By Rati Shetty, Chief Product Officer & Co-founder, Bankbazaar
One who has the gold makes the rules. Truer words have rarely been said. We take pride in making the rules when it comes to our life – be it our diet, how we present ourselves, our career choices, and so much more. Why should finances be exempt?
Financial independence can empower woman with a lot more influence within her family as well in the society. Several research papers from across the world has shown conclusively that women make significant contributions to the financial stability of the family. In today’s times, when inflation is rewriting the meaning and value of savings, an additional income can go a very long way in managing the household effectively and maintaining the standard of living. Women are also very active contributors to the financial goals of the family. Any additional savings resulting from both partners working also come in handy in times of emergencies.
However, financial independence has two aspects to it. The first, of course, is to have an independent income of one’s own. The second, as we define it, is to be 100% informed about financial goals and involved in financial decisions. The reason for this is simple: Earning alone will not give the desired financial autonomy unless one takes charge of one’s finances.
Admittedly, many women leave major financial decisions to the male members of their family. Few have the time to research, read, and understand the nitty-gritties of savings and investments between their commitments to their professional life, household, and children, or at least two out of three of those. Regardless, it is essential that they have an active role to play in the financial decisions.
1. Do you know your goals?
As an individual, you have your own personal dreams and aspirations. As a spouse, you share every family responsibility. As a parent, having a nest egg for your children is second nature. As a daughter, you would like to give all possible comforts to your parents. Meeting all these goals requires setting financial milestones and working towards them. Unless you know what your milestones are, you cannot analyze how realistic they are. Have you considered what your requirements are and when you would need funds? Do you what your corpus looks like? Without this understanding, you will not be able to save or invest effectively.
2. Do you know your options?
What works well for one person or family may not work for you and yours. Everyone is different and has different wants and needs. A financial plan that works perfectly well for your best friend need not fit you anymore than their shoes do. There are so many special schemes and offers tailor-made for women when it comes to financial products, be it loans, recurring deposits, saving schemes, or even insurance products. Do you know what products are available for savings, investments, and insurance? Are you sure you understand the bare bones of how they work? Will a home loan in your name bring more savings than a joint loan; could a recurring deposit actually work in the short term; a family health insurance might prove to be more apt or would it? Do your research on what works best for you and plan accordingly. It is not about being a financial expert; it is about understanding how the pieces fit together.
3. Do you know your financial situation?
Let’s face it: we plan and save and invest and insure so that our families are secure. If you are the one taking up responsibilities in case something unfortunate happens, you need to know where you stand financially. You need to be able to take stock of the situation and figure out where you go from here. Unless you have a good idea of your investments, your liabilities, and your liquidity at hand, you would be at a loss to proceed in a crunch. There would be very little time for you to learn and understand what needs to be done and how during an emergency. You need to know beforehand.
4. Do you know how to get the right information?
These days getting information is no longer difficult. The internet has changed the way information is made available and accessed. These days, you can read articles online, watch videos, or view presentations to understand more about a topic. Aggregators and comparison sites provide a plethora of information about financial products, their features, and the associated terms and conditions, in various formats. Usually, it is simplified so that users are not overwhelmed by the information. Not just getting information but even purchasing financial products is online and paperless these days. Have you tried it out yet? There is no easier way to be on top of all matters financial.
Your financial decisions will impact your long-term aspirations and quality of life. So do your best to understand your financial situation and stay abreast of all your financial plans to the best of your ability.
Views expressed in this piece are that of the author