Our mission is to develop a community of NRI’s who wish to make wise financial decisions.
Investing in Debt & Equity Markets, Mutual funds, PMS, Real Estate, Insurances, Managing Indian Compliances, Taxation, Succession Planning & WILL etc. are few of the Subjects that this blog aims to cover and educate on.
Have you ever wondered how some homemakers can manage an entire household, even on a shoestring budget?
It is their inborn budgeting and money-management skills that make it possible.
“Budgeting” is the “one” relationship that women have shared with money for ages, but sadly it has never evolved beyond that. Today, women have made remarkable strides in every walk of life; however, they still shy away from taking charge of their finances.
Women find money matters complex and rely on external investing advice without evaluating the options themselves. Even if they invest, they are highly conservative in their approach and miss out on many potential benefits that a holistic financial plan offers.
You need to understand that you aren’t genuinely empowered unless you have achieved financial autonomy. Farnoosh Torabi, American journalist and Finance expert, rightly said, “Nobody cares more about your money than you.”
Why is financial planning so important for women?
- Freedom to make financial decisions: Unless you take the reins of your future, someone else will. Well-planned finances will bring certainty and confidence, which will help you to make better decisions.
- Higher education: These are evolving times you need to upskill yourself and go for higher education continuously. You can plan your finances to have enough corpus to fund your professional courses.
- Purchase of house and assets: Owing a house is one of the most significant indications of financial security, but it is a considerable investment that is not possible without proper financial planning.
- Choices in work-life Balance: A woman plays multiple roles, and motherhood is one of them. After the kids come in, the Financial security will give a choice to the woman to maintain work-life balance at her convenience.
Why do women need a different financial plan at every stage of their lives?
Their financial needs vary according to her life stages, and so does her investment planning. The needs of a teenager will be different from a married woman, and similarly, the needs of a single mother will be different from that of a newly married woman. Hence, the ideal financial plan should address the specific needs of the women according to the stages.
However, there is one thing that is common for every woman. The sooner she starts investing, the better the results.
“It’s not how much you make, but how much you save and invest “
Financial plan by life stages
Teenage (16+):
At this stage, you are primarily earning through tuitions or other part-time gigs.
Just because you have started earning doesn’t mean spending impulsively by buying the latest gadgets, outfits, or accessories. This is the age when you must realize the value of your earnings and savings.
This is the time when you are making the foundations of your future self. You align your studies, and knowledge towards the carrier choices you want to explore. this is time you should start laying the foundation of financial knowledge too. At this age start investing, so that you get in habit of saving and by the time you reach your twenties you will be ready with investment discipline and the corpus you’ll accumulate will help you understand how small savings can become substantial if invested right and kept for a longer period.
Investment Objective: Teenage is the best time when you can start saving and investing for your higher education.
Teenage is the best time when you can start saving and investing so that you start understanding the value of discipline investments and saving for your future self.
Investment Options: You can start investing a minimal amount in mutual funds through the SIP mode. Other investment options include fixed deposits, recurring deposits, etc.
Young and single at 20
This is the time when you have just finished your studies and started earning. You don’t have enough expenses savings, and you are excited to explore new things professionally. Your risk appetite is high, but that’s where you need to tread cautiously.
By this time you have understood how the disciplined investment approach leads to creating a good corpus by investing small amounts too.. Now is the time to increase your knowledge in investments and to identify various products and their utilities. Also, this is the time when you should start linking your investments to various goals/investment objectives however small or big they can be.
Investment Objective: At this stage, you need to focus on goals like upskilling, your share of savings for your marriage expenses, travel plans, retirement planning and any other goal which you feel important about.
Investment Options: Start with building a habit of saving. At this age, it’s easy to get carried away with the new things, but you need to curb excessive sending habits. You can look at pure equity mutual funds, and health insurance plans and build a corpus of liquid funds for investments. Avoid taking too many loans and saddling yourself with debt at this point.
You have already built a habit of savings, and now is the time to understand which product will suit your investment objective. . At this age, it’s easy to get carried away with the new things, but you need to curb excessive spending habits.
You can look at pure equity mutual funds, Debt Mutual Funds, and health insurance plans and build a corpus of contingency funds. Take a Term plan at this age as it’ll be cheaper. Avoid taking too many loans and saddling yourself with debt at this point
Married and Working 20-40
As a married and working woman, you have financial support from your spouse. You may start spending too much to give them a good lifestyle when you raise your kids, but you need to check your expenditure.
This is the time when you start creating a common family investment goal and start investing for the same. You can also seek the help of a qualified financial professional to assist you both in this journey. The professional will assist you in guiding on making the right choices and will also ensure that you do not deviate from the identified financial road map.
Investment Objective: Between the phase of 20-40, your investment objective includes retirement, a medical budget, children’s education & marriage, and buying a house. Avoid taking too many loans during the first decade, i.e., between 20-30. After this stage, you can go for housing and a car but stay away from a personal loan by all means.
Create your Common Family Investments objectives which include retirement, a medical budget, children’s education & marriage, plan for buying a house, and other important goals. Avoid taking too many loans during the first decade, i.e., between 20-30. After this stage, you can go for housing and a car but stay away from a personal loan by all means.
Investment Options: First identify your risk appetite and return expectation for goal achievement; accordingly you can choose the investment products. Equity mutual funds, Debt Funds, gold funds, NPS, and PPF are among a few of the suitable options for 20-30 year-olds. You should also health insurance plans and build contingency funds via liquid funds. Take a Term plan at this age as it’ll be cheaper.
As a homemaker
In most cases, homemakers do not have a fixed source of income of their own, so they have to do the financial planning around the household income.
However, you should get involved in creating a common family investment goal and ensure that you all start investing for the same. You can also seek the help of a qualified financial professional to assist you both in this journey.
You should take time out of your busy house management schedule and help your partner by understanding the family’s financial roadmap and keeping a track of the same.
Investment Objective: As a homemaker, the investment objectives include planning for children’s education and marriage, purchasing a house, and building an emergency fund.
Between the phase of 20-40, your investment objective includes retirement, a medical budget, children’s education & marriage, and buying a house. Avoid taking too many loans during the first decade, i.e., between 20-30. After this stage, you can go for housing and a car but stay away from a personal loan by all means.
Investment Options: The financial planning needs to be a blend of traditional instruments and low-risk market-related options. Some of the prominent places for savings are recurring deposits, fixed deposits, or hybrid bank accounts which are a mix of savings and fixed deposit accounts. It is also advisable to invest in balanced mutual funds through a Systematic Investment Plan (SIP). One of the other low-risk options is Gold ETF.
First, identify your risk appetite and return expectation for goal achievement; accordingly, you can choose the investment products. Equity mutual funds, Debt Funds, gold funds, NPS, and PPF are among a few of the suitable options for 20-30 year-olds. You should also health insurance plans and build contingency funds via liquid funds. Take a Term plan at this age as it’ll be cheaper.
As a single parent
As a single parent, the responsibility of your children is solely yours. You may not have financial support from your spouse, so it’s better if you have multiple sources of income. So it’s better to be equipped with financial knowledge. A Right Financial advisor can be of great support for you in this phase.
Investment Objective: The major investment objectives at this stage are primarily kids’ education, house purchase, emergency fund, retirement and meeting of daily expenses.
Investment Options: You need to have a cautious approach at this stage. You could go for hybrid bank accounts, recurring deposits, fixed deposits, and other low-risk options. A medical cover for you and your kids would be an added advantage. Avoid taking excessive loans, especially a personal loans.
You need to have a cautious approach at this stage. You could go for a Moderate risk profile product mix, at the initial stage, along with that it is imperative to ensure that the risk/cover products are optimized to your requirements, which will cover for any unforeseen circumstances.
Pro Tips
If you aren’t too confident about managing your finances on your own, start educating yourself about the various financial instruments and their features.
Professional help should be taken to ensure, no pitfalls in your journey.
Use technology for tracking expenses, budgeting, and investing. It saves time and teaches discipline.
Do not shy away from taking exposure in equity investing. The daily market fluctuations do not impact its long-term performance if invested through the right strategy and product.
Conclusion
As a woman, it’s natural to always focus on their family’s financial goals, but remember that you also need to plan for your financial security as an individual. Therefore, work towards a diversified portfolio and review it every month to check if your portfolio performance aligns with your goals
"A Good Action Plan Will Make All
The Difference"
HOW MUCH DO YOU WANT TO GROW YOUR INVESTMENTS?
10 TIMES OR 3 TIMES..?
