We were visiting a friend’s place a couple of days ago to seek blessings of Lord Ganesh installed in their home. Once the Aarti was done, we retired to the living room to catch up over coffee and modak.
“Nishit made them, so do divert all your compliments to him,” my friend proudly announced. I marveled at the culinary skills of her husband and helped myself to the yummy sweet.
As we chatted on, “the men” got talking about the price of real estate in Mumbai, stock market prices and so on.
“I hate talking financial stuff,” remarked Aditi. “I take care of my credit card bills, rent, shopping… but building my investment portfolio is what I’d rather leave with Nishit or my CA. I don’t understand the equity markets so my money is safe in fixed deposits and recurring accounts. I don’t even have a demat account!!”
To say I was shocked, is an understatement. Aditi owned her own business; she had a degree in business management and was known within her peers for her sharp business sense. Why was she shy of managing her own finances or planning them well? But sadly, she is not the only one.
Increasingly, we find women focused on furthering career goals and achieving financial goals that they set out for themselves. And yet we find the independent, ambitious, financially (more-than!) secure women of today nonplussed when it comes to managing their own finances. More often than not, have I been part of conversations with women (single or otherwise), that revolve around: “my dad / brother does my investments; I don’t really delve into it as long as the returns are fine”; “Well, I am single so why would I need insurance or protection… who needs the money after I am gone!”
So while we have our women climbing the corporate ladder or turning around start-ups, we have a good number dealing with financial stress… not necessarily stemming from “lack of finances” but quite often from “managing finances” to ensure that they are invested not only for today but for their futures – allowing them to enjoy the same (or even better) lifestyle – independently.
I believe, women – married or single – must take on “Single” mindset when planning their finances. Of course, taking assistance from experts / advisers / family is fair… but decision making should be yours, to help you tide over all phases of life. The objective is to be independent holistically… be accountable for your financial risks and gloat happily over your returns (and sometimes quietly regret as well!!).
Let’s then quickly get to some effective (and doable) tips to manage finances to help you ease your stress!
1) Define your financial goals!!
I sincerely believe that what is not clearly defined, does not get achieved. You must know what you want out of life to set out to achieve it. Clearly write down your financial goals with milestones… a car by the age of 27 or a home by the age of 35 or an international trip every year or 1crore in the bank!! It can be anything but it has to be defined.
2) Start saving early… and frequently
Your retirement age seems far away, right? But you cannot procrastinate on planning for it! You ideally, should start saving as soon as you begin earning – even if it is a small amount.
3) Be financially aware and diversify your risks
Be educated on basics of finance – investment options available, risk versus returns… Consult experts on the subject, speak to financial adviser and take your own financial decisions to gain confidence. It is okay to be conservative in investing money but then that will yield reasonable returns and not a windfall! The idea is to KNOW that and make informed choices. Invest in a balanced manner, take calculated risks so that your financial portfolio looks healthy – insurance, mutual funds, equity… even real estate and gold if that interests you.
4) Review, rethink and reinvest
You have set out your financial goals and the milestones… but then money does not grow on its own. Business dynamics change, your earnings change and the economy changes. So review your investments time and again – do you need to make any changes, may be take a little more / less risk; is the insurance cover that you have sufficient; are you still invested in stocks that are tanking; is there risk missing in your portfolio or even protection for that matter. It is good to check periodically and make corrections – your money needs your attention!
5) Think about yourself
I am not kidding! You need to look after your retirement funds, your basic requirements before looking after the needs of your friends and family. It is essential that pull your own financial liabilities first before extending a helping hand to others (including parents and kids); simply because they would expect you to do so too!
6) Think Health Care
It is a statistical fact that women live longer. So, it goes without saying that their health care needs will be higher… and financial planning for the same will be needed as well.
Of course, there is one more option (if you are a fatalist!! I definitely am not…!!).
“Leave things to chance and hope that it will all work out well in the end”!!!
Yes, I was kidding there…