Wednesday, May 13, 2009

STI: Women making sense of money

May 10, 2009

Women making sense of money

Housewives are often the hardest hit when their husbands lose their jobs or get struck down by a serious illness.


These women usually rely on the men's earnings as the sole source of income for the family.

To make matters worse, they are often clueless about managing finances.


Recognising the need to impart basic money management skills, the Citi-Tsao Foundation financial education programme was launched last year. The five-month course is aimed at helping women above 40 to manage monthly household incomes ranging from $1,500 to $3,500. It aims to help these women save, create their own financial plan and build a small surplus.


On this Mother's Day, Senior Correspondent Lorna Tan talks to two graduates of this programme, as well as a mother who is a finance professional and another who has published a book on the subject.


Mum aims to leave her 2 kids with a home each

Ms Norma Sit, 47

Author and businesswoman


In her new book, Gorgeous, Sexy and Rich, Ms Sit calls on women to take charge of their financial planning. Her current investment portfolio comprises cash deposits, stocks and properties.


Last year, she took over her father's business and became director of Malaysia-based Petro- Mekong Corp, a supplier of line pipes and storage tanks to oil and gas industries.


Born in Malaysia, Ms Sit became a Singapore citizen in 2005. She has two children, Brian, 20, and Elizabeth, 13, from her first marriage which ended in divorce. She remarried in 2004 and holds an MBA from the University of New South Wales, Australia.


Q: What financial planning are you doing for yourself and your children?


I hope to leave my two children with an apartment each.


Having the security of a home in their own names as their life's foundation, they can build the rest.


I plan to have enough for myself on top of what I want for my children - that is, enough money for the rest of my life, and my own home separate from theirs.


It's useful to buy life insurance for your children when they are young as this can build nicely into a nest egg for them, which they can top up when they come of age.


The medical riders are important as they protect against the unexpected. Funds for education are also important.


The most important thing I did as a single mother was to ensure that my will was done right. This was so that at any time should I go, my children would be taken care of with the right guardians and trustee.


Q: What money management skills would you want to pass on to your children?


I would like to teach them to budget and save with a view towards achieving their own financial independence.


Also, to work for their wants, taking on jobs if required and not because they need to, but because it is good discipline. For instance, I made my son work at McDonald's for $3.50 a hour as it is crucial that he understands how difficult it is to earn the $3.50.


Family maps out financial goals for all future needs

Mrs Yash Mishra, 37

Regional head, private client service, ipac financial planning


A professional wealth manager for about 15 years, Mrs Yash Mishra has clear ideas about her personal financial plan. Prior to joining ipac in March 2004, she was a private banking relationship manager.


She is married and has a son, Arinjay, eight. She is expecting her second child next month. She has an MBA from Birla Institute of Technology & Science, India.


Q: What financial planning are you doing for yourself and your children?


We have a comprehensive financial plan and a financial adviser too. The rationale is you cannot be objective about your money. We have mapped out all our goals in the short, medium and long term - our retirement, children's education, travelling and my passion for art.


For retirement and future university fees of the children, we are building a globally diversified portfolio of equities, bonds, shares and cash. We have a disciplined approach to investing monthly in this through a savings plan.


We have adequate life and medical insurance through Medishield and private medical cover so that the big hospital bills are covered. For our home mortgage, we have a decreasing term cover.


We have our wills in place, just in case. This ensures that our children will have the chosen guardians in the event of a tragedy.


Q: What money management skills would you want to pass on to your child?


I try to instil a saving habit. My son has three piggy banks and he contributed the savings from one when we bought our car and is saving up the second to buy the new baby-on-the-way a toy. The third is for his Xbox. I take him along on grocery shopping trips. He learns to make a list of things he needs, compare prices and tries to prioritise them. It teaches him about deferring gratification.


He also earns extra money by doing chores such as car washing.


Realising the importance of saving for retirement

Ms Ginarita Ng, 48

Completed the Citi-Tsao Foundation programme

Secretary at a law firm


Ms Ng never quite realised the importance of saving for her golden years until her family went through a financial crisis.


This rude awakening came eight years ago when her husband suffered a major setback in his granite sand business.


An O-level holder, Ms Ng worked as a secretary for 15 years before becoming a housewife.


They owned two cars. Her parents-in-law live with them in a five-room HDB flat in Marine Parade. Ms Ng rejoined the workforce three years ago.


The couple have three daughters, Rachel, 21, Sharlyn, 18, and Nicole, 14.


Q: What financial planning are you doing for yourself and your children?


In the past, I didn't realise the importance of saving for my old age. My husband used to give me a monthly allowance of $2,500, which was spent entirely on household expenses and pocket money for my three daughters. I didn't think of saving from the allowance for a rainy day.


When his business failed, we gave up the cars and dipped into our savings. I surrendered my insurance policy, which also covered critical illness, so that the cash value could pay for my eldest daughter's tuition classes.


The Citi-Tsao programme changed my mindset about money. It is not being selfish if I save money for myself. It is just being practical. Previously, I didn't know how much I spent. Now I'm more careful with my daily expenses.


Q: What money management skills would you want to pass on to your child?


The moment they start work, I will encourage them to save from day one for their old age. I will also encourage them to buy life insurance, especially medical cover.


Learning to budget and keep tabs on expenses

Ms Joyce Tan, 54

Completed the Citi-Tsao Foundation programme

Looking for employment


Ms Tan never had to worry about finances before, but things are different now. Her husband, who was an executive director at an education firm, used to give her $600 to $800 a month for family expenses.


Things got bleak when he had a mild stroke in 2004 and took on a less stressful but lower-paying job. Soon the couple had to dig into their savings.


For Ms Tan, the Citi-Tsao programme was an eye-opener, and she learnt useful money skills such as budgeting. She is currently pursuing a six-month tourism diploma at the Tourism Management Institute of Singapore.


The couple have two children, Nina, 22, and Ken, 18. She has an O-level certificate and worked in the credit control department at Courts Furniture for 13 years before becoming a housewife. In 2006, she had temporary jobs in administration and as a secretary.


Q: What financial planning are you doing for your family?


I had no understanding of managing finances in the past. That is why I don't have much cash savings now, only a small sum.


The Citi-Tsao programme taught me how to budget and the importance of keeping track of our expenses either via receipts or by documenting them. I've always put the family before myself and the programme taught that I should learn to look after myself too.


I plan to build a retirement fund with my new job, putting aside at least 10 per cent of my pay every month.


Q: What money management skills would you want to pass on to your children?


We have to be role models for our children. I am teaching my kids to be frugal and to buy what they need, not what they want. Ignore the pressure of the mass media and build an emergency fund.


When they start working, I will encourage them to save 10 per cent to 15 per cent of their income.

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