WOMEN ARE WORSE AT SAVING MONEY

Women also seem to be better to sticking to a budget than their male counterparts as they're 8% more likely to do so than men.

According to this 2012 survey from Visa, 10% of women also have a secret bank account that their partners don't know about and the average amount of money in these account is nearly R18 000. So it seems that while women are worse at saving for their long term future plans, they're still using their money to save for the immediate future.

But how can women be better at saving for things like retirement plans?

We spoke to Sohini Castille, Head of Employee Benefits Consulting at 10X Investments, to get a few tips on how women can improve their long term savings game.

Why are women less likely to save?

For various reasons, many women are on the back foot financially and that affects savings behaviour. There can be socio-economic reasons for this, such as being paid less than their male counterparts and taking a career break when they start a family. However, not saving or taking responsibility for their own retirement planning is often a bad habit that can be changed.

What are the key differences between men and women when it comes to saving?

According to our research, men tend to be more independent when making financial decisions, conducting their own research and using online sources.

Female respondents said they were not confident regarding general finances and were more likely to ask for advice and help when it comes to investing and saving. They feel more comfortable sharing experiences with other people (friends and family) and making decisions based on these experiences.

How can women become more informed and better at saving?

Becoming better informed is critical. Women need to be comfortable with taking risks when making financial decisions. As society changes, women are increasingly viewed as breadwinners – including buying groceries, looking after the kids and working out monthly budgets. It is important that they also consider long term savings goals and resist taking only a short term view. A good example of this is retirement planning.

"A critical thing for everyone to do is understand the fees they are paying on their particular savings or investment."

The industry might lead one to believe that retirement planning is a complex process that involves tricks of timing, magical stock picking and all sorts of other wizardry. In fact, following a simple fool-proof formula is the best way to plan for a happy and secure retirement.

The 10X Investments formula is simple: put away 15% of your salary over a 40-year period in a high-equity fund with total fees of less than 1%, and let time do the work.

When and where should you start if you’re thinking about investing your money?
It’s never too early or too late to try to improve your plans. But the more time you are in the market the better because of the effects of compound interest, which essentially means you earn interest on interest.

A critical thing for everyone to do is understand the fees they are paying on their particular savings or investment.

Take the retirement industry for example, many companies in the industry tend to blur fee explanations and many charge up to 3% on investment fees while some charge just 1%.

It might not sound like a big difference but the effect of this over a savings lifetime adds up to a difference of up to 40% extra in a pension pot come retirement day. Or 40% less, if you have been paying 3%.

Fees eat away at your savings so make sure you understand what you are paying.

Saving should be introduced at a very young age, so that children get an understanding of the importance and discipline involved – but that they also start to see the potential rewards (i.e. they eventually get the bicycle they have been saving a portion of pocket money for).