Women's guide to Building Long-term Wealth | Aviva India

Women's guide to Building Long-term Wealth

Women's guide to Building Long-term Wealth | Aviva India Blog

56.67% of the women entrepreneurs are sole decision makers of their finances while 38.71% take decisions with their spouse, father or significant other. - Success Strategies of Women Entrepreneurs by the Confederation of Indian Industry (CII) and Indian Women Network

Modern Indian women are shattering the glass ceiling in almost all the fields we can imagine. Be it to meet household responsibilities or workplace commitment; she battles every day to mark her success in every domain. She is a hardworking employee, successful entrepreneur, nurturing parent, loving spouse, efficient homemaker, and wears too many hats during a typical day of her life. But, when it comes to ‘money matters,’ Indian women tend to shy away. Even the women who are bringing home the bacon can be seen either to have a tougher time with money or willingly leaving the decisions on savings and investment planning to the men in their lives – fathers, husbands, brothers or sons.

It seems impossible that women can’t manage their finances or are not interested in building wealth and investing. After all, from time immemorial, our mothers have been praised for their better money management skills. Perhaps they need some worthwhile financial advice to achieve financial independence.

Here we are with a list of smart money moves women can make to secure their financial future.

If you are a single woman

A steady income and no family commitments –this is a favorable time to lay the firm foundation of your financial future. However, as there is no one else to share the financial load with you, you are the sole breadwinner and also one and only for managing your finances. So, it is crucial to make wise decisions. Some tips for women who are flying solo.

  1. Start saving at least 20% of your income – A golden rule you should start following the moment you receive your first pay-check.
  2. Multiply your savings – Do it by investing the saved amount through appropriate growth assets, like savings plan, ULIPs, SIPs, and so on.
  3. Create an emergency fund – Stock at least six months of expenses. An emergency fund saves you from a potential financial crisis in the future, like loss of job, injury or illness, higher education, or any other reason.
  4. Repay students loans (if any) – For a worry-free financial life, it is advisable to pay off all kinds of debts, including student loan as quickly as possible.
  5. Educate yourself – As you are in the initial phase of your financial saving path, there are countless things to learn about money. Make sure that you depend on reliable sources for this.

If you are a married working woman

You have a partner to share the responsibility of money management. Have a shared vision of your financial goals for the future and don’t forget to look after yourself.

  1. Maintain a separate saving account – Being married, you and your spouse may have a joint bank account. But, it is advisable to maintain a separate saving account too.
  2. Work jointly – Discuss your future financial goals with your significant others and work together to achieve them.
  3. Be aware of the key investments – It is important to keep yourself abreast with the major avenues where your money is flowing.
  4. Prepare an inventory of all financial documents – Keep every piece of useful information, like accounts, or financial documents handy at one place.

Read More - Role of women in shaping the finances of a household

If you are a homemaker

Being a homemaker, you have added responsibility of managing your finances because your household is running on a single source of income. Irrespective of who is the breadwinner, you know about everything your family depends on. So, you are the best person to take care of your finances.

  1. Track household finances – Stay up to date with all the channels from where money is flowing in or flushing out. After all, money doesn’t grow on trees!
  2. Find a part-time job – You must be great at something, like writing, graphic designing, giving tuitions, or anything else. In the tech-savvy world, there are countless options to earn money through work from home jobs. Use your skills to contribute to household income.
  3. Be insured – Do not hesitate to ask your spouse to get you a health insurance, preferably through a family floater plan.
  4. Map out your retirement corpus – On average, women show a longer life expectancy than men, which means you are likely to live 5-7 years more than your husband. Thereby, convey to your spouse that your retirement kitty should also be linked to your life expectancy.

If you are divorced or widowed

It is important to keep a strong hold on your finances because now you are the single financial decision maker. It doesn’t mean that you have lost your chances of making the right investment decisions. You just need to ascertain your financial situation quickly and start preparing for a positive financial life without a partner.

  1. Update beneficiaries – From life insurance to bank accounts, update beneficiaries where required.
  2. Find out the outstanding debts if any – If you are responsible for any joint loans, pay them off quickly
  3. Choose safe investment plans – Put some of your money in save avenues, like ULIPs, FDs, PPF, etc.
  4. Seek professional help if required – If financial planning seems too much on your plate, consult with a financial advisor.
  5. Retirement planning – Take care of your retirement kitty and replenish it with wise investment plans.

Being a woman, it is natural to be cautious and stay away from any risky proposition for investments. It is a prudent choice, but at the same time, you need to put your savings to work. Keeping your money idle in a saving account is not going to help. Thereby, it is advisable to choose the safest channels through which you can let your money grow. Believe us, achieving financial independence will make you feel like a million bucks.

Jun 52/19

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