It’s your finances, take control
ONE GOAL THAT IS COMMON TO ALL WOMEN, IRRESPECTIVE OF
AGE AND STATUS IN LIFE, IS RETIREMENT
Spend
time to get your finances in line with your aspirations
Financial planners are unanimous in
saying that when it comes to making investment decisions, women rarely take an
initiative. There is a sense of being overwhelmed by numbers and statistics
which, say planners, women find difficult to digest. But social dynamics are
slowly changing. More women are earning independently from an early age and, at
the same time, getting married later than sooner. Then why not invest money
independently?
A study commissioned by DSP
BlackRock Investment Managers Pvt Ltd and conducted by global research agency
Nielsen across 14 cities in India in July 2013, found that only 23% of working
women make their own investment decisions. The figure for single working women
is even lower at 18%.
Making investment decisions is
linked to financial planning. It is a simple exercise about allocating
resources to achieve future goals.
THE PLANNING PROCESS
Planning has to be done
around an objective.
The objective could be an important
one like your 13-yearold child’s college education or it could be your desire
to travel around the world. For single earning women without any children, the
objectives could be linked to buying a car or a house or taking care of elderly
parents. For an earning married woman whose spouse is also earning, it could be
all these and the need to plan for a child.
But t he one goal that is common to
all women, irrespective of age and status in life, is retirement.
Many women make their retirement
their spouse’s responsibility. That’s not the best thing to do. According to
Nisreen Mamaji, founder, Moneyworks Financial Advisors, a Mumbai-based
financial planning firm, “While working women do give some thought to
retirement, nonworking mar ried women almost never plan for their retirement.
But it is important for them to at least be aware and involved in the
retirement planning investments because in the eventuality of the husband not
being there, she will have to manage her family and finances single-handedly.”
Once your objectives and the context
to your financial planning has been set, you can then decide the products
through which you can achieve these goals. This could be an appropriate mix of
various products such as fixed deposits, provident fund, equity and debt mutual
funds, among other things.
CATER FOR CONTINGENCIES
Other than investing to meet
financial goals, you must think of contingencies.
A loss of life can be covered
through insurance. If you are a single working woman without any dependants,
this may not be your primary concern.
However, if you are single and have
a loan running, there is merit in being insured, at least enough to cover the
loan amount so that the liability doesn’t fall on your kin.
Married, and children, make
financial dependency really gain pace. “If both partners are working, insuring
the loss of income in the unforeseen event of death for both is important,”
said Mamaji.
The other emergency that may take
place is health related. These are also hard to predict and can get exaggerated
if there are unforeseen occurrences such as accidents.
In a study, ICICI Lombard found that
premium contribution by women towards health insurance increased by 38% in
2012-13 from 2011-12. Women even have the option of taking on medical insurance
that has
maternity benefits.
WHAT SHOULD YOU
DO?
Financial independence for women can’t just be about earning their own
money, but also about how they manage it and secure their and their family’s
future, said Aditi Kothari, executive vice- president, DSP BlackRock Investment
Managers. “Today, more women are earning independently but divorce rates are
also increasing. Moreover, women tend to outlive men. There are good options
for investments but many women don’t know what to do,” she said.
The foremost step towards financial
planning is to become aware, which means understanding how you can make your
money work efficiently for you over a number of years. The objective could be
to ensure your family’s financial security, your retirement or even just your
travel dreams, but the approach has to be to embrace a planned personal
financial management and goal-based investing.
A part of being aware is to get the
details right. Ensure that you name dependants as the nominees in these
investments and insurance policies. Also, it is a good idea to work on a will
when you know who you want to be the beneficiary of your investments. Even if
you have no dependants, it may be wise to draw up a will so that your family
does not have to bear the burden of any liability.
Financial control is the biggest
tool in your hand. Use it, and use it well.
Lisa Pallavi HT140322
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