Why Women Should Be On The Forefront In Family's Financial Decisions

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Women these days play an active role both in the workspace and at home. In addition to running their households, many women also contribute to the earnings of the family. Several women, off late, have also become the primary breadwinners of their families. Thus, it is necessary for women, regardless of what their marital status is, to be involved in making financial decisions for both themselves and the household in general. Listed below are a few reasons why women should have a say in the financial decisions that are made in their households:

1. Contribution to Household Earnings: An increasing number of women are entering the workforce every year. Given that women nowadays also contribute to the running of a household and bringing in finances, it is necessary for women to be equally involved in all financial decisions. Further, a woman should also ensure that she sets financial goals for herself and charts out a plan to achieve them.
2. Financial Protection of Dependents: Many women would also like to ensure that their dependents don’t have to face financial troubles in case of an untimely event. Thus, it is extremely essential for women to make financial decisions that will ensure that neither they nor their dependents have to go through financial troubles, regardless of what may happen in the future.
3. Women Have a Longer Life Expectancy: It is a widely known fact that women in many countries across the world have a longer life expectancy than men. Given this, it is necessary for women to take the required financial decisions to ensure that they can live a financially secure life.

Financial Planning Tips for Women

1. Purchase Life Insurance: It is a must for every woman to purchase a life insurance policy. Life insurance should be a part of one’s financial portfolio since it ensures that your dependents will remain financially secure if anything unfortunate were to happen to you. Life insurance companies nowadays offer various types of insurance products to cater to the diverse needs of their customers. Thus, if you are looking for a protection-oriented affordable life insurance policy that doesn’t offer returns, you can opt for a term insurance policy. On the other hand, if you want to receive returns through your policy, you can opt for an endowment policy, money-back policy, or unit-linked insurance policies.
2. Create a Budget: If you want to keep a track of your savings and expenses, it is necessary to create a budget. A budget will help you live within your means and know where your money is going. Once you create a budget, you will be able to identify what your major expenses are. Post this, you can work out a way to reduce unnecessary expenses, which will, in turn, help you save more money.
3. Have an Emergency Fund: As soon as you start working, it is necessary to maintain an emergency fund. Having an emergency fund will help you tide over financially difficult circumstances with relative ease. Thus, if you were to ever lose your job or fall ill, you will have the necessary funds to pay for your needs without having to dip into your savings. You can also use your emergency fund to pay for any debts or loan EMIs that you may have to clear if your regular source of income were to stop for some reason.
4. Reduce Debts: It can be quite easy to rack up a substantial debt in a short period of time. Having too many debts or loans can reduce your disposable income significantly since you will need to put aside money to pay off the debt on a regular basis. Thus, it is advisable to avoid taking too many loans. If you do have to take a loan, you should, ideally, ensure that not more than 25% of your income goes towards paying your EMIs.
5. Save and Invest for Future Financial Goals: It is essential for women to have both short-term and long-term financial goals to work towards. Thus, you should ensure that you list out your financial goals, work out a timeline within which you can reach them, and select financial avenues in which you can invest your money in order to ensure that you are able to accumulate a corpus that will be sufficient for you to attain your goals.
6. Plan for Retirement: Regardless of what age you are, it is necessary to plan for your retirement. Ideally, a part of your monthly paycheck should go towards your retirement fund. Saving up for your retirement will ensure that you can be financially independent even after your retirement. To save up for your retirement, you can invest in any retirement-oriented financial avenue including pension/annuity plans, National Pension System (NPS), etc.
7. Diversify Your Assets/Investments: If you are looking to accumulate a significant corpus and create wealth over time, it is necessary to invest in different financial avenues. Thus, while it is alright to invest in low-risk financial options like the PPF and FDs, you should also consider investing in mutual funds, ULIPs, etc., that are more high risk.

It is as important for women as it is for men to be involved in making financial decisions. In addition, women should also prioritise saving and making the right investments to ensure their financial well-being.