The differences in life expectancy and even pay highlight the need for women to approach financial planning differently. Here are 5 tips for women on how to take control of their financial future.

Did you know that on average, women outlive men approximately by five years¹? While longevity offers certain benefits, it also means that women need to plan for a longer retirement. But with the gender pay gap still looming large—full-time female employees aged 25 to 54 in Singapore earned 14.3% less than their male counterparts in 2023²—the road to financial security can be bumpier.

In this article, we’ll explore five tips that will empower you to tackle the unique challenges you may encounter as a woman when it comes to financial planning.

1. Build financial fitness

The HSBC Quality of Life Report explores the relationship between physical and mental wellness and financial fitness. The report highlights that respondents who score high on financial fitness are 1.3 times more satisfied with their quality of life³. This shows that building financial fitness is one of the cornerstones of achieving a better quality of life.

One way to effectively boost your financial fitness is by investing in financial education, which will empower you with knowledge and confidence to make informed decisions and pave the way for a more secure and fulfilling future.

Gain a firm understanding of fundamental concepts like budgeting, saving, investing, and debt management. Once you have established a solid foundation, set clear financial goals and review them regularly. Begin by building an emergency fund of 3 to 6 months of expenses. Prioritise building long-term wealth and passive income through savings and investments, as these practices can potentially contribute to sustainable growth and financial security. Lastly, ensure you have adequate insurance coverage to safeguard your financial well-being. By taking these foundational steps, you'll be on your way to building strong financial fitness.

2. Have adequate insurance coverage

When it comes to securing your financial future, prioritising your health and life insurance is essential. Unforeseen mishaps can wipe out your savings or leave your dependants without a financial safety net. Based on the hierarchy of protection needs, start with getting adequate life and health insurance. Additionally, consider critical illness (CI) coverage and explore preventive measures for women-specific conditions. The Life Insurance Association Singapore (LIA) recommends that an average working adult in Singapore should have CI coverage amounting to 3.9 times their annual income⁴.

Even if you are not the primary breadwinner in the family, having adequate insurance coverage gives you healthcare options without draining family savings, ensuring the financial stability of your loved ones during challenging times.

3. Prepare for career breaks and parenthood

Women often take on the role of caregiver, looking after children and elderly parents, though there is an increasing number of men who are also taking on this role. Being the primary caregiver sometimes mean taking career breaks, which can impact their own financial stability.

If you’re planning to start a family and may consider pausing your career, it’s important to start saving early and consistently. Additionally, explore flexible work arrangements or freelance opportunities for a continued stream of income. Investing in yourself through continuous learning and skill development is also crucial for staying relevant in the job market. Use your SkillsFuture Credit or explore online courses that you can take from the convenience of your home at times that suit your schedule.

Lastly, maintaining open communication with your spouse or partner is key to shared responsibility and support in financial planning. By proactively planning ahead, women can empower themselves to thrive both personally and financially.

4. Be involved in your family’s financial planning

Don’t leave the responsibility of financial planning for your family solely on your partner. Life can have twists and turns with unexpected events that can disrupt your financial stability. By taking an active role in the financial decisions for your family, you are less likely to find yourself caught unaware if you need to suddenly take responsibility for financial planning. Besides protecting your future, you are also ensuring there’s a sturdy safety net in place for your family’s journey ahead.

5. Planning for your retirement

When it comes to retirement planning for women, there's an important consideration to keep in mind – women statistically have a longer life expectancy than men¹. While we celebrate this longevity, it's crucial to financially prepare for an extended retirement.

The earlier you start planning for retirement, the better positioned you’ll be to achieve your goals. Begin by assessing your financial situation, setting realistic goals, and exploring investment options that can provide a steady income while maximising your retirement account contributions. Remember to also factor in healthcare costs and potential long-term care needs. Speak to an HSBC Life Financial Planner today if you're unsure where to begin.

What's next?

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1. Life expectancy, males vs. females, 2022 | Our World in Data
2. Comprehensive Labour Force Survey | Ministry of Manpower (MOM)
3. The HSBC Quality of Life Report 2024
4. 2022 Protection Gap Study | Life Insurance Association Singapore
   Please visit www.lia.org.sg/media/3974/lia-pgs-2022-report_final_8-sep-2023.pdf for more details. The material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.