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Wake up and take charge: Unlocking five secrets for women to become financially savvy

, ET Spotlight|
Last Updated: Feb 12, 2020, 04.25 PM IST
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Wake up and take charge: Unlocking five secrets for women to become financially savvy
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For Megha Kulkarni, marriage turned out to be a big financial eye-opener. The Pune-based architect started working when she was 23 and in the last eight years, she work-horsed her way to the top as the chief design consultant of her firm. Her professional stability encouraged her to take the leap towards marriage last year- a decision that she says revealed her monetary standing better than anything else. After the initial euphoria settled down, Megha and her husband Ashutosh realized that they have to adjust to a whole new way of living, which included managing their money as a couple and also maintaining their individual financial independence. This was when Megha realised that despite earning a sizable package, her monetary health was not as impressive as it should have been, even after being careful with her spendings. Megha’s savings needed a major boost, which could only be attained with a complete change of her investment strategy.

Like Megha, there are many women who think they have a definite financial plan in place- only till they scratch the surface and discover the loopholes in their money strategy. This reminds us of the popular adage in the financial world that says- ‘men invest and women save.’ This stereotype strangely holds true even today when there are ample investment tools in the market to plan one’s money. To be monetarily secure in the long run, it is important for women to move beyond the realm of safe money and dip their toes into investment plans that can help their money grow. The money that is set aside as savings should only be for emergencies as they offer minimal or no return of interest. It is, therefore, high time that women move toward investing - the most systematic approach to wealth creation.

Post this revelation, Megha decided to give a complete head start to the way she was saving her pennies. The first step towards it was widening her financial horizons and looking beyond Fixed Deposits and PFs. She says, “My risk-averse behaviour played the biggest deterrent in my approach toward investing my money. In the first eight years of earning, creating an emergency fund topped my agenda and everything else was pushed to the backburner. Consulting friends and familiars working in the insurance sector gave me a ringside view of personal finance lessons, and today I have a clear strategy.”

For women looking to invest the right way, while also posing as equal financial partners after marriage, Megha has five specific pieces of advice to give. Setting these ground rules gave her monetary control like never before and made her wholistically independent.

Rule 1: Chart out a goal-oriented investment map
Having a specific goal can do wonders for a lot of things in life- including your investment strategy. Before her marriage, Megha invested money with no distinct thought in mind and that would sometimes tempt her to indulge in overspending. After her marriage and with a clear money strategy, she was able to rid off this habit. She understood the need for building a corpus keeping certain unavoidable circumstances in mind- like inflation and retirement. For this, Megha relied on conservative annuity plans that guarantee risk-free investments along with market-linked and fixed-income options that come with a part annuity. She made sure that the investments in the second category were done wisely as they possess the potential for higher returns and are tax-efficient. This clarity of thought introduced discipline into Megha’s financial planning.

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(Source: Economic Times)

Rule 2: Prioritize asset allocation
One of the first steps that women should take towards attaining financial independence is working on their risk-averse nature. Most women tend to squirrel away when it comes to investing, but for wealth to grow, diversifying one’s pool of money across different types of asset classes such as stocks, bonds, cash, equity, gold, and real estate etc is important. This makes managing risk much easier. For Megha, it was easy to choose from the various options where she was allocating her savings. She realized that there are three factors one should consider while choosing an asset class- the return that it will give, the risks that are involved, and how easy the liquidity of an investment is. At the start of her renewed financial journey, she discovered that it is always good to invest for a shorter duration in the risky methods (like stocks) and for a longer time in assets where the volatility is low. Megha particularly benefited from “HDFC Life Click 2 Wealth” which is a Unit Linked Life Insurance Plan that offers market-linked returns, charges minimally, and provides valuable financial protection to not only the insured but also to their family members. It comes with three plan options that one can choose from depending on their Protection and Investment needs- Invest Plus Option for Insurance cum Investment, Premium Waiver Option to protect milestones for dependents, and Golden Years Benefit Option for retirement planning with whole life cover. Megha says, “This scheme actually helped me build my fund money like no other plan and strengthened my financial foothold to a huge extent.”
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Prioritize asset allocation
(Source: Economic Times)

Rule 3: If married, consolidate your individual assets and liabilities
It is important to sit down and understand each other’s personal and financial goals after marriage. Reviewing them together will ensure that both partners are in sync and on the same track. For this, Megha religiously planned her asset allocation strategy with her husband, Ashutosh, taking into account how much they earn, spend, and save each month. They also calculated their investments in stocks, mutual funds, gold, property, etc to understand how much they were earning from sources other than their salary. Added to this, both of them also tried to stay away from the shackles of financial obligations like personal loans and credit card debts.

Rule 4: Prepare for retirement
The earlier one starts planning for retirement, the better is the corpus and comfort that one attains eventually. It is extremely important for women to plan for a time when their steady income will dry up and they will have to live all by their savings. Megha says that the simple act of building a retirement corpus provided her with foresight on how inflation, the increase of longevity, and rising costs of healthcare is set to affect people. This is why Megha made a list of all the rewarding plans that could generate income that exceeds her lifestyle. Today, she is a content woman watching her financial nest egg grow- quite literally!

Rule 5: Engage an investment advisor
Megha says that seeking the services of a financial advisor is one of the best things that a woman can do. While one might have a trusted ally from whom one takes regular financial advice, there is no substitute to a professional advisor who addresses the inherent biases that are often left unresolved. By taking the help of a trusted advisor, it will be easier to make investment decisions, allocate assets, and buy the most tax-efficient tool keeping in mind the ups and downs in the market.

While there are many other maxims to financial independence, these five worked wonders for Megha. Although she wishes that she had started this journey early, she has fared commendably after the investment makeover post marriage. She has now invested in some of the most popular investment options available in the Indian market currently and has developed monetary discipline like never before.

If you, like Megha, want to take that leap from savings towards investment, it’s time you take control of your finances and build a diversified investment portfolio.


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(This article is generated and published by ET Spotlight team. You can get in touch with them on etspotlight@timesinternet.in)
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