Insurance is a significant investment that can give you financial security and peace of mind in times of apprehension, says Divya Jain, Co-founder, Seekho.
In an interview with MintGenie, Jain said that children can acquire the knowledge and abilities required to make wise financial decisions and realize their financial objectives by learning about personal finance and investing.
Edited Excerpts:
Q. What is the most important financial lesson that you would like to impart as a mother to your child?
As a mother, the most significant financial lesson I want to teach my child is the importance of saving money. Saving money is important since it gives one a feeling of financial security and can aid in achieving one's long-term financial objectives. In addition, I would impart to my child the value of compounding and investing for long-term goals.
Compound interest can help build a small investment into a sizeable sum over time, and investing early in life can result in a large increase over time. To help them reach their financial objectives, I would also emphasize the need for budgeting and financial planning. My child can learn financial responsibility by making a budget and keeping track of costs.
Additionally, I would impart to my kids the value of credit and debit in maintaining good financial standing. To keep healthy financial status and reach long-term financial objectives, it is crucial to comprehend responsible credit management and how to stay away from excessive debt. I would also stress the importance of volunteering. My kids can cultivate an attitude of gratitude and empathy that will benefit them throughout their life by participating in charitable endeavours and providing aid to those in need.
Finally, I am highlighting the value of financial knowledge. My child can acquire the knowledge and abilities required to make wise financial decisions and realize their financial objectives by learning about personal finance and investing.
Q. At what life stage of the child, do you think mothers must start discussing savings and investments with their wards?
Teenagers may start working part-time jobs or earning their own money around this period, so it can be a good idea to start teaching them about investments at this age. In addition, it's never too early to begin educating kids about the value of saving and investing and how doing so can help them reach their financial objectives in the future. Mothers may help their children build a solid foundation of financial literacy that will serve them well throughout their lives by including them in family finances and gradually teaching them to more sophisticated concepts over time.
Q. Be it homemakers or working women, why should women focus on buying insurance for themselves?
Women, whether homemakers or professionals, should prioritize purchasing insurance for themselves since it gives them security and financial protection during unanticipated events. Here are some reasons why women should consider buying insurance:
Protecting financial stability: Due to gender pay gaps, job disruptions, or the necessity to care for family members, women may experience financial difficulties. Insurance can act as a safety in the event of a loss of income or unforeseen bills.
Addressing healthcare costs: As carers and primary wage earners, women frequently play a significant role in their families. They could endanger the financial security of their family if something were to happen to them. In the event of illness, injury, or death, having insurance can assist them to make sure that their loved ones are taken care of. Due to their needs for reproductive health and longer life expectancies, women typically have higher healthcare costs than males.
Addressing the impact of career interruptions: Due to parental duties, women may have job interruptions, which can cause lost wages and a decrease in retirement funds. Having insurance might act as a safety net during these unsettling times.
Addressing the impact of the pandemic: The COVID-19 pandemic has highlighted the need for financial protection against unexpected events. Insurance can help protect women's financial stability in case of job loss, illness, or other unforeseen circumstances.
Getting insurance can help women safeguard their financial security, give their families a safety net, take care of healthcare expenditures and job disruptions, and lessen the effects of unforeseen catastrophes like the pandemic. It’s a significant investment that can give you financial security and peace of mind in times of apprehension.
Q. What financial gifts would you like to gift yourself as a mother this year?
This year, I would like to invest in courses and books for self-development. I believe investing in courses or books on leadership, entrepreneurship, or personal finance can help me learn new skills or develop new interests. Additionally, I would like to allocate a budget for self-care and personal development, establish an emergency fund and make charitable contributions for the needful.
Overall, I believe it's important for mothers to prioritize their own financial well-being as they continue to care for their families.
Q. Do you advocate mothers working on a separate retirement corpus to secure their future?
Given the gender wage gap and other systemic injustices that women experience, it is essential for mothers to actively participate in protecting their financial future. Assuring their financial independence and avoiding having to rely completely on their spouse or family throughout their retirement years are two benefits that mothers can obtain by creating a separate retirement corpus. Furthermore, knowing that they have taken precautions to secure their future, having a separate retirement corpus can provide people with- a sense of security and peace of mind. As a result, I fervently urge women to focus on creating a separate retirement fund in order to safeguard their future.
Q. More people are now writing wills to remove discrepancies regarding the nomination. Do you think today’s mothers should also pen their wills?
I can say that everyone, including mothers, should think about creating a will. A will can ensure that an individual's desires for the disposition of their possessions and assets are honoured after their passing. Disputes and confusion within the family can also be avoided. Although attitudes towards wills and inheritance may be influenced by cultural or societal influences, in the end, it is a personal choice that should be based on unique circumstances and preferences. To guarantee their desires are carried out and to give themselves and their families peace of mind, women, like anybody else, should think about the advantages of creating a will.
Q. Which investment instruments do you think would serve best to today’s mothers?
In my opinion, mothers need to have precise objectives for each of their aspirations, not just for their families but also for themselves. As a mother, I can consider safeguarding my financial future and that of my family by investing in term deposits, mutual funds, and life insurance. Additionally, in order to make wise judgments, it is crucial to comprehend the risks and potential rewards linked to each investing instrument.
Mothers should diversify their portfolios and check their assets on a regular basis to make sure they match their financial objectives and risk tolerance. Last but not least, getting expert financial counsel can help you make smart investment choices.
