Planning your financial life as woman, a wife and a mother

Financial planning for women differs materially from planning for men. Women face unique financial risks, but the message for women and men who care about them, is that these risks can be mitigated.

Women face unique financial risks

The financial risks facing women include:

• Women live longer than men

Stats SA recently estimated that as of 2026 women in South Africa will live 5.5 years longer than men (71 years for women vs 65.5 year for men). ¹

• Women earn less than men

According to UN Women Africa – Women in South Africa earn 20.1 percent less per hour than men and 32.5 percent less per month.² This difference can be explained by women not working as many hours as men due to their responsibility for unpaid care of family and children.

• Women’s employment is interrupted

Women have a higher unemployment rate in South Africa than men (35.9 percent for women vs 31 percent for men).³ Taking career breaks to have children and to care for family are also contributors.

What these financial risks mean for women

Putting these three important differences together: On average, women earn less, work fewer hours out of necessity and live longer than men.

When it comes to providing for retirement, this means women need to contribute more to their retirement savings than men to produce a similar level of post-retirement earnings over their working lives.

This necessitates different financial planning and personal financial management considerations for women.

How financial risks affect married women

Let us consider the implications of this in the following scenario: You are a married woman who intends to have children.

The terms of your employment contract will define the length of your maternity leave and whether you will be able to earn your full salary during this time.

The Basic Conditions of Employment Act entitles parents to a minimum of four months maternity leave. These four months will either be paid leave from the employer (unfortunately still rare) or via a claim from the Unemployment Insurance Fund (UIF).

Depending on your level of earnings, these payouts may not fully cover your monthly salary, especially considering the extra costs inherent in caring for a newborn child.

Women’s savings and insurance are typically cut

If, as is typically the case, you, as a couple have insufficient savings to cover the time the woman takes off, it is tempting to cut back on savings, investments and long-term insurance. This can make it even more difficult for a woman to ensure she retires comfortably.

Cutting back or even cancelling a woman’s life, disability and dread disease insurance also comes at great risk. If there are complications with the pregnancy, the birth or post birth, this could lead to the death of the mother, a prolonged period of illness or even disablement. This is potentially financially ruinous.

If you cancel insurance and take it out again later, the insurer will underwrite your policy anew. This increases the chance that exclusions and premium loadings are applied to your policy for health conditions that you may have developed since the cover was first taken out.

Should you, as a woman, take a step back with your savings, investments and insurance, it leaves you financially vulnerable if your marriage fails and you get divorced.

How to mitigate women’s financial risks

Here are a few ideas on how to mitigate these risks:

If you are able to, consider seeking employment with an employer with a more progressive and flexible working arrangement for women who become mothers, even if it means slightly lower earnings initially. A position that comes with the option to work part-time (six hours a day instead of eight for example) could prove very valuable.

Plan to have enough in emergency savings to cover the earnings gap for your maternity leave, particularly if you want to take leave longer than the statutory four months.

Continue to contribute to your investments and savings and do not draw on them to cover expenses you could anticipate and for which you could plan.

Try to keep your long-term insurance in place.

Consider budgeting for the need for additional domestic support and childcare, particularly if you plan to have multiple children relatively close together in age and if the mother plans to return to work.

Set joint goals but have your own money

A husband and wife should each have their own money. A couple’s shared goals should be provided for, as well their individual goals. It is important that each partner has their own money each month to spend as they please without having to ask for permission from their spouse.

You will often see most of the wealth in the name of the primary earner, historically often the husband, particularly if the wife takes a career break to raise their children and stops her investment contributions while she is not generating an income.

A husband and a wife are a team, and their efforts together generate financial success, even if one is earning more than the other.  While you are together wealth should be accumulated equally between husband and wife.

Plan financially for family time

I learned important lessons in my own life when my wife fell pregnant with our daughter. Her employer at the time gave her the standard four months maternity leave with no pay. This meant that she had to claim from the UIF. This payout was less than what she was earning.

My wife also took an extra month of maternity leave that was not covered by the UIF.

We had to plan carefully and ensure we had sufficient savings to provide for this time. We hired a domestic worker to assist us from before the baby was born and then increased the shifts after the baby was born. We also hired a nanny after my wife returned to work.

After 18 months my wife received an offer of new employment that included the option of a six-hour workday instead of an eight-hour workday. This gave my wife more time to spend with my daughter and more time to rest and recover.

We never had to cancel or reduce any of her long-term insurance policies. We continued to contribute to her investments and savings at the required levels throughout without having to draw on them. It was not all plain sailing, but through careful planning and working together, we managed to navigate it.

My parents taught me that financial independence for each spouse is vital. I have therefore done everything I could to ensure that my wife is independently wealthy of me and that regardless of what happens to me or our marriage, her long-term financial future is more than secure.

Sources:

1. (https://www.statssa.gov.za/?page_id=1856&PPN=P0302&SCH=74592)
2. (https://africa.unwomen.org/sites/default/files/2024-03/un_women_south_africa_gender_pay_gap_report.pdf)
3. Gender Gaps Persist in South Africa’s Labour Market | Statistics South Africa