Financial independence is not just the earning capability, it is also being able to manage personal and family finances with informed decisions. Women must aim to achieve financial independence for a quality life.
Today’s women have evolved successfully in various roles of life as a daughter, wife, homemaker, mother, entrepreneur, and as a responsible citizen. Somewhere in between successfully handling all these roles managing finances have taken a back step. On most occasions, women leave their financial matters to their spouses or parents or only confine their involvement to day-to-day financial aspects of the family like managing the household bills.
Financial independence is a very important aspect of quality life. Compared to earlier days, in the current nuclear family system, it is even more important for today’s women to be level playing partners even in family financial aspects. When a woman is equipped with financial knowledge it helps her to support the family to make their dreams and goals like having a dream house, giving the best education to children and going on a world tour, etc a reality. Not just this, but it also renders her greater confidence in case of any uncertainties that may arise in a family. Moreover, the undeniable fact is that financially independent women are treated with more respect by everybody around.
Some assume that financial independence is the earning capability. No, financial independence is the ability to earn and also being able to manage personal and family finances with informed decisions. Women must take an active role in understanding and decision-making of the family’s financial planning and never let the circumstances force you to do it when you are least prepared.
Here are few steps women can start towards becoming financially independent..
Educate yourself with finance knowledge:
Unlike earlier days now the access to quality information is much improved. There are various resources like personal finance magazines, blogs, Tv programs, webinars, and workshops conducted to help you improve your knowledge in financial aspects. And financial advisors and professionals would be more than happy to support you in this regard. Having knowledge will fill you with confidence to be a part of family finances.
Participate in family’s finances:
We all agree that teamwork divides the burden and multiplies the success; it is no exception in the case of family money matters. Women have a better understanding of the family budgeting, future goals of the family, especially child education, marriage, and health needs of the elderly family members. So, the involvement of women helps to make effective financial decisions. Understand what family owns and what it owes. Ensure that you are a joint account holder on all major bank accounts and investments to manage uncertainty.
For a better understanding of the family finances, be a part of every decision making. Start investing small amounts on your own with simple investment products like small saving schemes and slowly endeavor into mutual funds and shares. When you track your investments, you will slowly improve your understanding and build confidence.
Keep yourself informed about the family’s insurance policies:
As mentioned earlier we are in a generation of the nuclear family system, we face many situations where the spouse is traveling or out of station for few months on a business trip or on-site job purposes that is when we will be responsible to take care of the family. So, women of this generation must be well prepared to support their family and also be prepared to deal with tough situations by themselves all alone if at all they arise.
The details of the insurance policies that the family members possess like life, medical, personal accident, critical illness insurance, the contact information of the agents or company help desk, and the details of the network hospitals nearby that are mentioned in medical insurance policies must be known. It is also very important to know the nominee details in each insurance policy.
Make a habit of keeping all important documents in one place either in physical form or in electronic form, so that they will be handy in case of need.
Prepare a Family budget for effective spending:
Budgeting allows us to gain control of our household finances. It takes time and commitment, but it helps us to save our hard-earned money. Make a yearly budget that has a provision for shopping for clothes, electronics when good offers are available. In general, during festive times like Diwali and Christmas, we see many stores coming up with good discount sales. Make a monthly budget and keep yourself informed about offers and discounts on grocery and food items purchases in your area. Some supermarkets provide a decent discount on grocery purchases made in the first week of every month, for fruits and vegetables, some stores have happy super discount offers on particular days of a week.
They say “A rupee saved is a rupee earned”. So spending wisely is very important. There is a taboo that women spend a lot on shopping, but many studies say that women are the most sensible spenders. When they are in charge of family finances, they stand the best.
Start a contingency fund:
Life has a habit of throwing unexpected challenges at us. The truth is that no one likes to think about situations like loss of job or disability or sudden medical issues and especially death. And certainly, don’t like to talk about it or plan for it. But the reality is, life has a mischievous habit of throwing unpleasant/challenging surprises at us. In such cases, it would be wonderful to have the extra support of a double income for the family. The thumb rule is that the emergency fund has to be equal to four to six month’s expenses and should be kept in the form of liquid money, i.e. cash, Flexi-deposits, or money market fund.
Make provision for a joy fund:
You deserve to be pampered for being the best. Make some provision for a joy fund and do anything that gives happiness like going on vacation with your girl gang, celebrating an occasion, buying the best gadget or self-care/beauty product that you always dreamt of, or maybe supporting an unprivileged child for its education as we women find Joy in giving.
The baby steps you take today will help you be tomorrow’s marathon winner in the finance arena.
Happy Women’s Day to all the wonderful women!! Let’s be proud and celebrate for what we are and let us empower ourselves to make the world a more beautiful and better place.