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Women and Money – Pandemic results in “survival mode” for some

The important role women play in money matters should not be restricted to one month in a year. Two recent surveys underline just how significant this role is.

A snapshot survey of how women manage their money, conducted by personal finance website JustMoney during Women’s Month (August 2020), has revealed:

79% of women are in charge of their money;
56% of women drive money management decisions;
86% of women are confident about money management decisions;
85% think it is very important for women to understand money management;
64% look to their parents as role models when it comes to their finances; and
51% of the respondents believe that women tend to have more debt than men.

Asked about how they are experiencing the lockdown, 49% of readers said they are coping well, 28% said they are barely coping, and 23% said they are really struggling. “The fact that half of the respondents are finding it hard to cope with lockdown is not surprising, but it does reinforce the importance of educating yourself about your finances so that you can better manage your situation and possibly take some tough decisions,” says JustMoney Commercial Manager Sarah Nicholson.

Although in charge of their money management, the impact of the pandemic and increased focus on daily needs, rather than long-term needs, have been challenging. This is echoed by a survey of South African women conducted by Sanlam that found that 72% consider themselves to be living in “survival mode”.

The Sanlam study found that:

Six in 10 women’s income has reduced due to the pandemic
Four in 10 women have already adopted money conscious behaviours in response to the reduction in their income
Five in 10 women were spending significantly more on food and other expenses than before lockdown

These findings are also confirmed by a recent United Nations Development Programme (UNDP) socio-economic study, which talks to household financial vulnerability and found that 34% of middle class South African households were likely to drop below the poverty line as a result of COVID-19.

Kenosi Magosha, Head: Client Solutions Savings at Sanlam says individuals rebounding from the pandemic, particularly women’s personal economies, is a key part of helping the economy and individuals get back on their feet as research has shown. “One of the important tools in coming out of survival mode is access to financial advice and savings. Our study showed that only two in every 10 women have a financial adviser. This means women are not tapping into financial expertise when it comes to their financial planning in the short-, medium- and long-term which impacts on financial health and resilience.”

This is somewhat in line with the JustMoney survey that indicated that 64% of readers turn to their parents as role models when it comes to their finances. Close to 21% chose their partners, and some 16% look to their friends for guidance. When asked if they’ve ever sought advice from a financial adviser, nearly half said yes.

The Sanlam results also showed that women were 3 times more likely to consider themselves to be in survival mode when they didn’t have access to financial advice. “This is compared with only 1.3 times for women who do have access to financial advice. We believe this shows that advice can help women rebound and close the gap on financial resilience,” Magosha notes.

“Working with an adviser can also help ensure that protection is in place in the form of insurance to ensure that gains made when rebounding are not lost should unexpected events happen.” A financial adviser will also help with managing debt carefully by working out a debt repayment plan and critically evaluating whether additional debt being considered aligns with the rebound plan.

Although lockdown may have restricted some of our interactions with our clients, we should focus on the world of opportunities it has opened for us as advisers.

Click here to download the detailed results of the JustMoney survey.

Click here to download the Sanlam survey results which include tips for women on how to rebound out of survival mode.

Please download and share these articles with your clients.

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