as a homemaker.
In the event of a financial crisis in our family, our mother tends to come to the rescue most of the time. At the end of the day, women may have a good sense when it comes to financial planning.
- Women spend more on sales
Sales-related events are happening almost every day to attract spending. Women can overspend on clothing and other items, while others might shop for the best bargains and stock up on the essentials at home.
It is not uncommon for women to start planning for the next round of sales even when the on-going sales have only just commenced.
For example, a family may consume a roll of toilet paper that costs RM15. During sales, it is wise to shore up a few more rolls if the discount is greater than the interest earned on a savings account or fixed deposit.
This explains why smart women consumers may stock up on great deals without overspending until the next sale. Maybe the extra savings from the discount explains why women deserve another outfit.
- Retirement savings are not necessary for housewives
Most likely, housewives don’t contribute to retirement savings because they do not earn any income. There is no guarantee that the breadwinner will plan for retirement.
It is a good idea to take responsibility for your own financial planning even among housewives. Some housewives set aside a certain portion of the breadwinner’s allowance for retirement. Optionally, housewives can save through Employees Provident Fund (EPF) contributions via special incentive under i-Suri.
To conclude, women are natural homemakers with instincts to protect their homes. Women tend to make safer investments and get more bargains out of sales. But the fact remains that it is necessary for housewives to plan for their retirement.
Kelly Wong, CFP is a CEO of Alpine Advisory Sdn Bhd and a certified member of the Financial Planning Association of Malaysia (FPAM).