Women are becoming financially independent and stepping out to explore the world shoulder-to-shoulder with men. Today, they are empowered and are being offered equal opportunities. Many women successfully balance almost all the areas of their life – family, career, and household. However, there could be circumstances that might force a woman to part ways with her spouse and move on in life. In such scenarios, women are compelled to stand strong financially and emotionally to face the world.

"When I wrote Lean In, some people argued that I did not spend enough time writing about the difficulties women face when they don't have a partner. They were right. I didn't get it. I didn't get how hard it is to succeed at work when you are overwhelmed at home. I wrote a chapter titled "Make Your Partner a Real Partner" about the importance of couples splitting child care and housework 50/50. Now I see how insensitive and unhelpful this was to so many single moms who live with 100/0. My understanding and expectation of what a family looks like has shifted closer to reality. Since the early 1970s, the number of single mothers in the United States has nearly doubled. Today almost 30 percent of families with children are headed by a single parent—84 percent of whom are women".

The excerpt from the book, Option B: Facing Adversity, Building Resilience, and Finding Joy by Sheryl Sandberg, reflects a global concern.

Many women are efficient home-makers, and most times their career takes a backseat when they begin motherhood and/or when household priorities are more pressing. Most women are, in fact, the "Chief Financial Officers" of their household.

It is said that women have a longer life expectancy than men. This creates an impetus to increase their retirement kitty and prepare themselves for uncertainties, so that they can handle personal or family finances on their own at any given point of time.

This brings us to the question: what is financial freedom?

Financial freedom, in simple terms, might be the ability to earn a livelihood that enables you to pay for your expenses and live a comfortable lifestyle.

But financial Freedom is a very subjective term and is not defined by earning an income.

In today's era, it is important for every individual to be financially independent - be it men or women.

What should working women do to make the most of their financial independence?

Step 1: Develop right attitude towards money

Develop the right attitude towards money and do not shy away from taking a corrective course, if need be.

Many working women earn and save their income only to supplement to their husband's fixed income. Most do not involve themselves in the core financial planning, and so, the onus of personal financial planning significantly rests on their parents or spouse. However, considering a working woman's life is greatly altered when she is widowed, divorced, or even on a sabbatical (break), engaged with other activities in life, it is prudent to have some alternate source of income.

Financially independent women can approach a financial planner to seek an advise. This increases their self-respect and confidence. Moreover, women have their own aspirations and dreams, but sometimes depend on their parents or spouses to fulfill them.

Being financially independent, will enable you to self-sufficiently fulfill your wishes, such as doing a course to enhance your skill-sets, taking a trip with friends, buying things that you desire and so on; but a prudent approach to handle your own hard-earned money is imperative.

Step 2: Financially educate yourself

"An investment in knowledge pays the best interest" - Benjamin Franklin

So, extensively read financial blogs, journals that inform, plus educate you on handling your personal finances prudently, so as to safeguard your life's hard-earned savings from any dubious and unworthy decision.

In fact, in just three weeks you can become your own financial planner. How? Click here to know…

This will save from being misguided by unethical financial advisors and be in much better control of your personal finances.

And if you are still finding it difficult to navigate the complicated maze of personal finance, you can reach out to a Certified Financial Guardian in your vicinity, who can handhold and educate you in the journey of wealth creation.

Remember, knowledge is power.

Step 3: Write down your financial goals

"A goal is a dream with a deadline."— Napoleon Hill.

When financial goals are written down, you know exactly what you want to achieve. This helps you utilize your money wisely. Once you've written them down, divide your financial goals into smaller, realistic ones based on the time frame to achieve them.

Unless you know where you are headed, you won't get there.

So, the most important thing to do is ask yourself why you want to plan. For a married working woman with kids, the answer could be child's education or child's marriage. For a woman whose kids are already married, the desire to plan could be to set up her own business. For a single woman, it could be saving for marriage, buying a house, car, or even higher education.

You could have a variety of goals; when penning them down, you might notice that the list is a lot longer than what you had bargained for. Hence, it is important to prioritise and be certain about which goal is more important than the 7other.

Step 4: Calculate the savings and investment amount

Once you have determined what your short, medium, and long-term goals are, determine the cost of achieving them. This would probably be higher in the future than what it is worth today, mainly due to the impact of inflation. Hence, work out the amount you need to save per month to achieve these goals.

For instance, if you are 35 years old and want to retire at 60 years and assuming your monthly expenses are Rs 30,000. To maintain the lifestyle you will need a corpus of around Rs 2.85 crore on retirement (after adjusting inflation); you need to start investing Rs 15,000 per month (earning a rate of return of 12% p.a.) in a promising equity mutual fund(s) vide SIPs (Systematic Investment Plans).

And in case you are unable to save as much as you had planned, then reassess your monthly budgets. Reduce your household and personal expenses such as electricity bills, fuel costs, or recreational expenses, etc.

Goal-based planning will help you adopt a systematic approach and help you to achieve your financial goals. Remember to also have a personal life and health (including critical illness) insurance cover, apart from the one provided by your employer.

Step 5: Draw your own financial plan

Financial Planning is a process of charting a road map to achieve all the financial goals and unforeseen needs that may arise in one's lifetime.

Moreover, financial planning is highly personal. There's no 'one size fits all' approach. Hence, when you invest don't blindly deploy your hard-earned money in investment instruments with a financial planning tag. Recognise your investment objective, risk profile, financial goals, investment time horizon, among many other intricate aspects to draw an inclusive financial plan, whereby the asset allocation is set right. This will help aligning investment accordingly in the endeavour to achieve your financial goals.

Indulging in financial planning from an early stage in life, usually provides a wider time horizon for your money to grow and achieve your financial goals.

Step 6: Build an Emergency Fund

An emergency fund acts as a hedge against life's uncertainties such as medical emergency, loss of job, etc. Ideally you should allocate a minimum of 6 to 12 months of living expenses towards this fund. Make use of incentives, bonuses, liquid funds , or sweep-in-fixed deposits to invest your emergency funds.

Step 7: Monitor your financial plan regularly

To ensure that you remain on course, it is important to review the financial plan (annually or bi-annually). This will enable you to incorporate any economic or personal changes in your plan to achieve the goals as you have intended.

It is important to adjust the asset allocation in your portfolio from time to time to balance out market turbulence. For instance, you might have a large exposure to risky assets (such as equities) during the early phase of your career with a longer time horizon to realising your goals, however as the timeline to achieve your goals draw nearer, consider shifting majority of your portfolio to safe instruments (such as fixed income products). This shields the value of the portfolio from getting eroded. Remember, without a timely review of your financial plan, the chances of bidding your financial goals goodbye are higher.

PersonalFN believes that fulfilling the financial goals of any family requires the active participation of the women in the family (sister, wife, or daughter). Without this team effort from family members, the financial objectives and dreams of a household might not be realized.

It is high time that all Indian women come forward to contribute to the financial affairs of their family, become confident to take their own financial decisions, and undertake prudent financial planning for personal financial freedom.
 

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