“Financial Freedom Forever”-New Meaning of Women Empowerment

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Studies show that women feel lack of confidence when it comes to investing their money and they are mostly risk-averse. It is a harsh truth that, instead of taking charge of their financial future, many women either leave money matters to the men in their lives or ignore the importance of planning altogether. But the fact is that women face different life challenges and financial risks as compared to men and it becomes important to take charge of planning their financial future properly.

What to do? Proper savings and investments can help you become financially independent over the time, even if you are not earning. The following are the major steps that one should take and understand for their financial freedom.

Educate yourself about Money: First of all, it is very important to educate yourself about the money and it is not that difficult. You must understand your need to save, irrespective of your current position, and then you must understand where to invest. Never feel shy or hesitant to learn more about money i.e. savings, investments, investment products, mutual funds, etc. It is better to know about the financial holdings /assets /insurance policies and bank/de-mat accounts in your family to be ready for any emergency.

Be Active: The idea is to get more engaged in financial matters of your family, with the support of your spouse. Open your own bank account or have a joint account with your husband. You can also have your own credit card / debit cards for managing household expenses or your own regular expenses.

Get Insurance Cover: Most often we find that the women, not having financial earnings are neglected when it comes to insurance coverage. This is a wrong perspective to adopt as every girl /woman has to be adequately covered with insurance. It will not only help you in your bad times, also your other family members will be benefited after you.

No more Excuses- Take control: Housewives always have the excuse that they don’t earn salary and have no money to save. Always remember that there are numerous ways of cutting back and investing that money. Saving just Rs.1000 a month over 30 years, yielding an annual return of 10%, will provide you with more than Rs.2 million.

Start budgeting and allocate your allowance or salary more sensibly. Every rupee you save can change your future.

No amount you save is too small: The wonder of compound growth is well known, and the benefit of time must not be underestimated. If you save Rs.1000 a month at an average return of 10% a year, your final nest egg will be as follows:

  • After 10 years: Rs.204844
  • After 20 years: Rs.759368
  • After 30 years: Rs.2260487

Where do I Invest?

There are fundamental investing principles that apply to each of us. There are only four basic “things” in which you can invest. All investments, whether in shares, mutual funds, SIP, real estate, LIC, pension, gold, PPF, Fixed deposit or annuity, end up in one or a combination of the following pots:

  • Equities include investment in shares, mutual funds, SIP and other form of that. Return from these investments come in the form of dividends and capital growth.
  • Real Estate include investment in residential property, commercial property, land etc. Return from these investments come in form of rental income and capital growth.
  • Deposits include bank deposits, FD, PPF, bonds etc. Return come in form of interest only.; and
  • Gold include jewelry, gold bonds and articles made from gold and return come in form of capital growth only.

Diversification is Vital: Diversification is the technique that manages risk and reduces the volatility by allocating investments among various financial instruments, industries, and other categories. It aims to maximize return by investing in different class of assets that would each react differently to the same event. It will help you to distribute the risk and gain maximum benefit from your financial plan.

To sum up: Financially literate and independent women can be of great support and financial help to their families, especially husbands. Women have been known to be smart savers and money managers at home. Financial independence and empowerment of women can not only bring great benefits to a family but also to the entire community and country at large. Studies proved that men are perceived to be better investors because they are more aggressive than women and are prepared to invest in various asset classes that outperform all others over the time. Women tend to do more research and look at a lot more factors before making a selection. So, let us work towards this, ensuring beginning first at our own home.

Harsha Ramnani

Ms. Harsha Ramnani is a Fellow Member of Institute of Chartered Accountants of India with a vast experience in Management Consultancy and Audit & Assurance field. She can be reached at harsha.ramnani01@gmail.com.

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