Urgent improvement to economic access and financial security for women is needed, states Pat Magadla, Senior Business Development Manager at Old Mutual Investment Group.
Five percent of women lost their jobs as a result of the Covid-19 pandemic in 2020, versus 3.9 percent of men, according to a recent report by the International Labour Organization (ILO). In absolute numbers, this loss translates to more than 64 million jobs lost by women globally.
“As we mark Women’s Month in South Africa, it’s important that we acknowledge the unequal structural conditions and biases that long predate the pandemic by which many women have been disproportionately affected,” says Pat Magadla, Senior Business Development Manager of Old Mutual Investment Group.
“The reality is that the economic and social impact of Covid-19 could push many women into poverty or cause them to lose their financial independence – a scenario that should be of grave concern to all of us”. Gender Equality in the Wake of Covid-19, a recent study published by the United Nations, found that women typically earn less than men and hold jobs that are less secure.
Worldwide, 740 million women work in the informal economy, with employed women being 19% more at risk than their counterparts. It’s further estimated that gender poverty gaps will worsen by 2030 if governments don’t focus their attention on gender-responsive policies.
“As a society, we have made some progress in redressing gender inequality. However, it is imperative that governments implement policies aimed at greater access to the job market, job security, and equitable employment benefits for women,” says Magadla.
This is particularly urgent in South Africa, where, according to the 2021 Old Mutual Savings and Investment Monitor COVID-19 Special Report, 44% of women are single mothers. When these women are unemployed, their households have zero income, and entire families are at risk of falling into a cycle of poverty that’s extremely difficult to escape, Magadla explains.
How financial planning can help get women back on track
While we must acknowledge the deep structural issues that make women more vulnerable to economic uncertainty, skilful financial planning is a vital part of the solution, states Magadla.
“When women take careful stock of their money and plot a constructive way forward – focusing on what is within their control – it’s an enormously empowering experience that improves not only their financial future but also how they feel about themselves.” What’s more, being armed with a recovery plan will put women in the best possible position to benefit from the economic recovery we hope to see when the third wave of Covid-19 subsides, and climbing vaccination numbers reduce the need for strict lockdown measures.
“Understanding your current reality and moving away from focusing on where you were before the pandemic is imperative at this time,” says Magadla. With a disproportionate number of women working in the services industry such as tourism, hospitality, and beauty-care, that were directly impacted by lockdowns, this translated to reduced working hours, job losses and in some cases, business closures. This meant those fortunate enough to have had savings have likely seen them depleted, while many have had to rely on debt to survive. These may feel like insurmountable setbacks, Magadla admits, but small, consistent steps in the right direction ultimately will help women to recover.
Magadla suggests the following practical steps to financial recovery:
- Get a clear picture of the debt that you have incurred, as well as the interest rates on this debt.
- Talk to your financial institution about a realistic repayment plan on your debt.
- Draw up a budget based on your new circumstances. Involve your family in creating this plan, as their buy-in will help them understand any lifestyle changes that may have to take place.
- Set goals, and keep track of your progress in achieving them. You can use an online budgeting app like 22seven to monitor your progress.
- Think about the unique skills that you might have, and how you might be able to use them to generate additional income.
- Talking to an accredited financial planner can also help you to better understand your financial situation.
Recovery isn’t exactly linear, warns Magadla, so don’t be too hard on yourself if you make mistakes along the way. “Acknowledge that it is difficult, take stock of where you fell short and then try again. And remember to celebrate all of your successes, even those that may seem small, to keep yourself motivated,” Magadla concludes.