Women and money

Women are recognized to be the best money managers when it comes to managing the household. This is widely recognized. However, in our workshops we found that a lot of women who were earning and contributing to family expenses, had left financial planning and investing decisions to husbands. Reports show that women live longer than men and so statistically will need retirement income for a longer time. This makes financial planning for retirement more important for women. Also, women usually have to leave the workforce to have children, which means they may lose out on growth opportunities, earn less and possibly end up with lower pension benefits, EPF etc. on retirement. We take a look at a few measures that women can take to make a more secure future for themselves.

First, take stock of your own assets – what you own and where it is. Write down all details of the bank deposits in your name, all insurance policies, etc. Next, make a detailed note of all incomes that you earn by way of your salary and expenses and the monthly savings and investible surplus you are left with.

Keep details of husband’s investments: It is imperative to have complete details of the spouse’s bank accounts, FDs, MF investments and demat accounts. Very few women we met in our workshops have details of the husband’s investments.

Demarcate clear boundaries: It's important to do so with your spouse for routine expenses. It will be easier to determine personal monthly expenses and hence monthly savings. It should also be clear as to how liabilities like housing loans etc. are to be paid.

Keep an emergency fund: Do not touch it unless it is a real emergency. Keep emergency funds  to the tune of 3-4 months salary in a separate deposit. When this level is achieved, one can then take the next step towards financial planning.

Goals and investing for goals The next step is to identify financial goals for herself. Goals, typically, include higher education of children, their marriage, buying a car etc. It is extremely important to correctly estimate the sum needed for their fulfillment with the time frame in mind. Also, any likely liabilities should be identified and accounted for, as this affects the quantum of investment substantially. For eg: repayment of a housing loan. In case financial planning seems too overwhelming, it is recommended take the help of a financial planner who can help visualize and plan for long-term financial goals and give investing options.

Insurance: Many women do not consider insurance, both life and health, as priority. However, with rising medical costs it just makes sense to be insured adequately. A working woman contributing to family expenses should have an online term life insurance cover and a health insurance plan along with her husband.

Retirement Planning: Retirement planning has become important in the last two decades. The joint family structure has disintegrated, children work far away from home and are involved in their lives and careers and parents cannot realistically expect their children to bear their financial liability during their retirement years.  Hence, it’s critical for every woman to plan for retirement, the earlier the better. Save and invest as much as you can.

Regular Income when not working or taking a break from work: Even when women take a break from their career, it is a good idea to earn income from working a few hours a day from home. Taking tuitions, teaching a hobby etc are common ways to earn a regular income.

Keep documents securely and in an organised manner: Utmost care should be taken to ensure that all documents should be clear in every respect, especially real estate ownership deeds, so that there is no ambiguity later.

Your financial security is dependent on your attitudes and your willingness to take your financial future into your own hands.