During the Past 8 years of my career as Financial Advisor, we have rarely been approached by Women for Financial Planning.
Women tend to leave their Financial Planning to their Husband/Father, and most of the times there is a huge mismatch between the Actual Need and Action Taken.
Thankfully, in the past 1 year we have been noticing a shift in this attitude and many Working Women have approached us for Financial Planning and they have been getting Good Results and have discovered a new found confidence in them.
This Blog is inspired by Women who have started taking their Financial Planning in own hands and dedicated to those who are waiting in the wings to do so.
There are some special challenges and hassles that women need to face in their life, and especially when it is about securing their finances.
Many women seem comfortable leaving their long-term finances and retirement planning to their Husband/Father.
If in the past they’ve taken a backseat to their husband in terms of family’s finances, it’s time for them to get in the driver’s seat.
While nearly 100 per cent of women are Confident about managing their day to day household finances, but many don’t feel confident in investing or protecting their income or assets on their own.
Women need to be financially equipped on their own because of:
Change in Working Patterns: Men work uninterruptedly throughout their lives, women often need to take breaks ( Change in location after Marriage, Pregnancy, Children)
We have the much debated case of Mrs. Sudha Murthy- Wife of Mr. Narayana Murthy, Founder of Infosys. The couple was instrumental in building the Infosys dream. As the business started taking shape, the couple decided that one person was required to take care of their home and family.Mrs. Murthy gladly stepped aside to be the homemaker and let her husband fulfill his dream.
Longer Life Expectancy:The life expectancy for women is higher than men. So, the amount of retirement savings for women should also be higher. Statistics show that, on an average, women live 5 years longer than men, earn 25 percent less during their life time and work 11 years less in their careers.
Divorce and Relationship Breakdowns: Believe or not this is the hardest truth that anyone may face. Moreover, this not only affects one emotionally, but even has an adverse effect on one’s finances. Divorce and relationship breakdowns have more impact on a woman’s life compared to a man.
Financial planning for women provides a better and in depth understanding of the situations that can create a negative impact on the finances. This also helps them to consider different ways that can assist them in reaching their financial potential in future.
How can Financial Planning be done?
Let me add here, its not a ROCKET SCIENCE….anybody yes anybody can do their own personal Financial Planning.
- Plan separately from your Spouse: It is important that women have a separate personal finance plan from her family, be her parents or her husband. With changing times the need for separate finances has increased. If a woman handles her own finances she is well prepared to handle money matters individually if the need arises. Knowledge of different investment avenues, savings and expenses is important to run a family.
- Budgeting and Savings: Living on a budget is the best way to make sure that you are living within or below your means and we all know women can do a better budgeting than men. Budgeting begins with savings. Set a savings goal of lets say 5% to 15% of income per month, then one can plan spending around the balance. Spend less than you earn – it’s the secret to creating wealth.
- Build an Emergency Fund: Do not touch it unless it is a real emergency. This is a savings or money market account that is easily accessible and holds three to six months of expenses.
- Start investing with very small amounts of money: Don’t let the fear of losing money, fear of failure, or fear of the unknown stop you from investing. Train your money to go forth and multiply.
- Time your Investments: Giving time to your investments is important specially when there are specified goals to be met like Children’s education, marriage and self retirement.
- Demarcate clear boundaries: It’s important to do so with your spouse for routine expenses. It will be easier to determine personal monthly expenses and hence monthly savings.
- Track your savings and investments regularly: Do not follow the rule of set it and forget it. Review them on a half yearly or yearly basis.
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It does not matter on what stage of your life you are in or whether you are Single or Married, Financial Planning should be your Priority!!
Gurleen Kaur is a Financial Consultant and devotes her time to her company www.hareepatti.com. She has completed her Bachelors in Finance and Investment Analysis (BFIA) from College of Business Studies(CBS, Delhi) and MBA from IMT, Ghaziabad. Currently she is also pursuing her studies in to become a Certified Financial Planner.
She can be contacted at gurleen@hareepatti.com
Some of the Images have been sourced from www,google.com
Anamika Joshi
Some great points have been mentioned Gurleen ji. Very nice and its really going to inspire women out there to start understanding the significance of financial planning. I do try to inculcate few of the points above in my planning.. but mostly fail to do so. The emergency money that I set aside get consumed as soon as I am left with no money from my primary account. That’s when I feel that I have no sense of planning my finances.
Very informative post. I guess you should write often and share your experiences. 🙂
Gurleen Kaur
Thanks Anamika for acknowledging :)…..Financial Planning is an art in itself . As also mentioned in the post , it is not a Rocket Science….its very very EASY. Just that It needs Discipline and Systematic approach to be followed. Definitely, I will try to share more:)
Anamika Joshi
🙂 You just mentioned what is lacking in my case – ‘discipline’ I guess.. But more than discipline I have this fear of knowing how much money is left.. I know it sounds silly.. but literally I don’t regularly count money left till it becomes too crucial.. This fear of revealing to myself the balance left stops me from managing it. I don’t know if you have ever come across a fear like this.. 🙂 🙁
asha chaudhry
bravo gurleen!
very relevant post – keep them coming!
🙂
Gurleen Kaur
Valid point Anamika….I come across so many people who dont do budgeting just because of the fear of knowing. Few years back even I was scared of doing it for myself as I didnt want to know which side my boat was bent- Income or Expenditure and I was hardly able to save anything…..Once I started with it, it was easy for me to focus on savings and investment part as well.
Gurleen Kaur
Thanks Asha Jee:)))
Manav Shankar
Wonderful
Niti Chawla
Wow !!!
A very worthful information shared by Ms Gurleen Kaur. Appreciated…
We are always advised to take care of our finances and not spend more than we can earn.
In India, the interest rate savings bank account is fixed by the RBI for all banks ( 4.0 %)
When I was a kid, I used to like the banks because I thought they took care of our money and paid us extra money as interest too.
But as you would have guessed, things aren’t that rosy.
Then, Inflation comes into the picture.
It is the ‘common man’ like you and me, who are affected by the inflation.
As we can see the below chart, how useful Financing Planning in our life.
Instrument
Rate
Inflation Rate
Actual Returns
Savings bank Account
4.0%
7.5%
-3.5%
Fixed Deposit
8%
7.5%
-0.5%
Fixed Deposit
9.5%
7.5%
2 %
PPF
8.80%
7.5%
1.30%
Mutual Fund
13%
7.5%
5.5%
Investing is not optional. It is not a choice between growing or staying in the same place. It is a choice between staying in the same place or going down!
That’s only possible by the “ Financial Planner ”
Well done Gurleen !!! You are doing a wonderful job for all…
Namrata Mahalingam
This is absolutely the kind of information meant for lazy beings like me who lack discipline. I am broke the moment it’s 10th of each month. It’s high time I save for my own needs so that I depend least on my partner!
Very informative post! Thank you 🙂
Gurleen Kaur
Thanks Niti for sharing such useful data 🙂
Gurleen Kaur
I am glad Namrata if I am able to change even a single woman’s attitude towards Financial Planning !!