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Women’s Day 2023: 5 Ways Women Can Start Their Journey To Gain Financial Independence

Like all other aspects of raising kids or taking care of the physical well-being, the financial well-being of the family is also equally important and women should play an active role.

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Women are breaking boundaries in all spheres of life, for a matter of fact India got its first full-time female finance minister when Nirmala Sitharaman was appointed as the finance and corporate affairs minister. Today women are much more empowered and are riding the startup wave as they lead from the front.

Women are now getting better and better at making money, but the same cannot be said when it comes to managing money. Financial independence does not come with just earning, but by taking all financial decisions independently and confidently. It is still seen that the money decisions are best left to the males in our families be it our father or spouse, most of the time we seek male validation for making even the smallest financial decision. Even today handling our finance does not seem like a priority for women and sometimes many of us also feel investing is boring. 

There are times when women feel awkward asking about the family finances and also perceive it as a subject that could lead to conflict or it would mean competing with their spouses. Like all other aspects of raising kids or taking care of the physical well-being, the financial well-being of the family is also equally important and women should play an active role.

ALSO READ: Contribution Of Women Entrepreneurs Towards India's Economic Growth. How They Are Shaping The Future
 

Here’s how to start the journey of financial independence

1. Firstly, start with understanding your financial position. This starts with understanding the family's current net worth, for instance, the assets you own as a family, and what kind of financial liabilities/ loans you have as a family. Also, try to understand the cash flows such as the earnings and spending of the family. It is also important to know if you are saving enough as a family. If you save 20-30 per cent of the income as a family, you are doing good already.

2. Now, that you know your financial position and net worth as a family, it's important to know what do you own individually. In case of any unforeseen event, can you stand up on your feet and live independently? Most of the families own their house, in many cases, the house is mostly owned by male members as they contribute maximum towards downpayments/EMIs etc. Even if you are a homemaker, you play an equal role in taking care of the home, raising the kids, and taking care of the family. There are times when women give up highly rewarding careers to raise a family.

3. Women are much more aware of the monthly budget and the rise in prices of food, utilities, rent, and school fees over a period of time. So, while women are excellent savers, just saving is not enough, they need to learn how to invest as well, as one needs the savings to earn a little more than inflation. There is a need to move beyond traditional investments like gold, and fixed deposits and instead look at Mutual Funds/Equities or growing assets to beat inflation. So, start educating yourself about various asset classes like real estate, gold, debt, and equity.
 
4. The best way to learn investing is to practically start investing and handling your own accounts. Start operating your own bank accounts, and if you already don't have a Demat account start opening and operating your demat account. Start with making small SIPs in Mutual Funds and track how the fund value moves with ups and downs in markets. The key is starting on your own, however small an investment it is.

5.  While we all were aware of the risk, Covid-19 has bought it right to our doorsteps. Ensure all earning family members have adequate Life Insurance in form of a Term Policy. Each & every family member, including dependents, should also have adequate health coverage. The family should have at least 6-12 months of expenses in an emergency fund. Have a folder handy where all insurance papers are filed and can be accessed by all family members in case of emergencies. Make a checklist of all investments and check for nominees & beneficiaries. When you learn to keep the risk at bay, half the battle for financial independence is won. 

All this is a good starting point, like with physical health, annual health check-ups are a must. The same holds true with your financial health, make sure you review your financial goals and portfolio in every six months.

Nehal Mota is Co-Founder & CEO - Finnovate

[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP News Network Pvt Ltd.]

 

Published at : 08 Mar 2023 08:54 AM (IST) Tags: financial planning International Women's Day International Womens Day 2023 financial freedom women and finance
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