With rising income as well as higher life expectancy, modern-day women also need financial planning like their male counterparts. More because they face different challenges compared to men, and those challenges can have financial consequences which need to be addressed in a proper way.
Here we are taking a look at some of the compelling reasons why women need to go for financial planning:
1. Increasing number of working women: An increasing number of woman are joining the workforce and this is true in both urban as well as rural India. The National Statistical Organization of the Ministry of Statistics and Programme Implementation, Government of India, has confirmed the same in its 2012 report. So, as more and more women join the workforce, their income rises and managing the same on their own becomes important.
2. Inheritance: Women have started to inherit properties as well even after they are married, according to the changes in the Hindu Succession Act and the Indian Succession Act. “The gender inequality is slowly becoming a thing of the past, at least as far as the succession norms are concerned. Women also inherit their parent’s and husband’s insurance, wealth, investments, business, etc. which needs to be managed effectively thereon,” says Ashish Kapur, CEO, Invest Shoppe.
You may also watch:
3. Divorce and Alimony: The ever-increasing divorce rates in India is alarming and managing one’s finances, alimony, income, children single handedly is quite a handful. The percentage of women who are single parents is rising sharply. National statistics still do not exist with divorce rates in India, but it is rising at an alarming rate. “Emotional outrage is natural with every divorce, but as long as you have always had control on your finances, courtesy financial planning, you would not stress over financial concerns, especially with the maintenance, your job and investments and alimony is concerned and can concentrate on bigger issues,” says Kapur.
4. Higher Life Expectancy: Worldwide, the average life expectancy of men is 68.5 years and that of women is 73.5 years and statistically in marriages, women are younger to men by about 3-5 years. Thus, on an average each woman outlives a man by about 8-10 years. This means, that almost every other woman will have to manage her life (read expenses and finances) for at least 10 years on her own. It is for this reason that it is very important for them to know their husband’s retirement plans and details of other investments and savings.
5. Career Break: Women sometimes choose to take a break in their career for family or children. “If finances are properly managed in a systematic manner, then this break does not leave most women feeling helpless and without income,” says Kapur.
6. Shopping: Women love to travel, spend and shop and here comes a bigger need for financial planning so that the money is well utilized and invested diligently and finance is never a hindrance to one’s dreams and wishes.
7. Family Welfare: Women tend to be better at saving money for the welfare of the family. Financial planning of the family expenses is usually best done by women. They possess a natural instinct to work for the betterment of the children as well as their family.
You may also watch:
In changing times women are at par with men in all economic activities. Hence, the rules of investing apply equally to them. The broad rules to be kept in mind are:
* Start early – An early start gives you a manifold advantage in building your capital before you get old.
* Planning – In case you don’t have the temperament and the knowledge, take the help of a qualified and reliable financial planner.
* Tracking – Keep monitoring and discussing your investments with your financial advisor.
* Equities are one of the best investment options for beating inflation — Keep your idle money invested in equities. Though markets can be volatile in the near term, but on a long-term basis, they are the best bet to generate returns higher than inflation. However, do remember that equities need more research and monitoring than most other investment options.
* Don’t invest in gold – Instead of buying gold jewellery, start investing your money in gold funds and gold Exchange Traded Funds (ETFs). They are more cost effective because there are no wastage charges, no making charges, and no security issues. If you invest in gold funds and gold ETFs, you can simply sell them at market value when you need to buy jewellery.