This International Women’s Day Break the Barriers to Secure Your Financial Future

"A woman's best protection is a little money of her own." - Clare Booth Luce, American author and US ambassador.

Every year on March 08, International Women's Day is celebrated, serving as a significant platform to highlight the incredible accomplishments of women worldwide. Although progress is being made, more work has to be done to give women equal opportunities and support so that they may succeed in the historically male-dominated fields of insurance, finance, and technology. The stories and accomplishments shared by individuals on this significant day inspire us all and play a vital role in driving change forward.

"I learned to always take on things I had never done before. Growth and comfort do not coexist." - Virginia Rometty, CEO of IBM.

"Define success in your own terms, achieve it by your own rules, and build a life you're proud to live." - Anne Sweeney, Co-Chair of Disney Media Networks.

Women are currently holding various important positions that are reshaping the financial sector worldwide as a result of improved education for a girl child, a shift in culture, and a new era of diversity, equality, and inclusion. Women are breaking stereotypes daily; from managing households to businesses, they are redefining all misconceptions about themselves. It is an age-old fact that women are better managers than men when it comes to money management.

The rise of female entrepreneurs today has dispelled many erroneous stereotypes about women and their capacity for financial planning. We need to dispel the myth that women can't handle finances beyond personal and household budgets. Women who struggle to make ends meet can experience a few barriers that prevent them from achieving their goals or planning for the future. They might incur a mountain of debt, neglect their health, avoid investments, and plan for their old age.

Join Now: PersonalFN is now on Telegram. Join FREE Today to get 'Daily Wealth Letter' and Exclusive Updates on Mutual Funds

Women experience several issues that derail their financial planning; it is necessary that you must take a look at these barriers and learn how to overcome them for a secure financial future.

1. Break the 'Glass Ceiling'

Many women fail to plan for their own financial needs, thereby creating their own personal glass ceiling. Start making plans for your own future. Just as taking care of your spouse, parents, and children together is crucial, you must a lso take care of your own finances. Women are no longer financially dependent on their partners as they once were. Thus, a woman, along with managing their present fearlessly, must also be thoughtful about their future. You need to define SM.A.R. T financial goals for your future, like your wedding expenses, a dream house or a car, an international trip, children's education expenses, etc. Defining your financial goals is your first step in financial planning.

2. Lack of Financial Independence

Despite the fact that the majority of women acknowledge the significance of financial independence, they claim that they do not earn enough to be financially independent. However, financial independence is not dependent on how much you earn; it is how effectively you plan your finances and do not rely on anyone else for financial needs.

A robust financial plan will lead you to attain financial independence. Financial planning involves defining goals, creating a budget, investment planning, retirement planning, building emergency funds, paying off your debts, etc. Proper financial planning helps you cope with unforeseen events and maintain financial stability. Financial independence simply means being able to make financial choices that will help you live the way you want.

The ability to manage your finances independently depends heavily on your ability to save regularly. Since the olden days, women have been known to save small sums of money from their household bills and store them in a secret place in the house in case of emergency. Always keep in mind that saving money or setting up a rainy-day fund is an excellent step towards your financial wellbeing.

3. Overlapping Duties

Women have a variety of roles to play in their lives, including that of daughter, sister, wife, caring mother, and in some cases, the family's sole breadwinner. Women frequently overlook caring for their health and medical needs when juggling these conflicting responsibilities.

It is critical to turn your attention to self-care first, given the escalating costs of medical treatments and a rise in cases of breast cancer in young women. Always keep in mind that you can only care for your loved ones if you are healthy. So, get regular health check-ups and invest in a suitable health and life insurance policy.

To ensure that their families will be financially secure in their absence, working women should make sure they have obtained separate term insurance. Also, get health insurance that assists with paying for the hefty medical expenses. Review your policy with your agent if you already have insurance to make sure you are adequately covered.

4. Fear of Market Risks

Women typically steer clear of investment-related decisions due to a fear of market risks and a preference to save in low-risk traditional financial instruments. Many women shift to less risky investment options like fixed-income securities, recurring deposits or a post office as opposed to parking money in equity instruments that are volatile in nature and yield high returns if you stay invested for a long period. Women's increased frequency of career breaks is also one reason for uncertainties in income and investment decisions.

The current volatility in the market may imply an aversion to equity investments, thus, prompting many to look for low-risk investment options. However, for wealth creation and earning inflation-beating returns, allocating a portion of your investments to equity mutual funds is important. You may invest in the best suitable mutual funds as per your risk profile and aligned to your financial goals. The fundamental rule of growing wealth is to invest regularly for a prolonged period to benefit from the compounding effect. I would recommend PersonalFN's SMART Fund Explorer, which can help you plan your mutual fund portfolio smartly to achieve your financial goals. It provides a list of the best suitable mutual fund schemes recommended by our research team that will help you reach your financial goals.

PersonalFN's SMART Fund Explorer will draw the return expectation to reach your goal and two mutual fund investment options (A & B) which includes investment across asset classes and market cap. You may choose either of the options based on your risk profile.

5. Delay in Retirement Planning

For women, the longevity issue is a hard reality when it comes to financial planning. The World Health Organization reports that women typically live 6 to 8 years longer than men do. The intricacies of long-term financial management are therefore more difficult for women since they need a stronger cash reserve than men do to secure their financial stability in old age. Due to a number of barriers specific to women, the process of saving and investing money that they may need in their golden years can be delayed or derailed.

Thus, it is essential for all, especially women, to begin retirement planning early in life if you want to live a stress-free life of leisure in your golden years. Creating a retirement corpus is a long-term financial goal spanning over decades. A retirement calculator is a tool that makes it easy and relatively simple to plan for retirement. PersonalFN's Retirement Calculator is one of the most valuable online tools. Once you have calculated your retirement corpus, smartly plan to invest in worthy mutual funds that can help you attain your targeted retirement goals.

6. Increased Debt-burden

Ask any woman her priorities, and she will rank family and children at the top. Women with high debt burdens caused due to home loan, education loan or excessive use of credit cards are unable to save surplus from their income to invest for a secure financial future. Having debt is not bad, but not being able to repay it on time is harmful to your financial health. You may have borrowed a loan, but ensure you make timely repayments and maintain a good credit score for future eligibility for any borrowings.

Women love shopping, and many financial institutions consider this as an opportunity to offer credit cards with special discounts on various purchases or events like Women's Day. Do note that you may end up falling prey to debt traps as credit cards charge a very high rate of interest. You must ensure that you pay off your debt burden with the help of the snowball or avalanche method as early as possible and maintain a debt-to-income ratio of below 40%.

7. Inadequate Financial Literacy

A common factor underscoring most women in India for their financial planning is that they leave decisions to the male members of the family. This is mainly due to a lack of financial literacy amongst women. Also, all the above-mentioned barriers are somewhat related to the inadequacy of financial knowledge. Hence, women who lack financial literacy are less confident in their ability to manage their cash flow and are less likely to take financial risks.

You see, nervousness about investment and financial decisions makes women less likely to achieve financial independence. Women often avoid volatile financial situations for fear of losing their investments, wasting their time, or causing loved ones to suffer. However, healthy risk-taking and money-management skills are crucial for everybody. To at least gain a basic understanding of personal finance and boost their confidence in money management, women should start by reading financial newspapers, journals, web portals, etc. In addition, there are several online e-course that provide adequate financial knowledge in the comfort of your home.

Therefore, this International Women's Day take a pledge to enhance your financial literacy and overcome these barriers that derail your financial planning to attain a secure financial future.

Wishing You All a Very Happy Women's Day!

MITALI DHOKE is a Research Analyst at PersonalFN. She is an MBA (Finance) and a post-graduate in commerce (M. Com). She focuses primarily on covering articles around mutual funds including NFOs, financial planning and fixed-income products. Mitali holds an overall experience of 4 years in the financial services industry.

She also actively contributes towards content creation for PersonalFN’s social media platforms in the endeavour to educate investors and enhance their financial knowledge.