Women’s Financial Management Guide 2024

Table of Contents

Women, on the other hand, must balance job and domestic responsibilities. Despite their equal partnership, women are still responsible for child raising, transporting children to school, ensuring all meals are cooked on time and to the liking of all family members, supervising house help to ensure the house is cleaned correctly, and caring for the family’s health and exercise. All of this makes it simpler for women to delegate one responsibility to their partner, which is money management.

In the year 2024, here is a thorough advice on how women may efficiently handle their finances. A woman’s best defence is a small sum of money. In several industries, Indian women have made significant achievements in breaking past the glass barrier. The transition from managing households to managing enterprises is significant. However, one subject that is still considered a male realm is money in general and investing in particular.

1. Set Financial Goals and Budget

Setting short-term, mid-term and long-term financial goals is an important step toward becoming financially secure. If you aren’t working toward anything specific, you’re likely to spend more than you should. You’ll then come up short when you need money for unexpected bills, not to mention when you want to retire. You might get stuck in a vicious cycle of credit card debt and feel like you never have enough cash to get properly insured, leaving you more vulnerable than you need to be to handle some of life’s major risks. It’s time to re-think your budgetary allocations. Budgets that are followed in late twenties needs to be altered keeping in mind future expenses such as buying a house or accumulating capital for a business idea that you always wished to start, or marriage. Rethinking spending on the latest gadgets or home decor products is a good idea for now. Instead, channelise spare money to fulfil your financial goals.

2. Understand the term ‘Financial Independence’

For women to feel financially secure, they have to understand the term ‘Financial Independence’, which is about deciding what to do with their money. This applies to both working women and also housewives. This awareness can help women not just save money but also invest in various financial instruments.

Women are not just the stronger but also the superior half of our species. Being financially free generally means reaching a life stage where your financial assets are sufficient enough to allow you to not work just for earning money. But financial independence for women means something different. And a lot more than just having enough money in the future. It can be about having the independence to earn and manage their own money in the present itself. At times, it’s more about having economic independence in the present and not just the so-called financial independence in the future.

3. Believe in yourself

As an advisor with over two decades of experience, I can tell you men don’t know better and are as bad or as good as you in managing money. So start by believing that you can do it, as you can do everything else in life. If your money is currently being managed by your spouse or parent, you should have a chat with them about wanting to learn managing finances, for your own good and seek their moral support in the same.

4. Become Part of Family’s Financial Decisions

It is not just important but imperative that women get involved in all financial decisions made in the family. Women shy away from finance because of legacy issues. While they are comfortable meeting household budgets and making the rupee stretch, they are reluctant to engage in investment decisions.

Actively participating in family’s financial decisions, irrespective of your marital status, is a sure shot way to take control of finances. The simple reason being that you learn more and more about the most crucial aspects of personal finance budgeting, goal-setting, investing for them and insuring against casualties, among other things.

While women must take the initiative, the man in the family, father, husband, or brother should also make the effort of involving the women. Nearly 42% of my clients still do not involve their women in financial decisions, in spite of us encouraging them.

5. Prepare for Retirement

Women worldwide live 6 – 8 years longer than men on average, according to the World Health Organization. Since women often have less than men saved for retirement, this creates a situation where women frequently outlive their money.

Social security can sometimes fill the gap, but it’s not always enough. The National Women’s Law Center reports that, among people ages 65 and older, 11% of women live in poverty (compared to only 8% of) men. This scary statistic underscores the importance of financial education for women of all ages.

6. Investments before Marriage

Being married is one of the most beautiful phases in our lives. However, matrimony comes with its own set of responsibilities. Thus, unmarried women – preferably in their 20s – must utilize their freedom to experiment or take risks with investments to build wealth. In fact, if you have a mix of short and long-term goals, it will keep you motivated. But there are certain golden rules to follow; never borrow more than necessary, especially if you are buying assets that have life-long financial implications such as a house. Another key point is about choosing from among the different asset classes; equities have historically proven to be the biggest wealth creators hence, appropriate investments in equity mutual funds through a Systematic Investment Plan (SIP) – where a fixed amount is invested at regular intervals – can help you build a substantial corpus overtime to reach your goals. In addition, for working ladies, investments in Equity Linked Savings Scheme (ELSS) mutual funds can help you save tax u/s 80C of the Income Tax Act.

7. Maintain a Spending-Saving Ratio

One way of ensuring that you have enough savings during lean periods or post retirement, is to ensure that you are regularly saving. If you are a single individual, with no financial obligations towards a family, chances are you will be at times tempted to spend lavishly.

A number of companies automatically deduct income for a provident fund contribution, and even if you are not covered under the scheme through an employer, you can sign up for a Public Provident Fund (PPF) scheme on your own. 

8. Build up your Emergency Fund

While saving for retirement is a no-brainer, you’ll also need to save for the many unknown and unplanned expenses that will inevitably arise.

Whether it’s a new roof, surprise dental bills, or a car that finally went kaput, you’ll need cash on-hand to save the day. An emergency fund can cover those surprise expenses and more, while helping you avoid going into debt.

9. Make some Investments on your own

Knowledge is of no value unless you put it in practice. Start with an SIP in a balanced mutual fund and check out the experience before deciding further investments. Most women find it difficult to do this because of the fear of losing money. Unless you do it yourself, you will never gain the experience. We all make mistakes in other aspects of our life and learn to do better from these mistakes. Hence, you shouldn’t feel bad about making some errors in your financial life.

10. Make Retirement Planning a Priority

It is natural for women to compromise on their needs and goals in order to secure that of their children. But, this habit can prove to be costly in the long run, especially during retirement.

Women in doing so jeopardize their financial safety and might make themselves dependent on their children later in life. Children may resent the dependence, which will eventually cause disharmony between the parent and child. More so because women have a longer life expectancy and hence, need a much bigger corpus to survive retirement.