With increasing exposure and integration with the world, the role women play in our society is undergoing rapid transition. We are increasingly seeing the advent of women managing superhuman feats of juggling two seemingly full time occupations of managing the home as well as managing their careers and aspirations.
However women are some distance away from total financial independence. Put across simply financial independence is a combination of earning and managing what you have earned. Surely women are exercising their rights to choose education, profession and remuneration. However when it comes to the second part i.e. managing earnings, women have some distance to cover.
Women whether earning or otherwise are probably far more disciplined than men, when it comes to their money. Yes, even if they have multiple pairs of shoes it is never at the cost of family well being, their expensive dresses come after FAMILY.
Propensity to save is higher amongst women; there are many husbands who are amazed by unexpected items suddenly appearing in their lives when the wife hasn’t asked for a raise in her allowance, this is due to the twin aspects of managing resources and the art of starting small and accumulating a larger sum over a period of time, a trait slightly less abundant amongst men.
Women have a keener sense of identifying and managing risk well. We could just observe how deeply mothers, sisters and wives inspect every item we eat, take precautionary measures like cleaning and cooking properly, to deliver the best meals in the world.
However certain important aspects need greater attention namely, awareness of available financial resources. This question becomes important when it comes to inheritance related issues or the increasing rates of divorces or people choosing to stay single.
In the truest sense of Sahadharmini, meaning ‘one who participated with equal right, in upholding Dharma’, women should ensure that money earned is put to the best possible use with awareness, participation and consent of all parties concerned including themselves. We believe that financial planning is the best possible tool available to uphold the aforesaid principle.
Financial planning as an activity is as tough or easy as cooking is and the steps involved are similar too:
Step 1: Planning the menu
As is the case with cooking for the day, where you first plan for the menu, similarly also in financial planning one should plan the objectives.
Step 2: Do you have enough of the right ingredients
Once you have planned the menu, one check whether the right ingredients in the right quantity are available or not, similarly in financial planning one needs to check whether you have adequate resources available to meet your goals
Step 3: Knowing where the stuff lies
Just like one is aware of where all the masala, pulses and other related stuff are, women should be equally aware of all the investments done by the family and also their status in it. This is especially important in case of estate planning related issues, divorces or untimely demise of breadwinner.
Step 4: There is risk in everything
As all the readers would be aware that relatively simple meals like curd rice can also go horribly wrong or at least not up to satisfactory level. Similarly even the safest of investments have risks which one needs to be aware of, so please remember that even with the “safe” instruments like bonds, fixed deposits etc.
Step 5: A balanced diet leads to a happy and healthy life
We all try to achieve balance in our meal in terms of taste, variety and quantity. Similarly while planning your finances one must aim for a balanced portfolio which has proper asset allocation and one should also avoid greed based decisions just like one must avoid overeating.
Step 6: Plan for contingencies
We all know that sometimes unexpected guests turn up and we sometimes let him share a portion of the meal. Something similarly, one should plan for contingencies by creating contingency funds which are relatively safe and more importantly liquid so cash, short term FD’s gold to some extent are recommended as part of contingency reserve. Also stay adequately insured.
Step 7: Keep stirring and tasting the stuff
In cooking where one needs to regularly stir and check at regular intervals whether everything is all right, similarly in financial planning one need to monitor and review investment options, their returns and their allocation.
Step 8: Learn new variations or new dishes
One of the major aspects of becoming a good cook is to learn variations in existing menus and add new dishes to your repertoire. Similarly one must be aware about possible variations to existing in portfolios or new investment options and here you financial planner is the great friend who offers unbiased advise, well researched plans and of course helps you understand the newer investment options available.
Hence, like cooking where systematic and disciplined approach, with a dash of spice leads to a great meal, a similar approach to planning your finance leads to a happy life.