Why is Financial Planning Essential for Women?

By SiliconIndia, Monday, 01 August 2011, 04:30 Hrs

Bangalore: Investments, forms an essential part of financial planning for all individuals, including women. Investments generate returns for the future and take care of financial needs. Women appear to be confused when it comes to their relationship with money, investments, long time finances and retirement planning. Women seem to be comfortable leaving their finances and retirement planning to their husbands/father. Though women consider themselves to be the CFOs at home-strong, dominant, managers of family finances, they seem to be less confident about making their own investment decisions. Apart from working women, homemakers should take to financial planning too. Bottom of Form

It's time that as a woman, you realize your financial situation and learn more about money, more than just balancing the checkbook and paying the bills. Women have to handle their funds in a different way from men. Mostly, due to factors like differences in earning patterns and concerns particular to women. Family conditions, change in locations, or orthodox family backgrounds, birth of children may be responsible for making women put their careers on the back burner. So, the monthly household income drops drastically, changing the situations in a household. Statistics show that, on an average, women live 5 years longer than men, earn 25 percent less during their life time and work 11 years less in their careers. Hence it is essential for women to plan her finances wisely.

Read more to find out how you can handle your monetary situation and turn it to your best.

Plan Separately from your Spouse: It is essential for women to have a detached and personal finance plan from her family. The alarming rates of divorces and lower security of life has increased the requirement for separate finances. If a woman manages her own finances, she will be well equipped to handle monetary issues individually, if ever the need arises.

Budgeting: Track where your income is being spent. There is no easier route to financial freedom than tracking one's own expenses. Financial success comes from spending less than you earn. Not keeping track of money spent leads to overspending. Budgeting starts with savings and savings starts with paying yourself. Set a savings goal per month and plan your spending around the balance. It may seem difficult, but this strategy can and does work.

Invest: Contribute to your retirement plans. Investing is the most important of all.If your employer does not offer a retirement plan, consider Life Insurance, Funds and Securities and Government Provided Investments as they are the best options which you can invest in. You could also compartmentalize your investment into various Fixed Deposits, NSCs, PF, PPF, Stocks and Mutual Funds and also in Gold and other Jewelry.