Financial Planning for Women at Different Stages of Life
A few years back, women and financial planning were hardly used in the same sentence. Fast forward to 2021, women are more empowered, financially independent, and aware. They are reaching new heights in many industries while managing their homes and families.
However, some self-reliant women are still not confident when it comes to investments and often consult their fathers or husbands. Investments and savings have entirely different meanings for women. They must assess various factors based on their marital status, job, and age. Let’s see some of the best options for women to invest in.
Married and Working
We can never appreciate those women enough who manage their homes, pursue successful careers, and look after their kids too. However, their financial planning and investment tracking may take a backseat amidst so much on their plate. Even their savings can suffer inevitably. Although most husbands take charge as primary investors of the house, women also need to plan for their retirement, children’s education, marriage, and other financial goals.
It is always recommended for working women to buy a term insurance plan and invest in well-performing mutual funds. Investing in gold is another wise decision. With decent monthly income, banks can approve a personal loan for women to meet instant fund needs, but other saving plans with easy accessibility to cash should never be ignored. Also, diversifying investment portfolios across multiple assets will mitigate risks.
A single mother has to fulfill all the responsibilities of raising and taking care of her children, be it financially or emotionally. Along with saving funds for their education and marriage, these independent women must also plan a secure retirement. This is especially true for women who have become single at a relatively young age due to divorce or a sad tragedy.
If they have received sufficient insurance amount as a beneficiary, then it can help them repay loans, plan education for kids, buy term insurance for themselves, etc. As for the rest of the amount combined with their monthly salary, they can use it as savings through risk-free investments, such as PPF, mutual funds, and NPS.
Divorcees who get regular monthly maintenance may not be able to save a lump sum amount, but SIP will work equally well. Also, it encourages good financial discipline. Although they can apply for a low-interest loan for women, it is better to build an emergency fund to cover at least six months of expenses.
There is no denying that things can be more difficult for homemakers who have no source of monthly income or additional financial support. They try to stretch every penny of their budget and prioritize using the saved amount in the rarest of the rare case. Also, as they earn no income and have no credit history, taking a private personal loan is challenging. Their only philosophy is ‘using money to make money.
Therefore, the best way is to invest in hybrid bank accounts, FDs, and RDs. The post office offers a monthly recurring deposit scheme with an impressive rate of return. Moreover, investing in gold mutual funds or ETFs through SIP is a good option.
Young and Single
If you are in your late 30s or 40s and single, you can’t take risks with your finances. You need to start investing consistently to meet your short and long-term goals. Assess different instruments to find the best option to help you achieve your goals without borrowing money. You can invest in equity mutual funds (EMFs) through SIP to secure your retirement life. Also, purchase a suitable health insurance plan and build a corpus of liquid funds for emergencies.
Traditional instruments have always been the best choice, including debt funds, FDs, Fixed Maturity Plans (FMPs), etc. Try to periodically shift money above a certain threshold in your bank account to FDs or RDs.
The pride and happiness of being financially self-reliant are beyond compare. However, you must be aware of your financial cash flows and focus on securing your future. Don’t wait for the right time because there isn’t any. Plan your retirement and build your wealth to live a satisfactory and secured life.
Shashank Modi is a content marketer who works at KreditBee – one of the India’s leading private loan providers for salaried and self-employed individuals. Shashank writes to empower his readers so they can take control of their finances and live their lives without worrying about money constantly. His ultimate goal is to write a book to teach kids about finance and budgeting.