When my father was age 90, he was going to the local pub for Sunday lunch. When I asked who he was going with, he replied, “20 widows and me” (with a cheeky grin). I said, “What, no men?” and he said, “No, they have all gone.”
Women live longer than men - nothing new in that, but it has some important ramifications for women and their money. In short, most women will eventually be on their own, and will need to know how to manage their financial affairs.
In addition, they will need to know how to make their money last longer.
Women need to be very clued up about their finances and money, perhaps even more so than men.
Women face unique challenges in life & often when they are alone
The likelihood of becoming a widow for 5 to 15 years is very high.
About 40% of marriages in NZ fail, but often women come out worse off after a divorce.
Women face income problems if the husband is the main bread winner and he becomes ill, has an accident, or dies.
If any one of these three situations arises, the woman has to organise some replacement income and /or take over managing the money.
If you never marry
If you never marry, you will not have the opportunity to enjoy a double income, nor have the advantage of “two heads are better than one.”
Conversely, you will not have the stresses and costs that marriage and children can bring, and there are plenty (maybe you are better off).
However, you will need to be clued up about money to make financial progress in life.
“Research suggests that all men and all women teams are not as effective as men and women working together”.
Start out by keeping tabs on all your financial affairs
You should always know what you own, what you owe, and how you will handle various risks that could wreck things. It need not be a complex task but you should put it on paper and update it often.
You could use a school exercise book or a computer, it does not matter which.
It doesn’t matter if you are 38 or 83, you should still do it.
List all your assets and approximate values, your mortgages and debts, and any other liabilities. Add up your assets, deduct your debts, and presto, you can see what you are worth. If you do it often, say at least every three months, you can see how you are progressing (or not).
If you are retired and consuming your savings, you can track how fast or slow they are diminishing - it’s OK to use up your savings, just not too fast.
You should be in Kiwisaver too, working for wages or not. Are you putting in at least $20 per week?
Record all your insurances and who they are with
Life - his, hers, partnership insurance, key main insurance - and very important – who owns them?
Any funeral policies.
Income replacement - cover if you become ill or have an accident and your income stops.
Major Trauma or Critical Care – a lump sum if you contract a major health condition.
House, contents, cars, caravans, motor homes, race horses, and boats etc.
Business insurances if any.
Part two of five will be in the next issue. Meanwhile please feel free to email the author if you have any questions.
Supplied by Alan Clarke, financial & retirement adviser, & author. His second book is virtually complete, & he also writes regular articles for the media & on line – see www.acfs.co.nz
Alan is an independent authorised financial adviser (AFA) FSP26532 & his disclosure statement is available on request and free of charge.
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