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It’s time to break the bias in financial advice: Women’s role in Managing Finances

Women are increasingly taking up positions of higher authority in MNCs all around the globe. As a direct or indirect consequence, women’s role in handling household finances has grown significantly in the last decade. Various studies have found that women actively involved in the financial system had superior risk management, excellent money management skills,  smoother consumption during economic shocks, and overall household finances. Women should invest in money management techniques and skills to avoid any financial setbacks.

Women’s conditions in India have drastically improved due to increased access to education. However, when it comes to household money management, men and women are now better allies due to their ability to adapt to various expenses and unanticipated scenarios. This shift in male-female tasks explains why Indian women are now seen as more than just homemakers.

Women who invest well are extremely successful | money management

According to several economic and financial experts, women are often stronger financial investors than men. Women have traditionally benefited from this less aggressive and prudent attitude, which has led to great returns on their investments. While taking large risks can pay off handsomely, there should always be a balance between low-risk and high-risk investments.

Fortunately, Indian women are adept at conducting research, identifying risks, and exercising self-control. One shining example of this is Nita Ambani, who is at the forefront of a long list of powerful and important women who have always emphasised giving back to society & setting an example for other women to follow.

money management

Women are strategic thinkers | money management

Women are thought to be more competent in handling several responsibilities while being aware of future risks. Furthermore, although women continue to face salary equality in most sectors worldwide, this has given them a sense of security, i.e. it is more or less a fact that women are more likely to begin long-term investments and retirement planning.

But that’s not all. Many women also start thinking about retirement at a young age. However, it is still a challenge to save a good amount of money every month to help them deal with financial difficulties at any time in their lives. However, with good long term planning, money management gets easier and more fruitful. Stated below are some helpful money management tips that aid your planning:

Working Women | money management

  • If you’re a stay-at-home mom with no source of income, you’ll understandably strive to squeeze every last penny out of your monthly household budget. However, you should always put aside some money for the future.
  • You could put your money into hybrid funds, RDs, NCS, and similar products. The post office offers a monthly recurring deposit programme with a high-interest rate. Set up a systematic investment plan (SIP) to invest in gold mutual funds or SGBs if gold is your thing.
money management

Parenting alone

  • Whether you are a widow or a divorcee with children, you are  responsible for your children’s emotional and financial well-being. Therefore, you will have to plan for your retirement and your children’s education and marriage. When you’re in this situation, you’ll need to look for safe, low-risk investments.
  • If you’re still young and have experienced the loss of your other half, you still have time to consider retirement. Your spouse probably has a large term life insurance policy with you as a beneficiary. Use the proceeds to pay off your mortgage, followed by family health insurance, education preparation, and your own life or term insurance.

PPF, NPS, and balanced mutual funds should be used to invest any remaining cash and contributions from your monthly income.

  • If you’re a divorced person who receives regular maintenance and alimony, the criteria should be similar. But, of course, it’s not always easy to be able to invest a large sum in any product. Still, a SIP will suffice, especially because it fosters discipline by automatically setting aside a percentage of your monthly intake (income plus maintenance) without any conscious effort on your part.
  • You should set aside 6 months of your expenses in an emergency fund in either situation. Any EMIs you have should be included as well.

As your income grows, you should shift your focus away from your family’s future and toward your own. Diversifying your financial portfolio and investing in less risky items should become the standard. Above all, you should analyse your portfolio at least once a month to eliminate risks that aren’t aligned with your financial objectives.

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