Women tend to live longer than men and may face more financial challenges in retirement such as higher healthcare costs, and hence it's important for women to plan for their retirement, says Rajani Tandale, Product Head – Mutual Fund, 1finance.
In an interview with MintGenie, Tandale said that basic financial concepts such as saving and spending can be introduced around the age of five or six.
Q. What is the most important financial lesson that you would like to impart as a mother to your child?
The first financial lesson that I taught my son was the importance of saving and budgeting. I always encourage him to save a portion of his pocket money or any money he earns and to think about his future financial goals. I showed him how to create a simple budget and track his expenses.
Encourage your child to start investing early, even if it's just a small amount. Explain the concept of compound interest and the benefits of long-term investing. By starting early and consistently saving and investing, they can build wealth over time and achieve their financial goals.
Q. At what life stage of the child, do you think mothers must start discussing savings and investments with their wards?
It's never too early to start teaching children about finance and investment. Basic financial concepts such as saving and spending can be introduced around the age of five or six. As children grow older, more complex topics such as budgeting, investing, and debt management can be gradually introduced. By the time they reach their teenage years, they should have a solid foundation in financial literacy. Parents should continue to have open and honest conversations with their children about money throughout their lives.
Q. Be it homemakers or working women, why should women focus on buying insurance for themselves?
Buying insurance is not gender-specific and should be based on individual circumstances. The two important factors to consider when buying insurance are the potential financial impact of one's death on their family or the need to repay outstanding loans such as a home loan. In such situations, purchasing term insurance can be a smart financial decision to provide financial protection for one’s loved ones and ensure that their liabilities are taken care of in case of an untoward incident.
It's important for individuals to assess their own insurance needs based on their financial situation and choose a policy that best suits their requirements.
Q. What financial gifts would you like to gift yourself as a mother this year?
There is no specific financial gift that I would like to buy for myself as I do not want any changes in my current financial plan, but I would like to create my will.
Q. Do you advocate mothers working on a separate retirement corpus to secure their future?
Women tend to live longer than men and may face more financial challenges in retirement planning such as higher healthcare costs, and hence it's important for women to plan for their retirement.
Working mothers should aim to create a separate retirement corpus, while homemaker women should actively participate in financial decisions with their spouses, ensure that nominations are clearly mentioned in all the investments, and improve their financial literacy. This can include understanding their expenses, investing in suitable retirement products, and regularly reviewing their financial plan to ensure that they are on track to meet their retirement goals.
By taking proactive steps to plan for their retirement, women can secure their financial future and enjoy a comfortable retirement.
Q. More people are now writing wills to remove discrepancies regarding the nomination. Do you think today's mothers should also pen their wills?
Yes, it is important for everyone, including mothers, to have a will. A will can help ensure that an individual's wishes are carried out after their death and can help prevent family disputes over property and assets.
Q. Which investment instruments do you think would serve best to today's mothers?
The best investment instruments for mothers may vary depending on their individual financial personality, risk tolerance, and time horizon. Some common investment options for mothers may include mutual funds, stocks, and bonds, etc. However, before making any investment decisions, it's important to consult with a qualified financial advisor who can assess their specific financial situation and recommend a suitable investment strategy.
An advisor can also help mothers understand the risks associated with different investment options and create a diversified portfolio that aligns with their financial goals and risk tolerance. By working with a financial professional, mothers can make informed investment decisions and maximize their chances of achieving long-term financial success.