Financial Planning for Women

It is surprising that in a country like ours, where we have women leading some of the big names in banking and financial industry, the financial literacy among women is as low as 16%. (survey by National Centre for Financial Education). Women who manage their home expenses and emergencies so well, feel intimidated by the investment jargon and strategies.As a financial planner, we might treat both gender on parity but the truth remains that women need more emotional connection and simplicity on planning over men.

Why this difference?

Women in addition to planning for her family goals has to shoulder responsibilities for her own individual identity. In India, we have a lower women working force between mid 20's to mid 30's. In this period, women tend to take a back seat on her career front to manage her home, start family and above all be a dutiful mother to up bring a well mannered child. Women have always remained in shadows of their male counterpart- initially the father, later her husband and lastly her son. This has made women so financially dependent that they are never able to take decision for themselves.

So, what if any catastrophe was to remove any of our sheltered provisions? What if you have to shoulder the responsibility of your widowed mother or up bring your children alone due to your spouse death, disability or divorce? Are you ready to balance the dual roles of a money earner and investor? Do you know the basic plan to be kept ready if you have to start from zero?Today,we shall be focusing on some of these pointers to be kept in mind for any women fending for herself and her family.

a) Identify the working hands and mouths – It is necessary to list out in case if you have any additional source of income from previously made investments. Ask all sort of questions to your insurance agents regarding the policies of deceased person to confirm the same. There could be any pension amount to be made available over the death of Provident fund member. In case of divorce, are you expecting any alimony? Is it one time or regular over time? 
 

Once, you have answer to these questions, add what is your monthly income going to be. List out all the essential expenses and other ad hoc expenses. The best way to identify them are to read previous cheques book descriptions, bank account narration or study credit card bills. This simple exercise would help you prepare monthly cash flow requirement.

b)Put aside emergency funds – Out of the lump sum funds received on happening of any of the above incidents, keep out 3-6 months expenditure funds aside to act as contingency for some emergency requirement. It can be parked in a Bank FD, Liquid Funds or in separate savings account.

c) Revise your life cover- Previously, as a women you might not be the primary income provider. Hence, it is now necessary to raise/avail your life cover to support your entire family needs.

d) Re work on your goals- It is possible that you had previously planned different goals towards family and for yourself. However, now with different situation, it is reshuffle the goals – in terms of priority, allocation of surplus and lump sum amounts. Also, include the new lump sum made available. It is necessary to note that unlike men, women prefer to prioritize family over rest. So if you plan to take a break for your sibling or children's education landmark years remember to save for these years.

e) Plan your estate distribution – List down all your assets, personal valuable belongings , pieces of jewellery or even expensive designer wear and make a plan to give out to your next generation. Don't leave any loose ends, which can cause uproar after you in your family.

Thus, we wold like to say that although men or women are equally capable of making good decisions, women mostly don't exercise their right. It is necessary for women to now be prepared for any catastrophe.