As per the HDFC Life ValueNotes Life Freedom Index survey, urban women score 61.4 (Financial Planning Index) on a scale of 1 to 100. The survey concluded that even though women score better in terms of comprehensiveness of financial plans, they are not realigned and reviewed appropriately or frequently enough.
Women’s Financial Needs
We are aware that men and women are different in many ways, but does that apply to financial planning too? The answer is yes.
Longer life expectancy: Women outlive men at an average of 4.9 years. And a longer life expectancy comes with several financial challenges such as healthcare. Women need to ensure that they have sufficient money to give themselves the best treatment possible. Plus retirement does come with its own baggage.
Pregnancy and motherhood: Women are more likely to take time off from work during pregnancy and initial months once the baby is born. At times, women give up their work in order to direct all their attention towards the little ones at home. In the bargain, a significant amount of income is lost resulting into lesser savings. Other financial implications would include health insurance and retirement benefits offered by the company.
Importance of financial planning
Managing income: Financial planning plays a very important role in managing income appropriately. This in turn helps in understanding monthly expenditure, tax payments and savings.
Savings: One important component of a financial plan would be savings, that will come to rescue in times of emergency. Savings are investments with higher liquidity.
Investments: The next important factor of a financial plan is investments. These savings are subject to market risks, but if done smartly, will help money grow.
Standard of living: If your financial plan is healthy, the level of wealth and comfort is on the rise. In short, standard of living is closely related to quality of life.
Retirement: The most important outcome of a successful financial plan is a secured retired life.
Tips to financial planning
Set an objective: Unless and until an objective is set, we can’t get started with a financial plan. It’s also important to define the amount of money and the time horizon required to accomplish the objective.
Prepare a plan: Once the objective is set, it’s time to draw up a financial plan. For starters, make note of your income and expenditure. Remember, savings need to continue even during unforeseen circumstances.
Invest: Discipline investment is the key to a successful financial plan. It’s critical to read and understand the nature and risks involved in each investment.
Review/ realign your plan: A financial plan is of no use if it is not reviewed regularly. It’s important to review a plan to judge the performance of your investment. If the plan is performing poorly, it’s has to be realigned with the help of a financial advisor.
Ms. Padalkar joined HDFC Standard Life in August 2008 after a seven year stint as Executive Vice President-Finance at WNS Global Services, an NYSE listed leading global business process outsourcing company. Vibha's key achievement during her tenure at WNS was to lead a team that successfully completed the Group's IPO on the New York Stock Exchange in a short span of six months. Prior to WNS, Vibha was with Colgate Palmolive India.View Complete Profile
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