A guest blog by Ruth Downs BA (Hons) DipPFS, Financial Adviser at The Platt Partnership
Preparing our finances to help us withstand life’s events is important for all of us and particularly for women. Career changes, illness, career breaks, starting a family, general life events – all of these and more can derail our finances. Resilience is key and prepping your finances to accommodate a change of situation will give you peace of mind and ensure you’re well placed to meet whatever opportunities or challenges lie ahead.
Did you know that women couldn’t even have a bank account their own name until 1975? Is it any wonder that many of us aren’t yet fully clued up on managing our finances? And despite improvements, there’s still a gender pay gap in many industries, including veterinary medicine. Women can earn less than their male counterparts for the same work – and this can affect your long-term financial stability.
But it’s time to take control – so, let’s look at some simple steps you can take to manage your finances effectively and, as an example, let’s take one of the main life events that impacts many of us – the exciting decision to start a family.
Starting to save and creating an emergency fund: I provide a free financial questionnaire for anyone looking to work out how much they spend. This information is critical and will help you work out how you can budget more effectively and how much you can start saving regularly. Ideally, I’d encourage you to start building up an emergency fund too. This will cover unexpected events or expenses that may arise during pregnancy or once your baby is born. I recommend that if you do plan to have a baby, you should start saving more than the standard three times your expenses. Why three times I hear you ask? Let’s say you get made redundant from work unexpectedly; saving three times your expenditure can ensure you have enough to pay your bills while you search and interview for a new job. Many of my clients also like to have a three-month deferral period (wait period) on their insurance as this makes it cheaper. Your emergency fund can turn out to be a substantial amount but, if you work with a financial adviser, there are many clever ways you can help your fund to grow. My savings top tip – banks don’t always reward loyalty so shop around for the best interest rates being offered every year.
Government benefits and tax credits: Knowledge is power so make sure you research government benefits and tax credits available for families with children, such as child tax credits, childcare subsidies and maternity benefits to make sure you claim any you’re entitled to. Take child tax credits as an example. They can give you additional financial assistance to cover expenses such as childcare, education, clothing, food, and medical care. They can also help reduce your family’s tax liability, either by reducing the amount of tax you owe or by increasing the size of a potential tax refund.
Maternity leave and income: Consider how much time you plan to take off work after the birth of your baby and whether your employer offers paid maternity leave. If not, you may need to rely on savings or other sources of income during this time. If you’re self-employed, do you plan to work part-time as and when to top up your income? If so, and if you’ve completed the financial questionnaire, you’ll be able to work out how many days you’ll need to work to cover essential bills such as gas and electricity, council tax etc. This will help you plan so you don’t end up eating into your savings.
Budgeting for baby expenses: Babies (of course!) come with expenses, including nappies, formula or breastfeeding supplies, clothing, childcare, and medical costs. Estimating these costs and creating a fund to cover them will help you to prepare. At her baby shower, one my clients asked her parents to gift her a year’s supply of nappies, which they did. This proved a huge help financially.
Childcare costs: If you plan to return to work after having your baby, childcare expenses can be significant. Research the cost of childcare options in your area and factor them into your budget. And, while it may seem early, starting to save for your child’s education early can help alleviate the financial burden of future educational expenses, such as college or university.
Insurance and estate planning: Ask a professional to review your insurance coverage – this could include life insurance, income protection and private medical insurance. You may need to increase your cover to provide financial protection for your family and check whether it includes cover for pregnancy. If you don’t have insurance, arranging cover whilst you’re healthy will keep your premiums (the amount you pay per month) low. Some financial advisors offer complimentary protection health checks. Even if you don’t take the cover, at least get a quote so you can budget for it when you’re ready. I also urge you to make a will. This is even more important once you have a child as you will need to name your preferred guardian should something happen to you.
Fertility treatment: I’ve started helping some of my younger clients prepare a fund for fertility treatment should it be needed. You may not have even met your partner yet but want to freeze your eggs in preparation for what your future may hold. Cost for this can vary and if you are under a certain age and weight, you can get a round of fertility treatment free on the NHS. If not, you should expect costs from £5,000-£10,000 for just one round of treatment.
I know this list sounds a little overwhelming but the points I’ve suggested are simply considerations and they are also things you can plan for. We’ve all seen that Friends episode called PIVOT – you may save for fertility treatment but have no problem getting pregnant, in which case that pot will be a welcome boost to your baby fund.
Of course, financial planning is not only necessary when you’re thinking about starting a family. Long-term planning, such as saving for major purchases such as a home and even for retirement, are also important. Whilst we get the last laugh, as women typically live longer than men, this means that we need to plan for a longer retirement period. There’s one simple thing you can do right now and it will cost you nothing. If you have several different pension pots from different jobs, ask your financial advisor to look at combining them so that they will work harder for you.
Going through the menopause can also have significant financial implications. Firstly, menopause-related health issues, such as hot flashes, insomnia, and mood swings, may require medical treatment which could impact your budget. Secondly, the menopause often coincides with our peak earning years but symptoms such as fatigue and cognitive changes may affect our work performance and advancement opportunities. While employers are becoming more supportive of women going through the menopause, it can still potentially lead to reduced income or career interruption. By being aware of this, you can also plan for it.
The key point I want to leave you with is that by considering these financial factors, you can better prepare yourselves and your families for the financial responsibilities that lie ahead. Anything is possible if you put a plan in place. Do something your future self will thank you for. Get yourself a BFF (Best Financial Friend) and start sooner rather than later.
Don’t miss financial advisor Ruth Downs BA (Hons) DipPFS speaking on ‘Pensions, savings, taxes…managing your personal finances’ during VMG Congress which takes place on 25-26 April at the Crowne Plaza, Stratford-Upon-Avon.
VMG Congress is an exhilarating 2-day getaway during which you can join the leading minds from the veterinary sector and beyond for a feast of learning, sharing and personal growth. This is your chance to build on what you know—master team leadership, enhance practice performance, prioritise self-care. You’ll leave feeling empowered to reach new heights in your personal and professional life. Learn more about VMG Congress at www.vmgevents.co.uk.
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