Swati is a senior manager in a multinational company and a mother of two. Her husband Aman is always on the move. Swati struggles to balance work and life. She has no time to look at her money. So money is in 4% savings bank account. Oh yes, she has indeed opted for that attractive jeweler scheme of 12 EMI + 1 EMI Free. That’s all she knows about savings. She expects Aman to take care of money. But Aman too has no time. Now Swati is wondering how much money will she really need for their children’s education? How should she save for this goal? She realizes that with inflation at above 7%, and her money in savings bank account at 4%, she is losing out. 

The personal finance challenges observed with working women are as below:

1. No time to manage money
2. Don’t understand personal finance
3. Afraid of getting involved in money matters
4. Don’t know how to start
5. Feel secured only while buying Gold 
6. No budget for shopping, jewellery and diamonds
7. Can’t invest openly as savings are secret
8. Don’t want to take any risk with money
9. Never thought of estate planning
10. ‘Will start next year

In many houses, its often women who saves. So if they are not savvy, the money may not grow.  Since women control the household budget, the levels of saving have a high dependence on their ability to manage the expenses.

Here are specific actions women can take in their journey to be financially independent:

1. Read a good personal finance book. We recommend ‘The Richest Man in the Babylon’ by George Clason and ‘Rich Dad Poor Dad’ by Robert Kiyosaki. 
2. Attend Personal Finance seminars. There are many organizations working towards the cause of financial literacy. As an example, MoneyLife regularly arranges personal finance sessions in Mumbai. The recorded sessions are also made available on their YouTube Channel.
3. Money also needs a break. So one can take a holiday with the spouse and focus on planning your money for next 20 years.
4. Be reasonable and help the spouse in managing money in a better way. One should avoid taking a conflicting stand on money and rather focus on getting an agreement on common financial goals.
5. Take interest in the meetings with the financial adviser, participate in the discussions, ask questions, make notes, give actions and take actions. 
6. Draw the budgets and track actuals. Personal finance tools and mobile applications can be used to save time.
7. Watch One Idiot movie on YouTube along with the spouse and kids. This is a 33 minute video about importance of saving money. The short URL is http://www.bit.ly/gyroneidiot
8. In Kitty Party or social gatherings, invite a Woman Financial Adviser to share personal finance best practices. 

Make an action plan with ownership and target dates. Like many things in life, taking a Project Management approach will help to work in a focused and a result oriented manner. Take one step at a time and start with achievable targets.

If one is already done with understanding the basics, then the below actions can be a good start to get your personal finances in a good shape:

1. Setup an emergency corpus. If your spouse is also working then corpus of 4 to 6 months of expenses can be sufficient.
2. Consider a secondary health insurance
3. Take adequate life insurance
4. Setup goal based SIPs in line with your asset allocation
5. Make a will of your estate

To summarize, one should spend less than the earnings and save at least 30%. Investing all that is saved and doing it regularly will help to leverage magic of compounding and to be financially disciplined. To beat inflation, one should invest in tax efficient and superior asset classes. To avoid financial exposures, one should always stay protected against financial risks.

To be inspired, one can read books like Rashmi Bansal’s ‘Follow Every Rainbow’. It features 25 women who have taken a different path and made a difference to the society. See how they handled their personal and business finances. If they could do it, you too can do it.

Start today!


This article was originally published on Moneycontrol
The author can be reached at [email protected]