When it comes to spending habits, women are from Mars and men are from Venus! Thai women are notorious when it comes to shopping. Generally, women tend to be more compulsive shoppers than men. This may be due to cultural upbringing and social expectations where women are expected to look good in order to attract eligible suitors and when it comes down to childcare, most women will spend more on their kids than on their husbands! Thai men, on the other hand, don't need 20 pairs of shoes or have to keep up with latest fashion. But in general, they tend to spend less on themselves and more on tangible goods that keep their value such as home or the big-ticket items.
Men and women are different not only in their spending habits, but also fiscally, since women tend to earn less and live longer. Several books have been written about women and money, which at one time, I thought was just a gimmick to target women readers. After all, stocks like Siam Cement or Bangkok Bank or SET Index Fund do not know or care about the sex of the investor. Similarly, it is critical for both men and women to take advantage of the tax deductions on their provident funds, Retirement Mutual Funds (RMFs) and life insurance policies.
However, upon closer analysis, I must concede there is a case to be made that women's financial needs are a bit different from those of men. Here are some sobering statistics from the Women's Institute for a Secure Retirement and the National Centre for Women's Retirement Research in the US:
The average women in the US spends 15% of her career out of the workforce caring for children and elderly parents. For every year out of the workforce, a woman has to work five years to recover the lost income, pension coverage and career promotion.
Women retirees receive about half the average pension benefits that men receive. This is partly because they earn less money and change jobs more often than men.
Women, on average, live longer than men and, at some point in their lives, about 90% of women will be solely responsible for their finances.
Too many women end up widowed or divorced and suddenly find themselves on shaky financial ground. A good number of Thai women ignore financial matters, either letting the husbands tend to them or simply putting off dealing with them. Of course, many men are also guilty of the same thing. Fortunately, all is not lost, even for middle-aged women. Just remember that it's never too late to begin to take care of your financial future. Here are some useful tips to get you started. Although, some of the tips may be overwhelming but perhaps you can choose one or two to work on first.
1. Consider consulting a professional. There is no shame in asking for help and no need to go it alone. Right now, there is a growing number of Certified Financial Planners (CFP) in Thailand. Just contact the Thai Financial Planners Association (www.tfpa.or.th), they should be able to get you in touch with one.
2. You don't need a lot of money to begin investing. Several mutual funds will take as little as 1,000 baht to start off with. Moreover, there are regular savings plan that will automatically deduct from your bank account.
3. Be properly insured. Life insurance is a vital part of wealth management, especially if you have outstanding debts or young children. Just because you are dead, it doesn't mean that your banker will let you off the hook. In addition, health insurance is a must if you are self-employed.
4. Take advantage of the tax deduction on your provident funds at work or Retirement Mutual Funds (RMF) if you are self-employed and Long-Term Equity Fund (LTF). It's free money up to 1 million baht per year. So don't miss the opportunity.
5. Tend to your own credit rating. Some married women have few financial accounts in their name — that can hurt should you suddenly become single either through divorce or widowed. You should have separate bank accounts and credit cards.
6. Have an emergency fund, with three to six months' worth of living expenses, in short-term savings account. Note that for some people, even six months' worth is not enough. If you generally take a long time to find new employment or if you have major expenses such as car or housing loans, it never hurts to set more aside for a rainy day.
The tips are just common sense and not that difficult to adhere to. And that's my point, investing is not meant to be difficult. All it takes is a little discipline and the willpower to follow through with what you have started.
Teera Phutrakul CFP® is a Certified Financial Planner professional and he is the current chairman of the Thai Financial Planners Association.