Sunday, March 30, 2014

WOMAN FINANCE SPECIAL ....................... It’s your finances, take control


It’s your finances, take control 
 
ONE GOAL THAT IS COMMON TO ALL WOMEN, IRRESPECTIVE OF AGE AND STATUS IN LIFE, IS RETIREMENT
Spend time to get your finances in line with your aspirations

Financial planners are unanimous in saying that when it comes to making investment decisions, women rarely take an initiative. There is a sense of being overwhelmed by numbers and statistics which, say planners, women find difficult to digest. But social dynamics are slowly changing. More women are earning independently from an early age and, at the same time, getting married later than sooner. Then why not invest money independently?
A study commissioned by DSP BlackRock Investment Managers Pvt Ltd and conducted by global research agency Nielsen across 14 cities in India in July 2013, found that only 23% of working women make their own investment decisions. The figure for single working women is even lower at 18%.
Making investment decisions is linked to financial planning. It is a simple exercise about allocating resources to achieve future goals. 

THE PLANNING PROCESS 
Planning has to be done around an objective.
The objective could be an important one like your 13-yearold child’s college education or it could be your desire to travel around the world. For single earning women without any children, the objectives could be linked to buying a car or a house or taking care of elderly parents. For an earning married woman whose spouse is also earning, it could be all these and the need to plan for a child.
But t he one goal that is common to all women, irrespective of age and status in life, is retirement.
Many women make their retirement their spouse’s responsibility. That’s not the best thing to do. According to Nisreen Mamaji, founder, Moneyworks Financial Advisors, a Mumbai-based financial planning firm, “While working women do give some thought to retirement, nonworking mar ried women almost never plan for their retirement. But it is important for them to at least be aware and involved in the retirement planning investments because in the eventuality of the husband not being there, she will have to manage her family and finances single-handedly.”
Once your objectives and the context to your financial planning has been set, you can then decide the products through which you can achieve these goals. This could be an appropriate mix of various products such as fixed deposits, provident fund, equity and debt mutual funds, among other things. 

CATER FOR CONTINGENCIES 
Other than investing to meet financial goals, you must think of contingencies.
A loss of life can be covered through insurance. If you are a single working woman without any dependants, this may not be your primary concern.
However, if you are single and have a loan running, there is merit in being insured, at least enough to cover the loan amount so that the liability doesn’t fall on your kin.
Married, and children, make financial dependency really gain pace. “If both partners are working, insuring the loss of income in the unforeseen event of death for both is important,” said Mamaji.
The other emergency that may take place is health related. These are also hard to predict and can get exaggerated if there are unforeseen occurrences such as accidents.
In a study, ICICI Lombard found that premium contribution by women towards health insurance increased by 38% in 2012-13 from 2011-12. Women even have the option of taking on medical insurance that has
maternity benefits. 

WHAT SHOULD YOU DO? 
Financial independence for women can’t just be about earning their own money, but also about how they manage it and secure their and their family’s future, said Aditi Kothari, executive vice- president, DSP BlackRock Investment Managers. “Today, more women are earning independently but divorce rates are also increasing. Moreover, women tend to outlive men. There are good options for investments but many women don’t know what to do,” she said.
The foremost step towards financial planning is to become aware, which means understanding how you can make your money work efficiently for you over a number of years. The objective could be to ensure your family’s financial security, your retirement or even just your travel dreams, but the approach has to be to embrace a planned personal financial management and goal-based investing.
A part of being aware is to get the details right. Ensure that you name dependants as the nominees in these investments and insurance policies. Also, it is a good idea to work on a will when you know who you want to be the beneficiary of your investments. Even if you have no dependants, it may be wise to draw up a will so that your family does not have to bear the burden of any liability.
Financial control is the biggest tool in your hand. Use it, and use it well.
Lisa Pallavi HT140322

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