She Talks Money: How to plan your finances as a woman in India

Money...show me the money.

The first thing to remember in this context is the fact that financial planning is a life skill and is gender neutral. While what we buy with our money maybe different for men and women, the idea of saving and managing finances smartly has nothing to do with our gender.

The way women are treated as consumers of financial products doesn’t really do justice to the average, collective intelligence of this gender. There is enough data to show that women as consumers of financial products and investors will help push the economy in the right direction.

The way women are treated as consumers of financial products doesn’t really do justice to the average, collective intelligence of this gender.

Women need to save and be smart with their money. Being money-aware and understanding what options of investments are available are imperative. Tracking what is being spent and how savings can be improved, can go a long way.

Whatever the earning capacity, employed or unemployed, most women have access to a regular inflow of money. Salaries or expense money, both ways its good to plan, watch what expenses are repetitive, which ones are one off and then track these trends so there is an understanding of what works well.

A regular saving mechanism is good to have as a contingency fund in case of need. This could be as simple as stowing away a small amount in a piggy bank at home.

For tracking, there are many applications that give a framework and analysis on expenditure. These are a great way to help assess what the money is being spent on and how can it be managed better. Better management means better savings. More savings means there’s more for investment.

Once there’s a good understanding of the personal landscape of money matters, it’s good to also get insights into how investments work and what would work for you and get perspective on this front. Also, both long term and short-term investments are a good idea as they help take care of different requirements and cater to different needs that could arise in the future.

Investments in term and health insurance are a great idea too as while they may not seem smart in terms of monetary returns, they surely come in handy when you are in adverse situations in terms of health or will help the family in case something happens to you. It’s a smart thing to invest in good health and wellness, and at the risk of sounding cliché I will say health is truly wealth.

A regular saving mechanism is good to have as a contingency fund in case of need. This could be as simple as stowing away a small amount in a piggy bank at home. It’s also good to have a small recurring deposit running to ensure a steady saving cycle. Beyond this, it’s also good to explore SIP’s or Systematic Investment Plans as Mutual Funds and Markets tend to have higher interest rates as compared to other savings schemes available in the market. There’s a plethora of information about schemes and mutual funds that is available so read up before choosing what you would want to invest in. It's also good to experiment with the Stock Market to see if you have an interest or like to trade, it opens up interesting avenues to earn better.

A good financial plan is a mix of money in many places, generating a steady income and building a pool for more

Fixed deposits, gold or other metal, real estate, chit funds are all popular methods but all of them come with their fair share of risk and the returns aren’t always great. Every monetary move should be backed by sound research and in our hyper-connected world today its easy to get information and understand what the landscape looks like before making monetary decisions.

Tax saving funds and deposits help save tax and a PPF would also work well if there is a plan for long term saving. It’s good to consult with a financial advisor occasionally to get a better insight into what would be the best way forward.

Each fund can be used according to need and that way, there’s also predictability built in, which makes it simpler to manage.

A good financial plan is a mix of money in many places, generating a steady income and building a pool for more. It’s a good idea to budget spends and to see what months need more and what months need less. Building a strong portfolio early always helps sustain for long term.

From an expense point of view, if there were to be areas earmarked like travel, shopping, books, eating out, education and if each of them got a share put away or used every month, it would help ease sudden expenses that crop up. Each fund can be used according to need and that way, there’s also predictability built in, which makes it simpler to manage.

My mother used to always tell me that whatever I earned, I should spilt it into three parts – 33% each and one part should be used on regular life expenses like running the house, paying bills, transport and such things. The next portion would be personal indulgences like shopping, travel, fine dining, so that would be money spent on the self. The last third would be for savings.

Can’t argue with that logic as it makes sound financial sense!

So, earn more, spend wisely, learn more, save more, be more – financially and beyond!