Women’s Day 2018: Why women require a financial planning road map

It is essential that women take an active interest in their finances and are involved in planning their finances.

All women should have a goal based financial road map in place, regardless of their marital and work status. Usually, women were more involved in managing the day to day finances, and household budgets.


However, in today’s times, women should also play an active role, in setting long-term financial goals such as Children’s education, Retirement, etc., along with the family. When a family sets goals together, all the members feel emotionally invested and responsibly save and invest towards the achievement of the same.
Here are few facts which women should know and draw a financial planning road map for themselves accordingly.


Should take interest in financial matter

Earlier, due to limited exposure to the financial world and fewer chances to learn, the level of women’s financial knowledge historically was lower than that of men. Unsurprisingly, they have traditionally been left out of financial matters. However, women tend to be the most severely affected because of incomplete financial planning. “It is essential that women take an active interest in their finances and are involved in planning their finances. One never knows when a time may come when she has to handle all her financial matters by herself. It is essential that every woman is prepared for such eventualities,” said Adhil Shetty, CEO – BankBazaar.com.

Participate in family’s finances

Amar Pandit, CFA, Founder & Chief Happiness Officer at HappynessFactory.in said that traditionally, women have been less involved in the financial aspects and investment decisions. This has resulted in them having very limited knowledge of the various investment avenues, and the overall financial situation of the family. It is very important for women to be aware of all the investments, documents, loans etc, not only in their name but of the full family. “One of the key ways to drive women in this area would be to encourage them to be a part of the finances of the family and take joint-responsibility towards the achievement of financial goals. When this happens, women themselves will take a keen interest in understanding various financial instruments that are available, and suitable to invest in,” he added.

Improve financial literacy

It is usually the lack of knowledge, which leads to many women to taking a backseat when it comes to finances. They are reluctant to even learn more about financial products, as they often rely on men to take the lead in this area. The only way to increase the knowledge of financial products among women is by Spreading Financial Literacy.

“One can read books, magazines, newspapers, online content etc., to get a basic understanding of finance and to stay updated with the latest developments. Further, a financial advisor plays a key role in this area. It is very important to choose a good, qualified advisor, who will help you improve your knowledge, explain the financial products that are suitable for you, and make your financial literacy, a priority,” said Pandit.

Should be prepared for emergency breaks

One should ideally save money in a bank account for around 3 to 6 month of one’s monthly expenses. A spouse should equally contribute to maintaining this. Shetty feels women need to maintain an emergency fund for the same reason as anyone else. Emergencies do not come with an appointment, and one should always be prepared to handle them. So, having spare cash at hand for any emergency is a must. “If you do not have such a cache already, you should start working on one,” he added.

Prepare for post-retirement

Women generally needs to be more cautious during their retirement time as they are likely to have a longer lifespan as compared to men. Therefore, during that stage, they also need to remain financially healthy. Adhil Shetty, CEO – BankBazaar.com told Moneycontrol that a Global Burden of Disease Study 2013 published in 2014 in The Lancet puts the average life expectancy at birth for Indian men at 64.2 years and women at 68.5 years (between 1990 and 2013). Globally, the average life expectancy at birth was 68 years and 4 months for males and 72 years and 8 months for females over the period 2010–2015 according to United Nations World Population Prospects 2015 Revision. “So, it is more likely that women may face financial hardship in their old age as they typically tend to live longer and earn less than men,” he said.

 

Happy Investing

Source:Valueresearchonline.com