by Bea Bongat, on category "Personal Finance"
March 8, 2017
Women are making waves now more than ever in the workplace and in their careers. In all the three fronts – college graduates, increase in annual wages, and presence in male-dominated fields – the numbers continue to increase on a yearly basis. With more opportunities for women today more than ever, they embrace a take-charge attitude when it comes to their careers, finances, and self- development.
The Philippines has the fourth highest proportion of women managers in the world with 47.6% of managers being female. However, when it comes to finances, it isn’t only about earning more and climbing the career ladder. Finances cover a plethora of other factors, such as health, family, and retirement among others.
To give you the lowdown on proper money management, MoneyMax.ph talked to two financially-savvy women, Sha Nacino and Attorney Jill Sabitsana.
Read on for tips on overcoming common money matters women face and how to beat them:
“While many women save, relatively few of them invest,” says Cindy Hounsell, President of the Women’s Institute for a Secure Retirement, in an interview with NPR, a non-profit media organization based in the US.
Women tend to be more conservative when it comes to money, so they prefer to put their money in a savings or checking account. Because of this, many are unaware that investments such as stocks and real estate can provide safe returns when used correctly.
How to beat this: When she was tackling her credit card debt, Jill found out there were multiple online resources related to personal finance. After reading debt-related articles and paying her debts off, Jill began reading about investments and insurance.
As women age, expenses increase as well. From living away from home to starting and raising a family, the expenses seem to never end. Because of this, women are afraid to take risks especially when it comes to money.
A report from Vanguard, an American investment management company, shows that women trade less frequently than men and prefer to invest in target-date funds rather than risky stock options.
How to beat this: Even if investments aren’t guaranteed, women can minimize risk to avoid losses on investments. This can be done by learning from the best through reading books and attending seminars.
For Sha, she invested in the stock market after reading Bo Sanchez’s book “My Maid Invests in the Stock Market.” According to her, “The best way to avoid mistakes is to learn from experts and mentors. Before taking the risk, be it investing or starting a business, educate yourself first.”
Arguing about money is one of the leading causes of divorce. According to the 2013 Institute for Divorce Financial Analysis (IDFA) survey, money issues are the third leading cause, behind incompatibility and infidelity/sexual issues.
Differing money management habits between partners can cause stress and turmoil in the home. One of you is a reckless spender, while the other one is a penny-pincher, and it’s impossible to meet eye-to-eye.
How to beat this: For Jill, she’s thankful she doesn’t experience this.
“I do the entire decision making since I’m the one who’s more interested in personal finance. But I still involve him. I don’t tell him about the weekly grocery expenses, but I involve him for big-ticket expenses, such as buying stocks. I make sure to involve him in that.”
Following Jill’s example, the key is involvement and communication. When you have a partner, it’s best that you talk about one another’s financial concerns and find common ground.
Sha remembers the time she used to work in a bank. Her officemates who had just given birth were having difficulty getting back to the 9-5 grind.
“Na-mi-miss nila yung mga anak nila. Iniisip nila kung nakakain na sila. Struggle talaga para sa kanila na iwanan [sa bahay].”
How to beat this: Sha believes that employers now provide equal and even flexible working opportunities. A number of companies allow their employees to work from home for a certain number of days in a week. This allows the mother to spend more time with her child.
For those who cannot stand to be away from their child completely, another possible solution is to work remotely.
“Sobrang maraming opportunities ang mahahanap sa internet. You can be a virtual assistant or a social media manager.”
According to a PayScale study, women still earn about 1% less than men even in female-dominated professions such as teaching and human resources. The disparity in wages is wider, at 4%, for male-dominated professions such software development, project/construction management, and computer systems administration.
Because of the gap, there is less opportunity for women to earn and save. There are more immediate expenses to consider, such as utility bills and debts, before women can start stashing money away for retirement.
How to beat this: There’s passive and active income. It’s best if you make use of both. Sha suggests:
“Invest 20% of your income in paper assets such as stocks. Then you make your money work for you. That’s the most passive way of earning.”
In addition to that, investing allows you to increase your income streams.
If you feel your salary is just enough to cover your immediate expenses without leaving anything for savings and investments, then it’s time to increase your income sources.
“Use your talents to add value to people’s lives and make money. There are numerous opportunities on the internet to create extra income.”
Jill experienced lifestyle inflation when she felt that she had more than enough money in her bank accounts.
“It was always a pattern. Every time I would feel na nagwawaldas ako, something will happen that will make me feel that my income isn’t enough, so I go back to my money saving habits. Then whenever I would feel that there was more than enough, nagwawaldas ulit ako. The pattern kept on repeating.”
How to beat this:
“Doing something out of necessity is always the best teacher. I was already in a sink-or-swim position with my debts. I was pushed up against the wall, so ‘I had to’ learn and get my finances in order.”
Jill learned, as she looked for ways to tackle her debts, that there were numerous financial freedom blogs. Reading and learning taught her money management habits to keep her expenses in check.
If you find yourself spending more every time your income increases, it’s best to keep your goals in mind to avoid losing track of them. Don’t put yourself in a precarious situation, such as incurring debt, just to learn about money management.
According to an article published in Health Services Research Journal, women spend a third more on healthcare than men. This can be attributed to their longer life expectancy. Also, mammograms, pap smears, and pelvic exams, are expensive lab tests that women should take regularly
A pap smear test in a private hospital can cost around PHP 800. The costs of doing these check-ups once a year or every two years will add up; however, health is wealth, and regular check-ups can save you from a hefty hospitalization bill.
How to beat this: Health insurance is the best solution. Fortunately, in the Philippines, employees are provided with Health Maintenance Organization (HMO) benefits which cover regular annual check-ups and a portion of hospitalization fees. For those who are not employed, there are individual health insurance plans where premiums start at PHP 700 a month.
Women continue to make waves in the workforce, and more opportunities are being presented for them to grow and take charge of their finances.
From starting a family to climbing up the career ladder, proper money management is a ‘must’ and affects various aspects of a woman’s life. Just like Jill and Sha, you can maximize opportunities that come your way so you can reach financial freedom.