As women get increasingly independent not only in terms of generation of money but also in the use of money, there is an important issue they need to address. It is not sufficient to just earn and spend money without too many questions. It is also essential to plan your financial security. It is quite surprising to see a lot successful women professionals and artistes leaving the entire task of money management to their spouses or to their parents, siblings or managers. It is time for women to actually take charge of their future and have a perfect track of their financial security.
What is financial security for women all about?
Financial security for women can mean a lot of things. To begin with they need to ensure that they are adequately insured. If they are earning money then it is essential to ensure that if your kids are depending on you, then they are not left in the lurch in your absence. Start investing smartly with a long term perspective. Ensure that there are no unknown liabilities that you are a signatory to without your knowledge. That is why even if you delegated the money management to anybody, it is important to keep a tab of the entire activity. What about your retirement? Have you started creating a nest egg for yourself and what will be the corpus you will have. Are you medically covered so that your resources do not get used in paying your medical bills? These are some of the questions you need to answer. Women often make mistakes, and very obvious mistakes, when it comes to handling their finances. Here are five such mistakes to avoid in the interest of your own financial security.
1.Get involved in financial decision making and don’t leave it to anybody
If it is your money, then you must be the one talking to the financial advisor. Ask them probing questions and understand their methodology. Too many women leave out money handling as outside their purview. That is a cardinal blunder and you virtually lose control over your finances. Quite often, many women know nothing about their family assets, or investments or what liabilities their spouses and families have taken. Get involved at the very basic level right from budget planning to planning your child’s future to your own and spouse’s retirement. The more you get involved the better equipped you become to handle varied situations. Make it clear to your partner to involve you in every financial decision. Above all, don’t become guarantors or co-borrowers to loans or a joint signatory to investments blindly without understanding the risks before signing a dotted line.
2.If you can get leverage on your career, make the best of it
It is quite common for women across the world to give up their jobs during childbirth and later when the child is growing up. Nowadays, companies are not only willing to take women who have family responsibilities, but they are also willing to give paid leaves to women to come back and work. This is leverage you should not avoid. Work out with your employer how long they can wait and plan accordingly. While there is no harm in taking a short break for yourself, to take care of your new born child or to attend to someone sick in the family. However, such breaks should not lead to the ending of your career aspirations.
3.Don’t stay out of investment decision making
Whether be it investing in bonds, mutual funds or equity trading, there is nothing like men are better than women in the task. In fact, the world over there is a good number of women fund managers and who bring a high level of skill to the table. The bottom line is not to stay out of decision making when it comes to investments. In fact, as women they bring a degree of stability to the process and can counter the high degree of risk that a lot of men would tend to take. So, get involved and ask questions and ensure that you are present in all the meetings with the financial advisors. If you want to make your money grow, then your involvement is essential.
4.Hope is a good breakfast but a bad supper
The future is unpredictable and hence you should always be prepared for worst case scenarios. Work on simple solutions like life cover, medical cover, asset cover, liability insurance, emergency fund etc. It is essential for woman to be more practical, define the risks, quantify to the extent possible and take risk management measures. That is the way your finances should work.
5.Don’t be sanguine about retirement; start planning today
Don’t assume that you have a long time to retirement. You have to make time work in your favour. The earlier you start planning your retirement, the longer you invest and the more you accumulate. As a woman, it is important to make money work hard for you. Women must start investing for their retirement as soon as they start earning. Again, the same rule applies. Involve your close kith and kin but don’t just leave this to others. You need to give you 100% involvement to the process.
There is a lot of power in financial security. It is entirely in your hands!