Indeed a woman’s essence lies in her innate ability to care love and sacrifice. She plays an all-enveloping character of a mother, daughter, wife, and friend. However; when it comes to financial matters she seeks help and turns to the men in her life. The array of information available at the click of a mouse fails to instill confidence in her. To empower the women of today and enable her to make sound financial decisions all by herself here are a few essential tips:
Direct Yourself Create a timeline driven comprehensive wish list of all the possessions you desire, these are your goals. The list could be ranging from a piece of designer attire or jewelry, buying a home, car, or creating education or marriage corpus. Do a little market research and add a price tag to each item on the list. Set the order
Prioritize Your List In Order Of Importance. Provide For A Rainy Day
Don’t forget emergencies. An emergency can be a temporary loss of job, accident or illness. Be ready for pleasant surprises like weddings or birthdays in the family. Set aside money equivalent to about 3-6 months expenses and invest money timely.Guard your wealth
Unforeseen events like accidents and illness will drain off your savings and upset your financial plan. Insure yourself with medical and accident policies and general insurance of your assets like a home, car with fire & burglary policy. Fund yourself first
Decide how much you need to invest every month or year to reach your goals. To ascertain the investments take professional help.Start saving for each goal
The amount of savings will determine the investment options. The various options available are Post Office Small Saving Schemes, Fixed Deposits, Mutual Funds, Public Provident Fund etc. Earmark each investment for the specific goal. Revise your portfolio regularly. Be updated with the changes in the financial market like interest rates, tax slab also changes in your own priorities makes it imperative to re-look at your investments regularly. Go confidently in the direction of your dreams! Live the life you have imagined! The author is a Mumbai based Certified Financial Planner (CFP).
It’s Time To Wake Up
Predominantly, most women have left financial decisions and investments to the men in their lives. So, single women allow their fathers to plan for their investments and file their returns while married women depend either on husband or father in law to handle financial matters. As they grow older many depend on their sons to take care of their finances.
Statistics show that most women over the age of 65 years outlive their husbands. Many will not have their husbands around to take care of their financial requirements. Today the number of divorces is increasing. Women who are financially not stable will have to depend heavily on alimony and relatives and may even lose custody of their children.
While the art of managing household finances and saving pre-dominantly is better handled by the fairer sex, they are either not confident enough or not ready to take up the responsibility that goes with it. They have an aptitude to think before taking impulsive decisions and are known to be more careful in their approach towards life in general.
These qualities can well be groomed into making strong financial decisions for themselves and their loved ones. The only prerequisite is a keen interest in their finances, understanding the tax implications on their income and evaluating the various avenues for investments that are available. Hence, financial planning is gaining importance for women also.
The number of women working in urban cities with an attractive salary package is increasing at a phenomenal pace. They are getting more competitive in their jobs and are considering a career before family in many cases. Many women are daring to start their own business ventures to pursue their ambition. They have more money in their pockets than ever before. The need of the hour is to be able to take control of their finances and investments. They could take assistance from reputed financial services firms to help them chalk out an action plan to achieve their financial and personal goals. Hence, financial planning is gaining importance for women also.
Educating themselves on various aspects of investing is critical to be able to take an informed decision. They can sharpen their financial IQ by reading business newspapers and magazines, watching business channels and surfing finance related websites. This will help them get acquainted with the financial markets; understand basic investment products, related international and local market conditions that can affect the performance of their investments.
There are various investment avenues that women can look at for investing their money. Predominantly women have been known to be risk-averse. Although they believe in saving for a rainy day, they might not be smart in taking investment decisions. In the past, women have been more comfortable with savings in bank accounts, storing money in lockers, or buying gold or buying bonds.
Now more women are open to the idea of investing in broader investment avenues. They are considering investment in direct equity and mutual funds in a big way. Buying property is another attractive investment option for women today. They are getting more comfortable with the internet, hence online trading and net banking accounts is an easy facilitator to plan their investments in this face-paced world.
The tax structure also favors women to a larger extent. Net Income of women up to Rs 1,80,000 for the financial year 2008-09 will not be taxed. This is over and above the other deductions available. They can look at optimizing their income by investing up to Rs 1,00,000 under Section 80 C in Life insurance schemes, NSC certificates, equity-linked saving schemes or by repaying principal of their home loan.
Women can also look at taking joint loans with their husbands. This will give them tax benefits of interest deduction up to Rs 1,50,000 per annum along with the option of buying a bigger house in a convenient location. Mediclaim can also be taken as a deduction of up to Rs 15,000 per year for a premium paid for family members.
Women should be careful while planning their finances. They should be in full control of the situation at any given time. There are certain financial mistakes that they need to be aware of:
Once these issues are kept in mind, it is easier to sail through life. Money today is an important key to happiness; hence women should plan their finances and investments well. It is important to also regularly review all investment decisions from time to time to ensure that they are in line with the overall financial objectives, time horizon, and risk appetite. So, ladies, it’s time to wake up and smell the coffee. Take control of your finances and have a great life ahead!