Whether you are a multi-tasking homemaker, a busy career woman, or a superwoman juggling home and career, financial planning decisions are something that you cannot elude. So, what are the top 6 financial planning decisions every woman must make, regardless of whether the goal is to buy a dream house or plan for their children’s higher education?
Meeting your professional and financial aspirations, without depending on others is the key here. Here’s how you can accomplish the mission-impossible and thrive, instead of just surviving.
#1 Invest Confidently For women, financial well-being is associated with security. While one may think there’s safety in being secure, being conservative too can cost you money. Inflation causes investments to erode in value. So you need to think beyond traditional options such as PF and Fixed Deposits. You can aim for equity-linked investments such as MFs and shares. But potential risks and rewards need to be studied, before investing. Invest time in learning how to be a confident investor.
#2 Weather the Financial Storms Insurance coverage is important for working women as well as homemakers. Taking adequate financial protection with an umbrella coverage policy will protect you and your loved ones from uncertainties and challenges. The cover should be approx 10x times the annual income, given the rising expenses of medical care and maternal or childcare. Women who take the time to save are better prepared to meet their financial goals and tackle contingencies. This is one of those financial planning decisions you'll be glad you took.
#3 Always be Prepared Emergency funds can help women to tackle catastrophic events like the death of the breadwinner, divorce, health issues, or even job losses. Financial planning is the key to mental well-being, when it comes to managing the small as well as big challenges in life. So park some money in liquid investment tools like liquid funds. If you are conservative, even a savings account or gold will help you in investing in an emergency fund, rather than being locked up in a ULIP investment or SIPs.
#4 Aim for Disciplined Investments With so many investment opportunities, strong financial portfolios require disciplined investments and smart planning across a time period. Creating distinct portfolios for different goals like home, retirement, etc and working towards it with a discipline is the key. Regularity of investments is a critical requirement, especially if you’re saving through plans like recurring deposit. Monthly plans and taking decisions on time are other key aspects of securing a brighter future.
#5 Make Retirement Planning a Priority Many women forget retirement planning or underplay its importance relative to other priorities like children’s education, marriage, etc. Every independent and strong lady needs to invest for her silver days and help her wealth gain from the compounding rates and booming markets. It can be a well planned pension plan, RD, or a PPF. If you start retirement planning early, you have enough time to put it in equity investments and expect above normal returns in a relatively risk-free way.
#6 Plan Your Financial Roadmap Have a clear financial plan that factors in your monthly expenses, debts, assets, family goals, and personal goals. It is not enough to make savings your first priority. You also need to control debt. For single women, it is important to consider how to spend wisely and use your capital to make investments that yield positive returns. Marriage brings with it shared management of finances. Children follow and this entails costs of childcare and education. Expenses such as buying your own home are necessary and can take a toll on finances, without proper planning.
Good financial planning entails taking care of all nitty gritties of the future, like adding nominees for your accounts, insurance papers in place, and the like, so that not only you, but your children and beneficiaries can also enjoy financial success. The strength of an empowered woman comes from her ability to support herself and others. So, what are you waiting for? Whether you want to avoid debts or penny pinching, take the above financial planning decisions and make tomorrow all your own.
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