Financial control is one of the key aspects of being empowered as individuals for both men and women. However, according to a recent study, only a quarter of women and less than half of working women in India make their own financial decisions.
Being financially empowered involves taking an interest, being informed, and developing the habit of managing your money on a regular basis. Therefore, the first step for a woman to become economically empowered is to take an active interest in financial planning for herself and her family.
Financial planning is the process of managing day-to-day finances (short-term) while looking to the medium and long-term towards regular goals. Wealth creation through proper asset allocation is a key component of financial planning. Data show that women, on average, live longer than men, but they are not always in good health. So a very important aspect of economic empowerment for women is to live comfortably in their later years.
If you are a working woman, start systematic savings and financial planning early and early. Assets built early in your career can serve you well in your family years when you need a little more flexibility. Life insurance should form a necessary part of your financial portfolio to protect your family’s interests in the unfortunate event of your death. Some life insurance companies offer premium discounts for women. Since COVID-19, the need for contingency insurance, such as life and medical expenses, has become more important for everyone, especially those with dependents. Health insurance plans are widely available as a floating family option, with comprehensive coverage (cost) limits designed to cover several members of the family.
There are many savings and investment options in today’s market. Traditionally, bank term deposits and term deposits have been the preferred savings option for investors looking for a secure return. At the other end of the spectrum is a booming stock market with a track record of solid long-term returns, despite the potential for extreme short-term volatility.
For several years, mutual funds have offered investors the option to participate in the bond and equity markets (through selection of funds), depending on the investor’s risk appetite, in exchange for fees paid to the fund house. Insurers also offer retirement plans ranging from non-participating (where returns are guaranteed), participating (where ultimate returns are based on the performance of the company’s funds) and unit-linked (where returns are guaranteed). We offer different types of insurance and investment plans, including: Linked to market performance of asset segments. Systematic and structured investments spread across various financial instruments and physical assets enable women to achieve their financial goals at different life stages. You’ll get expert advice on financial planning and a wealth of information on our website.
As a mother, milestones in your child’s education should be given proper importance in your financial planning. There are insurance plans designed to meet this specific need, commonly referred to as child plans or refund plans that pay cash at specific points during the policy period. There are also some government schemes, such as the Sukanya Samridhi scheme for girls, which, although locked-in, guarantees tax exemption and offers a fairly high rate of return. Saving and investing in your child’s name from an early age can go a long way in instilling the importance of financial planning as a necessary skill in your child’s values.
There is no freedom like financial freedom. Women can build sustainable finances just like they build and nurture everything else. Even if you are a non-working woman with primary responsibilities for your home and children, learning about the many savings and investment opportunities available in the financial markets can help you effectively finance yourself and your family. You can contribute to the plan.
Review your finances regularly and rebalance your portfolio to meet your changing lifestyle and savings needs. Actively discuss finance and financial planning with other women from all walks of life to spread awareness and contribute to the causes necessary for financial inclusion and women’s empowerment.
The author of this article, Bhavna Verma, is an Appointed Actuary at IndiaFirst Life Insurance Company Ltd.
60% of female investors still prefer traditional investment options