Financial Planning for Women

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.