One thing we can all agree on is that women are excellent savers. We know how to save for essential items in our household, such as new clothing for ourselves. Women are also too busy taking care of their families and making sure their kids get cared for. This leads to neglecting what’s essential – finances.
Unfortunately, saving is not enough and can be risky. Women should stop saving and invest their money to work for them and not against them. By relying only on your savings, you will not be financially secure in the future. Cash will not grow if it’s sitting in your pocket.
So, why is it important for women to take charge of their finances?
1. Women Live Longer
Women have longer lifespans than men, and we can’t rely on our spouses to take care of us once they are no longer with us. On average, Singaporean women live five to six years longer than men. Because of this, women need to invest in their futures and plan for the long term.
Relying on small savings won’t be enough for any person living alone. When you stop saving and instead invest for your retirement days, you will not have any problems paying your bills or even taking a vacation.
2. High Divorce Rates
High divorce rates are an excellent reason why women should invest. Divorce rates have been increasing over the years, and unfortunately, not every marriage will have a happy ending.
Women need to be more aware of what’s happening with their finances and invest in their futures. Don’t let your emotional wellbeing sabotage your finances, and put yourself first every day!
As women, we need to stop entirely relying on our spouses financially and control our finances. There’s nothing wrong with being involved with money as a family, as you have as much importance in day-to-day living as anyone else.
Having a clear guide regarding how much you have now and how much you have for the future will contribute to any unexpected circumstances.
3. Gender Pay Gap
Men earn more than women significantly worldwide. Women also tend to take on temporary jobs as we are more the caregivers in our households. Due to the lower incomes and lack of preparation, women will more than likely be saving less towards their retirement. This can have a drastic impact on many women in their golden years.
Women need to be investing their hard-earned money to earn compound interest. Compound interest is when your investment’s interest earns interest, too.
Set up a budget every month to firstly pay your bills and save. It’s recommended to invest 15-20% of your monthly income towards an investment account, but it’s not often easy to do with lower salaries. Start investing with what you can afford, and you’ll benefit in the long run.
4. Make Retirement Planning Number One!
Nearly half of Singapore’s working-class women aren’t aware of how much they’re putting away towards their retirement, and these women will indeed feel the financial struggles when they can no longer work.
By contributing towards a retirement investment as early as possible, women can rest assured that their futures are taken care of. You need to be taking advantage of compound interest over the long-term! Compound interest will take care of growth on your investments.
Making retirement planning a priority will contribute to your emotional wellbeing and set you up for success. Consider speaking to an informed financial advisor who can help you make the right decisions on where to invest your hard-earned cash. Having someone guide you in why it’s important for women to take charge of their finances is imperative.
5. Where to Invest
Once you’ve set up goals to achieve with your money, you can get motivated by seeing your money grow. There may be times when the market doesn’t do well, but that shouldn’t deter you. What’s important is that you’ve started investing your money and making your money work for you.
Investments are long-term, so don’t expect significant changes too quickly. Educate yourself by reading about different types of investments, and you will see changes not only in your confidence and emotional wellbeing but also in your knowledge.
Investments include the following:
- Stocks – Owning a fraction of a company. As a stock owner, you will get entitled to a portion of the company’s profits and assets equal to the amount of stock you own. A share is a unit of a stock.
- Bonds – An investor will lend money to a company for a certain period. Regular interest payments will get paid to the investor in return. Once the bond matures, the company will return the money to the investor.
- Property investments – Purchasing of different properties and then renting them out to earn rental income.
There are many ways to invest your money. Do some research and find the best option for you!
Now that you know why it’s important for women to take charge of their finances, you can make smart choices with your money. Be disciplined when putting money away towards investments and stick to a plan by contributing regularly. Add your goals to your budget so you can review them monthly.
Diversify your portfolio by investing in stocks, equities, bonds, etc. It will be easier to accumulate wealth over the long run. If you’re unsure how to invest, get in touch with a financial advisor who will give you the best investment advice.
And remember, as a strong, independent woman, you can achieve any goal you set in your mind! Don’t hold on to your cash, and instead, take a leap of faith and invest in your future.
Connect With Michelle
About Michelle Lee
Michelle Lee is the founder of Legacy Edge. Michelle’s mission is to empower women to start investing safely and build passive incomes. She is a certified Associate Estate Planner as well as an Associate Financial Planner with certification in Securities. She was featured as one of The Straits Times Generation Grit 2020 nominees for inspiring others with her resilience and heart for the community, Michelle’s mission is to empower women to achieve financial wellness. Her accolades include the Court of the Table (COT) which represents the top 3% of financial advisors worldwide. Armed with more than 10 years of expertise she can give you more clarity and confidence in your investment journey. She advocates investing with an end in mind, together with proper estate planning, she will ensure that your money rests in good hands eventually.
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