Money is always a complicated matter not merely because it is difficult to earn, but precisely due to the challenges arising in saving it. Whenever a financial advisor is approached by men and women, their response to both of them differ, even though their requirement might collide. Before we begin on financial planning of women there are certainly a lot of myth which needs some bursting.
Financial planning, what is that? The biggest myth of all is women do not understand financial planning. This is because they do not interfere in finance matter unless they think the need to do so. However, if you go by their daily routine or shopping preferences, you will understand that women are rather best in buying things and pay according to their worth. Not just that, they time their purchases to perfection, just like in stock market, ‘buy low sell high’. They are the perfect manager of your house, which remains inflation free (due to bargaining) most often than not.
Give women a budget for month and they will append more wisely than men. This suggests that women work on extremely tight budget. They can accommodate everything – from child education to celebration and medical expenditure of parents to family vacation. They understand their needs well and have their objectives clear in their mind. Thus, when it comes to financial planning, they may create the ultimate portfolio keeping their in view of their crystal clear objectives.
Build an emergency fund: In such unfortunate event, women might be exposed to heavy financial requirement in a short period of time. Therefore, building an emergency fund is very essential in order to cater such emergencies and to have your future sorted. Above that women are prone to taking frequent breaks from work on account of maternity leave or spouse’s job switching or even raising children, this may stop income for certain time and may affect liquidity.
Higher life span: A higher retirement corpus might be ignored by many women. However they must understand longer life span would mean longer requirement of funds. Considering this fact women should start saving early and stay invested for longer period.
Take calculated risk: Women are known by their risk-averse nature, therefore any investment they make, are always least risky. This is because of the security of receiving the amount back when the same matures even if the return is minimal. Wealth creation is subject of long-term investment with mix of moderately risky and low-risk instrument. Investing only in low-risk instrument may leave you short of your desired objective. Low-risk equals to low gain, therefore, when the time comes you may end up significantly short in your wealth creation. Further, low-risk will provide a leverage in case of poor performance of high risk instrument and safeguard your investment.
Save more than your spouse: Today, in many sectors still, there is a huge pay gap for same work, due to gender bias. Women often earn less than men and this creates an additional burden in saving money. Imagine a woman earning Rs 30,000 per month and saving 10%, whereas a man of the same qualification earning Rs 40,000 per month but saving only 8%. In the given scenario, man saves Rs 3,200, while a woman saves Rs 3,000 only. This Rs 200 at the beginning might look negligible, but considering the power of compounding every month, the figure becomes incredibly high.
Understanding your husband’s finances and debts: Men often feel women should be a part of financial planning. However, human life is subject to various uncertainties. Hence, as a wife she must know what investments are active and debts incurred and pending. Keeping abreast of your spouse’s finance is necessary and monitoring them is equally important.
Every important decision is routed through women in the family, then why not financial planning? Every woman must have health, wealth and happiness as their motto of life and what better day to adopt it than Woman’s Day. So, this Woman’s Day invest not only in healthcare programmes and stress-free life but also in long-term investment options to create wealth not only for you but also for your family.
