Financial Independence For Women

How should women chart their course towards ensuring Financial Independence?

Women constitute around half the world’s population, and their participation and contribution are a must for a country’s development. Financial literacy, economic and social freedom, and encouragement to form their own financial identity are essential aspects for women’s growth. And if women take the financial lead in various sectors of the economy, they will give enormous contributions to India’s GDP.

However, with more women joining the workforce and becoming financially independent, a welcome change is underway. Gazal Kalra, a technology entrepreneur, agrees that the younger generation of women play a more active role in financial planning. Still, financial illiteracy is rampant among older women. And to bridge this gap, starting with your family and the women around you will be highly beneficial.

What are the most important things that women need to keep in mind when managing their finances?

When Mitali Mukherjee asked Pooja Baid, Head, Marketing Experiences, The Coca-Cola Company, she introduced a fascinating concept of EMI- Education, Monitoring, Investigate and Identifying Opportunities. Firstly, it is crucial to deeply educate yourself about the basics of finance and investments before making any decisions. Secondly, regular monitoring is equally important to know whether the investments are heading in the right direction and lastly investigate whether the goals and objectives match with the investment decisions and, if not, upgrade your investment tools accordingly.

Pinky Mehta, Chief Financial Officer, Aditya Birla Capital Limited, believes that there’s a process that starts from knowing the numbers, i.e. she should have answers to the following questions:

● What is my income source?

● How continuous is this source?

● How much is the monthly expense?

● How much is the EMI for a car/house/education loan?

Next, plan your long term and short term goals and cultivate financial habits; at least 20%- 30% of her income should regularly be set aside for savings. Think about your liquidity requirements and create an emergency fund and lastly, plan for your retirement to be financially independent even in your 60s.

Investment tips would you give to women who are on a career break

When women take a career break due to financial or maternal responsibilities, it incites fear into their minds of not having an income source. The expenditures come pouring in and ultimately it creates a considerable resistance to invest.

So, to avoid that, women should take some time to identify their financial goals and a bouquet of products that makes sense for them. This is essential because they are the ones who need maximum diversity in terms of needs- They will need liquidity for the monthly expenses, emergency funds for their family and kids, and they would also need the funds to plan for the long term. So, instead of holding the funds in, this is the time where investment decisions need to be made. Pooja Baid, adds to this and suggests that having a financial advisor will be extremely helpful as the load to plan your finances will be shared.

Conclusion

Women in India have had a complicated relationship with money since time immemorial. Societal norms have and continue to weigh in on the gamut of money management in most families. However, women worldwide, known for their excellent management skills in running a home, should not be dependent on men in making financial decisions involved in planning for retirement and making other investments.

An Investor education and Awareness initiative of Aditya Birla Sun Life Mutual Fund

All investors have to go through a one-time KYC (Know Your Customer) process. Investors to invest only with SEBI registered Mutual Funds. For further information on KYC, list of SEBI registered Mutual Funds and redressal of complaints including details about SEBI SCORES portal, visit link : https://mutualfund.adityabirlacapital.com/Investor-Education/education/kyc-and-redressal for further details.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully