- Take charge today – Generally, women tend to be ignorant about money management and leave money matters to their fathers or brothers, and after marriage to their husbands. If the family members aren’t experts in the same, this would result in unplanned life goals and investments in wrong products. So, it is important that a woman is an equal party to money-making decisions.
- Start with Budgeting – Writing down your expenses month on month helps you know the break-up of your living expenses such as grocery, utility, domestic help expenses, insurance premiums and lifestyle expenses like vacations, luxury buying, etc. Budgeting helps you identify unwanted and avoidable expenses and divert the same towards investing.
- Emergency Corpus – Every woman should create this corpus for any contingency which might arise due to job loss, a medical emergency in the family and especially women who take smaller sabbaticals to get married, raise a family, for parents or in-laws who need help due to ailments or to bring up children. In all these situations, there won’t be any cashflows coming in so one needs to create an emergency corpus.
- Goal-based Investing and Diversification – One should always choose Goal-based investing after Risk profiling is taken into consideration. Goal-based investments help one have clarity in terms of time horizon and the risk one wants to take for the set target, and not panic if an unwarranted situation or crisis occurs. It helps one to invest in diversified asset classes such as – Equity (Mutual funds, Direct stocks, PMS AIF), debt (fixed deposits, Post office instruments, PPF, EPF, Guaranteed insurance plans), precious metals like gold, silver and Real Estate. As the saying goes – do not put all your eggs in one basket.
- Retirement Planning – The most ignorant subject in our country is Retirement Planning, as we believe that our children are going to be our retirement plan. We should stop expecting and start saving and investing the smallest portion of our income from day one of our jobs and also continue to hold PF/PPF which we will receive as a bigger chunk at retirement.
- Life Insurance – The only life insurance product that one ever needs to buy is Term Plan. If you are an equal contributor to your family’s income, then a Term Life Insurance plan is a must that would benefit your family financially in your absence. The corporate covers are there only till you work with your current employer and cannot be continued later.
- Health Insurance –Health Insurance takes care of any medical emergency which might wipe off all your life savings. With increasing lifestyle and age, we tend to catch up on ailments along with hereditary ones. Enhancing health cover from time to time is important, keeping in mind medical inflation with health care costs.
- Inflation and tax efficiency – Inflation is the number one enemy of investments. It eats into your savings and investments if not planned well. Your investments have to beat inflation to grow, else they are of no use. While choosing an investment product, chose a tax-efficient product that would, in turn, have better inflation and tax-efficient returns. Tax Planning should be done in April and not during the end of the financial year.
- Nomination and Will – One of the very important aspects of investments is Nomination. Nomination helps one to get charge/ ownership depending upon the investment and its value to be transferred to its ultimate beneficiary. Check if your spouse has registered nominees or has written a will for all their investments, jewellery, bank lockers, insurance policies, Demat and bank accounts, real estate, etc.
Conclusion: Ultimately, all of the above aspects play a vital role in achieving financial freedom. So, it is all the more important to not procrastinate and start your financial planning today.
Views are personal: The author – Nisha Sanghavi is a co-founder of PROMORE
Disclaimer:The views expressed are of the author and are personal. TAML may or may not subscribe to the same.The views expressed in this article / video are in no way trying to predict the markets or to time them.The views expressed are for information purpose only and do not construe to be any investment, legal or taxation advice. Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management Pvt. Ltd.will not be liable in any manner for the consequences of such action taken by you.
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