It is appalling that a recent survey by Tata AIA Life Insurance revealed that more than half of the women surveyed are financially dependent on the men in their families. Money management remains a male-dominated domain in a country that strives to empower its women regularly.
What makes financial planning a male-oriented profession or duty is that even the most educated and successful women abstain from deciding their finances. The men in the family handle all the finances including the money earned by their wives, sisters and mothers. There is so much dependence regarding money management that most women either are not aware of their investments or myriad investing opportunities available. Once women learn how to take charge of their finances, they will be able to strive to enable others to do so in the coming years.
Handling your finances is not rocket science. You or I or any woman can do it provided we are aware of our financial goals. This again depends on varied earnings, savings potential, career breaks and approach to finances.
It is not difficult for women to take charge of their finances through proper planning and investment. All you need is the intent to do so. The understanding of how personal finance works for each becomes simple. You need not feel daunted by all the talks of analysts and experts about finance. After all, the doing is more important than the outcome. You must take the first step. It is then you will realize that the journey will teach you more than the destination itself. Just enjoy the ride, the highs and lows and the recurring bumps so synonymous with life.
If you feel inclined to decide what you want to do with your money, just adhere to the following.
Know how much you earn and spend
You can never be financially fit unless you are aware of your monetary habits. This means that it is not enough for you to know how much you earn. You must be aware of your spending habits. This means that you must check if you can hold your purse strings tight. You must use a journal or spreadsheet to list your expenses each day. This will help you understand if you spend more on your needs or wants and then decide your finances accordingly.
Set your future financial goals
Do not wait for others to tell you how to manage your money. Instead, set your financial goals from the beginning. This is possible only when you have an end goal in mind. Planning your finances is pointless unless you know what corpus you are looking forward to in the future. Know how much money you might need what you need, your financial aspirations, retirement corpus, your travel plans post-retirement and then work on ways to achieve your goals.
Be specific about your needs. A haywire approach will not help. Ensure that your goals are measurable, or else without them, you will not be able to do a balancing act. Your financial goals depend a lot on how much you earn, spend, save and invest. That’s why your goals must be achievable. Last but not least, make sure that your goals are realistic and time-bound. This will help you achieve them within a stipulated period and plan your short-term and long-term investments.
Save enough for emergencies
Being a woman, you assume many roles as a daughter, sister, wife, daughter-in-law, mother, and more. This means being burdened with responsibilities, thus, heightening the possibility of succumbing to emergencies or similar situations. With enough emergency corpus in place, it becomes easy to battle adversities. This is why you must have an emergency fund in place that can help you stay afloat in financial crises. Start with saving enough money in the fund till you have accumulated a corpus equivalent to six to 12 months’ worth of expenses. Not that you have to keep the entire amount in cash. You may save the money in a liquid or an overnight fund to continue earning returns on the money, thus, allowing the corpus to expand with time while ensuring enough liquidity whenever required.
Buy a health policy for yourself
Are you certain that you will never become ill, or do you want to see your money drained by paying off your family's medical bills? Uncertainties may come knocking at your door any minute, which means that having the required insurance would pay off in case of sudden hospitalization and subsequent treatment. Many insurance companies in India offer premium discounts to women to encourage them into buying insurance plans, thus, ensuring much-needed security for them and their families.
You are going to retire someday. Why not start planning your retirement corpus early? Retirement is synonymous with continued expenses while having no or very little access to regular income. Very few women plan their retirement hoping that their men would look after them in the golden years of their lives. While there is nothing wrong with this supposition, being financially dependent on your spouse may not be the best thing to do. If you have not planned your retirement yet, you may start this year by parking a fixed percentage of your savings in National Pension Scheme. For better earnings, you may also invest a bit into mutual funds depending on your risk appetite and your investment horizon.
Being married does not entitle you to remain naïve and foolish throughout. You must continue to learn more about personal finance tenets and available investment opportunities to make the most of them. You must not hope to be financially free overnight. However, regular studying of finance and understanding how investments work will enlighten your way to a more secure financial future.
You must not aim to become rich in a day. Focus on your earnings first. Money begets money. Unless you are sure of the regularity of your income, you cannot plan your savings and investments accordingly. The financial world is vast; all you need to do is avoid pitfalls and be aware of the financial tools available for investment.