Singaporean women tend to outlive their male counterparts by an average of at least five years¹. In addition, according to statistics from Singapore's Ministry of Manpower, women tend to leave the workforce earlier² which translates into women spending an average of 26 - 30 years in retirement, leaving behind the stark reality that women's wealth-building years are much shorter than men.

Women's longer life expectancy further perpetuates the lesser-known fact that eighty to ninety percent of women become the sole financial decision makers at some point in their lives; necessitating the even more urgent need for women to be able to manage their finances successfully.

Studies reveal that in general, women tend to be more conservative in their investment behaviors when compared to men. According to Ms. Tay, most women have a relatively greater percentage of their funds in fixed deposit.

“Whilst this behavior can be lauded for being prudent, it also means that they are not able to grow their funds much over the years,” cautioned Ms. Tay

With the realizations that Singaporean women tend to outlive men, work lesser years on average and tend to own conservative products which may not help grow their wealth significantly; it does not help matters when statistics reveal that older women also tend to have a higher chance of being hit by disability as compared to men.

All these facts help drive home the clear message that women, more so than men, need to be in greater control of their finances.

“In general terms, financial independence means enjoying the freedom from having to work for income, freedom from debts or simply the ability to provide for yourself without having to rely on others,” said Ms. Tay.

One way in which women can go about achieving this is by ensuring that they work as long as possible to enjoy a steady stream of salaried income. Having a good stream of earned income is one of the ways for women to build up a personal “honey pot” of wealth. Ms. Tay also encouraged building up alternative sources of income, through financial and property investments.

Despite their typical preference for conservative products like fixed deposits, Ms. Tay highlighted that women should not neglect financial investments as a means of growing their wealth.

A good diversified portfolio and a regular investment plan will help smoothen out the volatility in equity markets and help grow wealth in a more systematic way as compared to simply hoarding the bulk of one's funds in low-yielding fixed deposits.

Despite the virtues of investments, it is essential to be careful and to only invest in products that one understands fully and meet your investment objective. Invest in products that match the risk you are willing and able to take, given your investment time horizon.

As for property investments, Ms. Tay highlighted that it's a good avenue to enjoy a stream of rental income, provided one is not over-leveraged and has the necessary holding power. She also cautioned such investments tend to have a longer-term focus, huge initial capital outlay and is illiquid. Overly exposing your investment to just the property sector can result in the over-concentration of investment risk.

Ms. Tay said that when building up a “honey pot”, it is important to minimize leakages.

Two leakages to be mindful of are unnecessary personal expenses and high debt repayments. The former is especially pertinent to women given their penchant for shopping. It is critical for women to set a budget when they are shopping and to curb expenditure on non-essential items.

In fact, Ms. Tay encouraged “every woman to live below their means, so as to grow their savings”. In other words women should strive to be a tremendous saver and being frugal can help to build up their savings.

Debt repayment is another leakage to be mindful of. An area that needs special attention is credit card debt which is one of the most expensive ways to borrow money as interest rates charged on such debts can be as high as 24 per cent per annum!

A rule of thumb that women can adopt to avoid the debt trap is to ensure that their total monthly debt repayments do not exceed 35 percent of their take home income. Women should also always strive to maintain a debt to asset ratio of lower than 50 percent. Precaution should be taken before your debt servicing becomes unmanageable.

Accumulating savings and keeping a lid on your expenses are critical to wealth accumulation. But unless women put in place sufficient measures to protect their wealth, their painstaking efforts to grow their wealth may prove fruitless if they are afflicted by illnesses which can be drain on finances.

According to Ms. Tay, the number one killer for women is heart attack and stroke although most women think cancer is the foremost illness. As far as cancer is concerned, breast cancer is the most common type of cancer to afflict Singaporean women.

In lieu of all the possible illnesses, purchasing critical illness insurance plans becomes all the more important for every woman. The purpose of such plans is to cover the loss of income in the event that you are unable to work due to the occurrence of a critical illness. Purchase of these plans should not be left too late, as such plan are cheaper in terms of premium when one is young and still in good health.

“When you buy a critical illness plan, be sure that it covers the top few killer diseases. Ensure your critical illness plans have them”, advised Ms. Tay.

Last but not least, the often forgotten protection is against rising hospitalization and surgical costs. “You will need to buy a shield or a hospitalization and surgical plan as relying on your Medisave alone is not wise. Firstly, Medisave is not an insurance plan and secondly, your funds can be wiped out easily if you utilize it in this manner. You should instead consider using your Medisave funds to pay for such health insurance plans” recommends Ms. Tay.

No doubt many women lead busy lives these days, pursuing their careers or trying to strike a work-family balance. Hence, there may be a tendency to procrastinate when it comes to building wealth even after being aware of what needs to be done.

It is best to start early as getting a handle on building wealth can be a truly liberating experience as it accords women with financial freedom and the flexibility to pursue their passions in life.