Executive Summary: Women save, but don't greatly invest. They manage home and career but no so much of money. Their financial awareness is low. Reviewing insurance for self and spouse, having articulated goals, covering up health care exposure, utilizing equity and making a will are 5 top money tips for Women
This is something close to my heart and I intend to make your foray into managing your money a bit easier on you. Once you decide to take charge of your personal finances, these are the five things you absolutely must do.
Ensure you or our loved ones are not left in the lurch
If your family is dependent on your income it is imperative for you to insure your life and do so adequately. Conversely if you are largely dependent on your spouse, understand how adequately insured he is. Don’t confuse insurance with investment. The purpose of both are very different and just because a product is named child plan or retirement plan does not mean it’s the best way achieve the goal . Remember there are no free lunches in life! If an insurance product promises to do multiple things like give you a cover as well along with an investment opportunity in all probably it is not doing any of it optimally
Insurance is meant to take care of your loved ones in case of an unfortunate loss of life. Term insurance offers you best value for your buck. They do not give you any return of money and are pure risk cover where the amount is payable only in case of loss of life. If you were to live to a ripe old age consider this as the money you paid for your peace of mind. Term covers especially the online ones come with low premium and large cover.
Articulate your goals in life
No matter how caught up you are with the daily routine, do take time out to articulate your goals in life and put it down on paper. All goals whether it is taking a sabbatical to be a full time mom or buying the bigger car or house have financial implications. Once you know where you want to go, you can choose your financial route to get there. With the new found clarity you will be able to align all your financial decisions with the end goal in mind. This will help you put an end to ad-hoc and impulsive financial decisions. This by itself is not a small job.
The pain and suffering you under go with sickness is unavoidable but the financial implications of it can be avoided. Inflation in health care is at an alarming rate. Even a minor sickness requiring a few days in the hospital can put you back by quite a packet. Ensure you are adequately covered and understand the fine print of your health insurance. Set aside an emergency fund even if you are insured. Not all ailments will be covered cashless and hospitals could demand a deposit despite having insurance.
Make friends with equity
If your aim is to build wealth, than you have to befriend equity. If you are patient and do your basic homework right your equity investments will allow the magic of compounding to work on it to build a sizable corpus. If time and knowledge is a constraint Mutual funds can come to your rescue. Here again you do need to invest time may only a fraction of what you would, should you buy direct equities. Take the help of a qualified professional to help you choose the right one, the fees you pay for this service will be worth its weight in gold.
Make a will
We as woman spend disproportionate amount of time worrying about our children, I am still to come across a mother who hasn't lost sleep over some distant distress her child had to go through. Have you given a thought to what would happen in the unfortunate event of your child losing you or worse losing both parents in a tragedy? Think about guardianship and who you would like to leave your assets to. Accidents don’t discriminate on the basis of age. Make a will, it is very simple and there are online portals helping you do the same.
Prathiba Girish is Founder & CEO at www.finwise.in