On the occasion of International Women’s Day, there’s a quote by Russian poet Marina Tsetaeva that needs to be remembered, “Wings are freedom, only when they are wide open in flight. On one’s back, they are a heavy weight.” This quote perhaps best captures why women must be psychologically and financially independent.
This Women’s Day, we focus on five ways in which Indian women can be more financially independent.
Make a financial plan; it is your launching pad to the future
Leaving your financial planning task to your spouse or father is not good enough. While you can widen your horizon with timely inputs, you need to take ownership. Begin taking ownership by sitting down with your financial planner and making a financial plan. Where do you start? List your long-term and medium-term goals. How much do you plan to contribute to your child’s education and how do you plan to save and invest for the same? You must not only understand the goals aspect but also the resources aspect.
Shopping was a great experience, now become a smart saver
You don’t need to forsake shopping, but it is time to get money smart. Look at how much you can save and also where you must save. The beauty of savings is that the more you squeeze, the more you get out of it. However, saving alone is not enough if stored in chit funds and gold. Both are not wealth creators. Explore options such as equities which have greater potential for better returns.
Get familiar with mutual funds
You just heard that your colleagues struck gold in an IPO but you are wary of equities. That need not keep you away from equities. You can still participate in them through the mutual funds route. For women trying to juggle their careers, homes, and savings, mutual funds are the best way to move ahead. You have the privilege of creating wealth through equities, and at the same time, you also can do it passively being assured that your money is in safe and skilled hands. You can go beyond equities and buy bonds, liquid assets, and gold as well through mutual funds.
Get a hang of your debt as early as possible
It is quite common to see women being guarantors and co-borrowers without realizing the implications. Each time, you are creating a contingent liability on yourself. When you get into marriage alliance, check how much debt you are participating in so that it does not come as a surprise. If you have been splurging on credit cards and easy-pay schemes, it is time to restore order. Unless you get your debt and contingent liabilities in control, financial plans will have limited value.
Financial security remains a paramount aim
Financial security comes in a variety of ways. First, create an emergency fund to cover at least 6 months of expenses. This not only takes care of your emergency needs but also gives a backup if you want to make an entrepreneurial switch. If you have dependent kids or parents, take adequate life insurance. Plan your finances and career in such a way that any career break does not set you back in your career.
This International Women’s Day, take the financial independence plunge. After all, it begins with you!