A Financial Planning Guide For Women

By | February 21, 2019

In an earlier, best-forgotten era, women were pretty conservative when it came to investing. But today, women are looking at all possible avenues to enhance their returns. Here are some of them.

A financial planning guide for women

With more and more women taking responsibility for their earnings and investments, the incorrect perception that all women are shopaholics and bad investors could well be a thing of the past. With inflation and taxes eating up a chunk of one’s salary, double-income households are more the norm today. So, women have become savvier about savings, taxes, and investments when compared to a decade ago. After all, savings alone are never enough to meet a family’s financial goals. One needs to invest in order to get the best returns and the investments should be linked to goals.

Additional Reading: Don’t Just Save, Invest

Women, in fact, need to plan more compared to men because they have more breaks in their career. This includes breaks when they have a child and some women even take a break to take care of the elderly. Many women also pay for their own weddings. So, some planning is needed for this too.

Women need to master the art of investing, in order to stay financially independent, and also to ensure that their goals are always in line with the family’s goals. So, is there an age where women should start looking at investments? Actually, there is no particular age to start saving and investing. The earlier you start, the better it is. This holds true whether or not you’re a woman.

In Your 20s

In their 20s, women choose their career path which sets the tone for their future. Equities can be a good investment choice in your 20s, as you can take more risk when you are young. You can choose to invest in Equity Mutual Funds for your long-term goals as Mutual Funds give you the benefit of professionals managing your money. You also need to take a suitable Health Insurance plan at this age. This will take care of your medical emergencies. In addition, you must make sure that you have sufficient Money Market Funds or Liquid Funds to help you during emergencies. In a way, this is the right stage to decide your long-term goals. Plan in such a way that the long-term investments that you make give you good returns at the right time.

In Your 30s 

At this age, women are usually married and might even have children. They have the additional responsibility of caring for a family. However, women must remain invested in Mutual Funds and should also hold Life Insurance policies. One Life Insurance policy for each earning member in the family is a must.

It is also important to invest for your children’s future. Mutual Fund Systematic Investment Plans (SIP) are a good way to start. You can, of course, choose the Sukanya Samridhi Yojana, if you have a girl child. And you can choose to invest in real estate too. However, it will be prudent to buy a home to live in before investing in real estate. Taking a joint Home Loan will give you higher eligibility. Some banks also give concessional interest rates to women. Make use of this.

Another important point is that some women buy gold jewellery as they consider it to be a good investment. Gold jewellery doesn’t have great resale value because of wastage and other charges. Investment in gold should always be in the form of coins or bars. You could even invest in gold Mutual Funds.

In Your 40s

In your 40s you’re probably thinking about funding your kid’s higher education. If you think you haven’t saved enough for it, consider an Education Loan. This loan gives you tax benefits under Section 80E of the Income Tax Act. If not, loans against property or Fixed Deposit are a better option. These come at a lower interest rate. However, never use your retirement savings to fund your child’s education because it will be difficult to rebuild those savings. Once you have used your savings to fund some of your goals, the money you were using to save for these goals should be redirected to your retirement savings.

Check This: Retirement Savings Calculator

In Your 50s

As you near your retirement, you should start moving some of your risky investments to safer avenues such as Debt Mutual Funds. But don’t give up investing in equities yet. Inflation will have a huge impact on your savings once you retire and equities are the only investments that can save you in the long run. Ensure that you have set up different income sources so that you don’t run the risk of low returns from one income source.

You can consider investing in Senior Citizen Savings Scheme (SCSS) once you retire. This is offered by the post office and is considered safe and stable. You can extend your Public Provident Fund too.

Additional Reading: Best Ways To Invest After Retirement

Choosing the right investment options at the right age will help keep yourself and your family financially secure.

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.
Category: Financial Planning Investments

About BankBazaar

BankBazaar is the world's first neutral online marketplace for instant customised rate quotes on Loans, Credit Cards, Insurance and Investment products. Shop for financial products just like you buy everything else now - online.

Leave a Reply

Your email address will not be published. Required fields are marked *