Our society has outgrown the stereotyping against financially independent women. Akin to the west, India too broke new ground and women are widely accepted as breadwinners.
Reading about female leaders and entrepreneurs as role models is quite inspiring but we seldom emphasise the need to educate women of our own family about how budgeting, investments and other financial tools work.
Arunima a homemaker, has no idea about how her life partner is paying off loans and what kind of an insurance policy he has chosen. Sneha was too busy raising her kids and taking care of household chores that she paid no attention to how her husband ran his business along with his partner until one day her husband got severely ill and she had to handle things without his support. Krutika,an independent single woman lives a lavish life, forget about other things, she has no idea about her salary break up !
In the words of famous author Otegha Uwagba- “Being financially literate is a powerful thing, especially for women.”
Irrespective of who you are, your background, age, education level, working or a homemaker, be passionate enough to understand a few basics of financial planning. Men should push the envelope and inspire women to know how money matters work, unrevealing the secret of running a house or workplace.
Let’s understand what exactly financial planning covers:
1.Spend wisely, thrive to save more-Diamonds are forever and so are your investments.Say No to frivolous spending. Do not spend before receiving actual income. Money is a crucial source to save you from all kinds of uncertainties. Save a part of your income regularly and invest it wisely. Watch your cash flows like a hawk.
2.Make a budget-Make a detailed budget keeping in mind the income, expenses and other obligations round the corner. Provide for any future debt/loan obligations. Luxury should not in any case come before necessities. Update your budget from time to time giving effect to changes in its variable components.
3.Invest strategically: The saved money should not be kept idle in the bank accounts. Use it to earn income or create some wealth. Depending upon your risk appetite, invest in simple Bank FDs or Post office savings schemes. Opt for Mutual Fund investments as they offer handsome returns with balanced amounts of risk over a period of time. Go for one-on-one consultation if you don’t have any first hand experience.
4. Understand Taxation: Understand the applicable tax slabs and how tax benefits can be availed of under different sections of the Income Tax Act, like PPF, Insurance, Housing loan etc. You can avoid paying tax unnecessarily when certain exemptions are allowed by the government especially deductions under section 80. Understand the basic impact of the Union Budget on your family’s monetary management.
5. Provision for an Emergency fund: Traditionally women used to depend upon their gold ornaments when unprecedented events took place. In today’s world it just needs us to be more prepared. Set aside a certain sum of money in case any contingency occurs so that you don’t have to end up breaking your investments.
6. Need to have an Insurance: Know how various insurance plans work. The amount of yearly premium and the cost covered in case of hospitalization or death. Where the man of the house is responsible to take an insurance cover, he should make the women in his immediate family i.e.wife, mother, or sister aware about it. The female nominee should get to know the exact details.
7. Debt/loan woes: Learn about the terms of loan, its duration, rate of interest etc. and related matters while buying a vehicle or a property. Long term financial obligations always affect our spending.
Registering a property in the name of a woman will save on stamp duties to a greater extent.The loan in the name of a woman has a higher chance of approval.The home loan interest deals are great for women as the banks offer loans at a reduced rate to women. The Pradhan Mantri Awas Yojna offers a credit subsidy if a woman is co-owner.
Furthermore, a wife has a right over spousal property if she is a joint owner in case of a divorce.
8. Retirement plans: Earning women should contribute towards some retirement schemes. Make provision for later years of your life and also towards care of your health as you grow old.
If you are already vigilant enough and doing monetary planning then kudos to you but if not, then now is the time. Start small but start for sure. Remember, non-earning women have the right to know about every aspect of their family’s finances. Earning women,joint planning with your partner doesn’t replace individual financial planning !!
Women are usually conscious about their appearance. Surprisingly enough-not many of them, whether earning or not, do have almost zero to a very little knowledge of money management. Either women are too busy due to their multitasking nature or they think it’s a man’s job.
Miracles will happen when femininity and finance will join hands. Monitoring finance and investments is not at all a ‘gender specific job’, it’s high time that we lift the taboo and redefine the roles!
This article is written by Rupal Vasavada, a financial blogger. She is passionate about writing articles on topics on finance.
Bhoi Smrutirekha Dharanidhar
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