Every 8 March, the world over, women celebrate the International Women’s Day (IWD), to promote the advancement of women’s rights. The theme for the 2020 IWD, each for equal emphasizes collective effort towards the creation of a gender equal world. Gender equality can be achieved in many ways, financial empowerment being a key actor.
Over the years, in the corporate world, women have shattered barriers and defied the odds to assume roles that were traditionally reserved for men. The discussion on financial empowerment for women needs to continue, so that more women can acquire skills to improve their socio-economic status and grow their influence in various spheres.
Women accountants in Uganda shared financial empowerment tips, at the 2020 Women in Accountancy Forum, on 5 March. The Forum was facilitated by accomplished women, CPA Busingye Kelemensio (Manager – Compliance Management – Domestic Taxes at the Uganda Revenue Authority) and CPA Christine Mugume (renowned tax consultant and Managing Partner at CMK & CO tax Consultants, bestselling author of Managing Taxation in Uganda, and proprietor of a cleaning company, Extreme Hygiene).
CPA Kelemensio defined financial empowerment as, “the feeling you get when you know you are in control of your money versus your money being in control of you.”
She emphasized vision, planning and action as fundamentals for financial empowerment. “Know what you want out of life, make a plan to reach that point and act out the plan,” she asserted. She cautioned women against praying while merely paying lip service to their ambitions. “Prayer is important, however, action must lead to tangible results,” CPA Kelemensio said.
CPA Kelemensio advised women to consider the following important guidelines for attaining financial independence:
- Financial planning: Budget, keep track of expenses, reward self, and maximise retirement savings. Use the balanced money formula: spend 50% on needs, 20% on facilities/wants, 10% on aesthetics/recreation and save 20% on every earnings.
- Managing credit by borrowing with a plan and using loans for investment rather than expenditure.
- Multiplying wealth by seeking out investment options such as; acquiring property, fixed income investment, investing in stocks, bonds, foreign investment, share market, life insurance, savings, real estate, and mutual funds, among other options.
- Seeking out insurance against emergencies, to avoid wiping out wealth and savings due to unexpected events.
- Lifestyle change: Avoid impulse purchasing, have a heart of contentment, avoid the keeping up with the Joneses syndrome, have a vision and a long term plan.
She cautioned women against: financial idealism (impractical ideas), financial indiscipline, the fear of failure, the get-rich-quick attitude and non-compliance with tax obligations.
CPA Christine Mugume emphasized 3 key factors for financial empowerment: financial literacy, financial capability and asset building.
“Understanding financial empowerment starts with knowledge,” CPA Mugume said.
Financial literacy involves having the knowledge to be able to make prudent decisions regarding savings and managing debt while financial capability looks at knowledge, attitude and behaviour. This involves self-motivation and having a positive attitude. It involves having a vision and setting goals. It looks at the mind-set. “The mind controls the decisions you make. It controls beliefs and action,” CPA Mugume noted. The behavioural involves application and consistency.
CPA Mugume advised women to consider the following behavioural attributes of financially empowered women:
- Consider both short term and long term investments: Long term investments are good but consider also business ventures that will increase your cash flows in the short term.
- Avoid unnecessary fees, e.g penalties arising from non-compliance.
- Protect your finances by being frugal: Sharpen your negotiation skills. “Why would you go to expensive salon X when you can get the same service for half the price at another salon,” CPA Mugume wondered. “Be frugal and do not be ashamed to negotiate and ask for discounts, she added.
- Leverage on free opportunities such as business grants and interest free credit. “Be humble and seek for those free opportunities, no matter what it takes,” CPA Mugume advised. “It is more prudent to take an interest free salary loan from the employer, than a high interest loan from a financial institution, even if the latter is easier to obtain,” she added.
- Monitor your credit score and history.
- Consult: Before you venture into a specific business, consult peers in the same trade, so that you can make informed decisions.
- Be realistic: Stick within your means.
- Saving: Join cooperatives, to boost your savings and increase your access to business financing.
CPA Mugume also advised women to build their assets. She emphasized that the individual is the first asset. “You are asset number one,” CPA Mugume said. “Your investment in education makes you a valuable asset,” she added. She encouraged women to build financial assets through savings and through leveraging on the existing skills such as education.