Women do face unique challenges when it comes to money; but they can empower themselves to control their financial future
In this article you will learn about
· Women are prudent with money
· Understanding financial freedom
· Working towards financial freedom
There is something about women that often gets under appreciated – ability to smartly juggle between work and family. Look around and you will find women successfully working in all possible professions, including some where only they fit the bill. Yet, there are cast in unfavourable stereotypes when it comes to managing finances. They are perceived to be poor at managing money and investing without any basis.
History tells us that India has been a matriarchal society. Women have managed homes and finances for the smooth functioning of homes. Countless films have eulogised this attribute and you hardly come across a workplace where women aren’t seen or handling tasks that were unthinkable. The women scientists at ISRO, medal winners in wrestling, badminton or boxing, film directors, creative heads and bankers are just a few examples.
The entire self help group (SHG) movement has been driven by women at the lower strata, who have demonstrated to be extremely credit worthy and skilful to manage finances. Today, start-ups and SMEs find women driving business ideas and ventures that have tremendous potential. At the same time it is true that women take career breaks, which often does derail their professional paths. The financial implication of gaps is something women need to focus and address. They need to work towards their financial freedom.
What does financial freedom mean to you?
Does it mean freedom to retire early or live comfortably till your 90s? Does it mean being able to send your kids abroad for education? Does it mean something completely different? The answers would vary from person-to-person. But it is important for every woman to have a roadmap to financial freedom, to help them translate their financial freedom dream into financial performance measures. And, smart women know that financial freedom culminates with financial planning and goal setting.
Start the financial freedom journey with a positive thinking about money and by listing out financial goals that you wish to accomplish. When working on family finances, be involved at every stage. Make sure you understand every detail and its implications. This way you would gain knowledge and know what to do at the time of need. Set timelines for each goal with a corresponding value to the goal.
There are several online resources that can help you set financial goals and also calculate how much you need to save each month and invest to reach the goal comfortably. Be realistic when setting financial goals based on your existing financial circumstances. Factor in potential returns on savings when calculating the needed investments to achieve the goal.
As there are bound to be more than one financial goal, it would augur well to list out all your future financial goals, prioritise them and start saving individually for each one of them. By having a dedicated financial plan for each goal, you will be able to clearly assess the progress made by your investments towards each goal. Changing circumstances in life and finances could also result in change in the goal, which is why it is important to track the progress made by each financial goal.
In all the frenzy towards do not forget the importance of having adequate health insurance at all stages of your life. Financial impact of increasing healthcare costs could derail your best laid financial plans if you fall sick or illness leading to reduced earning potential. Likewise, if you do have financial dependents, do not compromise on their financial future by ignoring sufficient life insurance. Statistics indicate that women live longer than men, so, be prepared to earmark retirement savings that would last long enough.
Grappling with finance can be overwhelming at first, but once you see the brighter side of financial freedom that it would help you achieve; everything will begin to make sense. Make an early start and chances are you will succeed in accomplishing your life’s financial goals and attain financial freedom.
Financial freedom checklist
ü Know where you stand
ü Create a realistic household budget
ü Write down financial goals
ü Invest for each financial goal
ü Create additional income streams
ü Save for your retirement
1. A strategy to reach your financial goals
2. Why invest in equities
3. SIP through volatility
Head Marketing & Communications
PGIM India Mutual Fund