09 Jan 2013
In South Africa, 51 percent of women who currently own a home do not know the interest rate on their home loan, according to a Visa 2012 Survey.
According to a report released by Visa on the results of its first annual Women’s Money Matters Survey 2012, 35 percent of women own a home and yet 51 percent of women who own homes do not know the interest rate on their home loan.
Investopedia describes an interest rate as the amount of money expressed as a percentage of principal by a lender (banks, financial institutions) to a borrower for the use of assets.
Interest is essentially a rental, or leasing charge to the borrower, for the asset's use.
When the borrower is a low-risk party, they will usually be charged a low interest rate and if the borrower is considered high risk, the interest rate that they are charged will be higher, according to Investopedia.
Home Loans South Africa advises home buyers to consider whether they have a fixed or variable home loan rate.
A variable rate is the most common and it fluctuates as the prime lending rate goes up and down while a fixed rate will remain the same for the agreed period, which could be six months to two years, depending on what is being offered by the banks at the time, according to Home Loans South Africa.
Click here to see examples on how to calculate interest rates on your home loan.
The report surveyed 2 000 women from all income groups across the country who have household financial decision-making responsibilities.
It was designed to highlight women's attitudes and behaviour toward money matters and identify areas of risk.
The survey reveals that 54 percent of women see property as their preferred investment choice while only two percent invest directly in shares, 37 percent have a pension or provident fund and 9 percent do not have any investments.
Investing in shares was named the worst investment choice in ranking.
With 71 percent of women having their own bank accounts, women are increasingly becoming financially savvy to an extent that 10 percent of women in relationships kept a secret bank account that their partner doesn’t know about (talk about girl power!).
The average ‘dirty little secret account’ has R17 681 in it.
It gets better, only one in two women have a credit card and 9 out of 10 women know what their outstanding balance is on their cards.
Although women are financially savvy, the survey shows that 2 percent spend more than R1 000 a month on beauty treatments, multiply that by 12, it’s a saving of R12 000 that could go towards the deposit for a new home for those who are still renting.
Overall, according to the survey, women spend on average R152 per month on coffee while five percent spend over R500 per month buying coffee and that is 8 out of 10 women who drink coffee or cappuccino.
Visa says 65 percent of women have a car with a current average repayment per month of R2 736.
Of course, they would also like to pay off their debt as fast as possible provided they win the Lottery (53 percent).
2013 financial wish list
Armed with the survey results, Property24.com spoke to a few women regarding their financial goals for 2013.
It seems saving money is an annual New Year’s resolution, although for many and in practical terms, it remains just that – a wish.
Perhaps starting small and having specific, realistic and achievable financial goals is the way to start. If you buy coffee daily, you can cut on that and make it a weekly treat - you save money, maybe even buy special coffee that way you still have your treat without forking out cash daily.
These articles can also give you tips and pointers on how to get there: tips on scoring home loan finance, tips on taking control of your money, a man is not a financial plan and top 10 rules for investing.
The majority of women say they would like to save more money this year in order pay off debt and close store accounts and instead, pay cash for clothes.
Most of the women feel they spend money buying things they want rather than what they need - life’s little luxuries such as chocolates, an addition to their shoe cupboards and designer clothes.
If you thought R1 000 is a lot of money to spend on cosmetics and beauty treatments, think again.
One young woman who has a small child is taking it a step further. She is saving money for a boob job (yes you heard right) and according to her, once you have had a child, your perfect set of breasts get ruined in the process and we know that in a world of cleavage, for many not having the right look is an absolute no-no.
Her money will be put to better use through this procedure to restore her bosom, still, that is her financial goal.
Beauty treatments play a huge part in many women's lives, although not always affordable.
One woman would like to be able to pay for her own manicure, pedicure and hair treatments and fancy shoes when she needs them.
“Most importantly, I would like to be able to afford a weekend getaway on my own,” she says.
Some women would like to make more money from the properties they already own.
An example would be to add two back rooms to the existing property and lease it for extra income, which will then be used towards saving for children’s tertiary education and emergencies.
For those people who seemingly cannot ever have enough money, one woman says she and her friend have started a small loan business charging reasonably low interest rates to people who need funds.
The report shows that 30 percent of women are willing to spend more than six months’ salary on a wedding, overall, women spend twice as much on a wedding than on a honeymoon.
On average, women are willing to spend R54 885 on their wedding.
One woman has three specific goals in order of their importance, she would like to get married although she hasn’t revealed how much she will spend, buy a home and invest in shares.
Here is the 2013 wish list:
1. Buy shares and stocks – these women understand the power of paying yourself first
2. Save for retirement
3. Save money towards a deposit for buying a new home
4. Pay more money into mortgage loans. One woman says she would like to pay 20 percent of her salary into her bond to reduce the loan term.
There are benefits of paying more into your home loan, read the article here
5. Pay off debt, credit cards and close clothing store accounts
6. Further education
7. Buy a new car
8. Investment clubs that will enable funds to be shared equally at the end
9. Cut down on luxuries and focus on needs
10. For those currently renting, they would like to buy
Overall, the recurring theme is saving money although some still feel a savings account is the way to go while others would like to buy shares and yes, retirement is a big worry for many. – Denise Mhlanga
Denise MhlangaProperty journalist at property24.com
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