Savings has always been a strong component linked with Indian women. Hiding cash for a rainy day in kitchen jars or wardrobes has traditionally been a part of saving plan for many. But there is a contradiction when it comes to saving for “her”. Ask any young 25 to 30 year old working woman about her retirement planning goals and chances are that they may not even be a priority. But rising inflation, increasing divorce rates and increasing financial needs all mean that savings must be an essential part of money management for the urban woman.
The concept for ‘family first’ is so deeply embedded in the psyche of most Indian women that saving for themselves is either low priority or a non starter due to lack of funds after catering to the financial needs of their families. Here are some of the reasons why working women should be saving proactively for a better financial future.
Women earn less than men:
The fact remains that women are getting lower salary as compared to men on an average. A recent Monster Salary Index (MSI) survey revealed that the median gross hourly salary for Indian women stood at Rs. 184.8 compared to Rs. 231 for men. The lesser than average earnings mean that as a woman even if you are contributing the same percent of your monthly earnings towards savings, your overall savings component is likely to be far lower compared to men.
Women work for fewer years:
Women tend to work lesser number of years compared to their male counterparts. The time off for maternal leave, child birth and other domestic chores results in women taking longer work breaks. Rejoining work or rejoining a different company after a long break may also result in downsizing of salary, which is again a constraint for savings.
Women have a higher life expectancy:
Women on an average live longer than men. The average life expectancy for women is 69.9 years compared to 66.9 for men. With increasing medical healthcare, the numbers are likely to increase even further. The longer you live, the more is the need of saving a dedicated retirement corpus to take care of your financial needs. Women usually ignore retirement corpus relying on the savings of the family or their spouse. But the possibility of remaining single, divorce or living alone can leave a woman financially vulnerable. All the more reasons to have a dedicated financial corpus post your active work years.
Tips to increase savings components for women:
Here are some essential tips for working women to ensure they have adequate savings component post their working years leaving them financially secure and ready for all future eventualities.
Save a higher component each month:
Saving more money each month must be a part of your long term financial plan. Instead of the regular 10% monthly savings, ensure you are saving at least 20% of your monthly income towards savings. This can result in a sufficient savings component even with a lower than par salary compared to males.
Instead of investing in traditional investment options like FDs or debt funds, seek a more proactive investment approach. Seek investment options like mutual funds SIPs with ECS which offers better returns.
Seek higher remuneration:
Seek higher financial remuneration and bargain with your employers. Also it is pertinent to keep a watch out for better paying opportunities to maximize your income and savings component as a result.
Conclusion: Savings is a financial priority to ensure you are financially secure in the sunset years of your life.
Consult our expert. Take help of our tools. Be part of our community. Discover best suited financial products with us.
Stay tuned to the world of finance