Gender equality is something
that many literates stand for. It is only fair that
women be treated and considered at equivalence with men in all strata of life. Today women are empowered and are at par with men in all spheres of life. With the rising cost of living and expanding human needs,
women have started sharing the financial responsibilities of the household with
their husbands. This has not only made them economically powered, but also
financially independent. But can financial independence be regarded the same as
financial security?
A monthly pay check in your
bank account alone cannot render you capable of meeting all your financial goals. The way you plan
and manage your finance will result in fruition of goals later in life.
However when the word 'financial planning' is talked about, many women ignore it or
find themselves helpless. A recent Nielsen survey conducted across a few cities
in India
showed that only about 23% of the working women take their own financial
decisions. It is unfortunate that despite of being financially independent,
many women in India
feel less confident or are not permitted to take their own financial decisions
by their families.
Importance of Financial
Planning...
Although the broad financial
planning process is similar for men and women, the latter might be required to
manage their finances differently at times. The working lives of women might be
interrupted during certain important events of their lives such as marriage or
children. A classic example for this would be Mrs Sudha Murthy (the wife of Mr
Narayana Murthy, the founder of Infosys). Inspite of being highly qualified and
experienced Mrs Murthy took a step behind from Infosys for the sake of her home
and children. Women sometimes have certain priorities which might be more
pressing than their career.
A woman's life is also
greatly altered when she is widowed or a divorcee. For these reasons women
should not be totally dependent upon husband or father for your living.
Indulging in financial planning from an early stage in life will also enable
women to plan finances for all the aforesaid events apart from achieving
financial goals.
Women may consider the
following points to help establish a viable financial plan:
- Define
your Objectives:
Unless you know where you are headed you won't get there. So, the most
important thing to do while you sit down to plan your finance is ask
yourself why you want to plan. For a married woman with kids, the answer
could be child's education or child's marriage. For a woman whose kids
are already married, the desire to plan could stem from a dream to set up a small boutique,
for instance. For a woman who is yet to get married, it could be for her
marriage. A single woman might also want to save for buying her own home,
car or even getting a higher degree. Also, it would be prudent to filter
your goals as short- term and long-term
- Calculating
Investment Amounts:
Once you have determined what your short and long-term goals are, you need
to find the cost of achieving them. This would probably be much higher in
the future than what their worth is today, mainly due to the impact of
inflation. Then you must work out the amount you need to save per month so
that you can achieve these goals. Such a goal based planning will help you
to get a clear picture of how a systematic approach can help you to
achieve your financial goals.
- Saving: Once you have determined how much
you need to save per month to meet all your goals, you need to start
acting upon it. In case you feel that you are not able to save as much as
you had planned, then have a look at your monthly budgets. Reduce your
household and balance your expenses accordingly.
- Preparing
an Investment Plan:
Saving your money alone will never help you achieve your goals as the
inflation bug eats into your hard-earned money every single day. To fight
inflation and to make your money grow you need to start investing.
Depending upon your risk appetite and risk tolerance level, you must
determine your investment avenues. It is also prudent to diversify your
investments across different asset classes and imbibe an appropriate asset allocation plan to ensure that your funds grow at a
desirable rate and are also protected during uncertain economic conditions
and market volatility.
- Executing
the Plan: After
preparing an investment plan, you must start the execution process. This
involves for instance, investing in the diversified equity fund to buy
your house after 10 years, or investing in plans for your child's
education. All the investments and insurance options that you have
outlined in your investment plan have to be bought. It is important to
appoint a nominee across all your investments, bank accounts and insurance
products so that everything is passed on to your choice of beneficiaries.
- Reviewing
the Plan: To
ensure that you remain on course it is important to review the financial plan. This will
enable you to incorporate any economic or personal changes in your plan to achieve your goals
as intended.
- Redemption: As the event you have been
investing for, is upon you, you need to redeem your investments. You also
need to understand and plan for the taxation issues involved with the
redemption of your investments.
Another thing that women must bear in mind is apart
from managing their own financial affairs; they must also be actively involved
in the financial matters of their family. Women as spouses or daughters must be
aware of all the investments and liabilities of her husband or father so that
she never faces helplessness and is never misled by any of their debtors or
creditors. They must also be involved in the creation and review of the
financial plans which are made for family as your opinion about various matters
can bring a great deal of clarity and another perception to the financial plan.
This not only applies to single or working women but also women who are
home-makers and are responsible for taking care of their house and children.
Without the team effort by all the members the financial objectives and dreams
of a household might never come true. It is high time that all the women of our
country came forward to contribute to the financial affairs of their family,
became confident to take their own financial decisions and undertook prudent
financial planning for their financial security.
