Top 6 Ways For Working Women To Build A Healthy Relationship With Money

Women have always been adept at managing household finances. She contributes to the overall household in many ways. Women today are climbing the corporate ladder, earning well- sometimes more than their partner and handling responsibilities efficiently. So, why do financial planning and investments for the future considered a man’s bastion? Even in today’s day and age, only a very small percentage of women are actively involved in financial planning and decisions. They need to be financially independent in the event of life-changing situations such as the death/ disability of a spouse, divorce, job loss, etc. Many women, especially in India, are forced to take career breaks or leave their jobs due to marriage or motherhood. They are forced to be financially dependent on their partners. Investment for them usually means occasionally buying gold coins or jewellery or opening a fixed deposit. Other investment options are either considered unsuitable for her or that “she won’t understand them”. Not many educate her on the importance of proper retirement planning. Without a retirement corpus, she could be forced to rely on her children for her needs. And this is not just true for women having regular jobs but for businesswomen too. Women might need to take a business loan to grow her business. Thus, the importance of learning the art of financial planning and investment management can’t be stressed enough.

Why is Financial Planning Important for Women?

Financial freedom is having a steady source of income that ensures you enjoy a comfortable lifestyle throughout your life. Moreover, women are naturally more disciplined, diligent, and consistent. So, why should women take charge of their finances?

• Financial Independence: Financial freedom enables women to confidently face unplanned life crises. Also, women on average, have a longer life expectancy. A robust retirement plan can help provide for additional healthcare expenses etc. A financially secure woman does not have to depend on others for her livelihood and lifestyle.

• Life-altering Circumstances: A financially sound woman is better prepared to tackle unforeseen situations such as the death or disability of a spouse, loss of income, divorce, etc.

• Self-Esteem and Self-Respect: A woman who doesn’t have to ask for money from others gets to maintain her self-esteem and self-respect. There’s nothing like reaping the benefits of your hard-earned money through smart financial planning, tailored for women.

• Career Breaks: Women are considered the primary caregiver and nurturers in the family. It is very common to find women forced to quit their jobs or take career breaks owing to familial responsibilities. Even when they decide to rejoin the workforce, they might not get the same pay, promotions, or perks as someone who didn’t have a break in their career. Thus, women should be able to manage their investment prudently.

• Break the Shackles: Unfortunately in India, educating women on financial planning does not come intuitively. Social conditioning has made money matters a male-dominated topic. Financial literacy should be inculcated in children from a young age, irrespective of gender.

6 Ways For Working Women To Build A Healthy Relationship With Money

Building a healthy relationship with money comes with practice and patience. It helps them to fulfill their dreams and desires without anybody’s financial help.

• Financial Literacy: Knowledge is indeed power. Women can educate themselves on finance and investment matters through financial blogs and journals. There are several free online finance courses that women can benefit from. These courses and forums teach and help women how to make the right investments. They also educate on tailor-made options like Loans for Women, mutual funds to invest in, business loans for women, gold investments, etc.

• SMART Financial Goals: Setting S.M.A.R.T financial goals is crucial to utilizing your money wisely and benefit from the returns. S.M.A.R.T translates to Specific, Measurable, Achievable, Realistic, and Time-bound goals. It will give you the clarity and path to execute them. These could be short-term ones like a vacation or long-term ones like a woman applying for a loan.

• Change the Attitude: Most women tend to be conservative in their investment management and planning approach. Rather than investing in moderate to high-risk mutual fund investments, stocks, and shares, they opt for low or no-risk products such as gold, fixed deposits, and public provident fund. Educating oneself eradicates the fear of women regarding loans and other attractive investment avenues.

• Make a monthly budget: Monthly earnings and expenditures don’t vary much. First, note down every little spending you do from your income. Allocating a monthly budget can help cut down on unnecessary expenditures and leave you with money to invest. Try to save at least 20% of your income for investments, health and life insurance premiums, etc.

• Build an Emergency Fund: Each month, allocate some funds to an emergency fund to be used only in cases of emergency. This fund should be instantly available when needed. You can either keep the money in a savings account on invest it in a liquid mutual fund.

• Manage your taxes: Taxes could take a big chunk out of your income. You can prudently save taxes by investing in schemes with tax benefits such as Equity Linked Savings Schemes (ELSS), Sukanya Samriddi Yojana, PPF, Life Insurance, and Tax-Saver FDs among others.

With the inherent qualities that a woman possesses, it is about time she takes charge of her finances and secures her future. A woman can fulfill her responsibilities, dreams, and aspirations by creating and diligently following a sound financial plan.