Financial Planning for Women: How to Get Started In 8 Steps

This International Women’s Day, as the world gears up to celebrate the contribution of women in shaping the society, we thought of doing our bit too. However, while doing our research, we realised that numerous women, be it a mother, wife, partner or a single woman, are still dependent on the men of their family for financial planning. 

As a friendly financial advisor, it’s our duty to make more women aware of the ways to reach their financial goals. So, this Women’s Day, let’s pledge to feel more empowered and be more financially independent. Take a step closer to financial freedom through financial planning. Read on to know how to get started!

What is Financial Planning?

Financial Planning is the process of managing your income and expenses to reach your financial and life goals. It involves identifying your monetary goals, creating an expense budget and allocating money for saving and investing.

In simple words, it’s a map of your financial evolution from your current financial state to where you want to reach a few years down the line. Having a clear plan will help you understand the amount you can save and invest and the amount you need for daily expenses. Financial planning helps create financial discipline and prepares you for any situation.

Why is Financial Planning Important for Women?

Women have shown tremendous leadership acumen in every field in the recent past. But, when it comes to wealth management, women still tend to take a backseat, though that trend is changing now. We have seen so many women transform from being savers to wealth accumulators, and rightfully so. Financial planning is important for women because it provides long-term financial security, gives them the confidence to make life decisions and enables them to be independent. 

Financial Planning for Women at All Stages

• Teenagers – The primary income for teenagers can be in the form of pocket money from parents, internships or freelancing. The basic step to manage your money is to identify your important expenses and your desired expenses. Add these expenses and deduct this amount from your total income. This way you will be able to calculate your savings. Pro tip- never let your expenses exceed your income. Always save a bit.
• Single Women – If you are a one-woman army, kudos to you. Whether you are unmarried, a single mother or a student, the first step towards your financial planning would be to track all your expenses. Once you know how much you can save, plan your investments in order to fulfil your short term and long term goals. It can be for paying your rent, emergency funding, kid’s education or buying a house. A proper financial plan will help you achieve everything on your own.
• Homemakers– First and foremost, don’t give up on your personal bank account. Try and save small amounts from everyday household expenses. If you get a monthly monetary compensation, even better! From this saved amount, you can allocate a portion of it to start investing. 

Yes, easier said than done. But getting started is important too. If you are not sure how to, the following tips could be of tremendous help.

8 Steps to Get Started with Financial Planning for Women

1. Set Goals
   Identify your financial goals to set up the foundation for financial planning. Do you want to own a house in 5 years? Buy a car? Go abroad for higher studies? Or, live a luxurious life? Once you identify your goal, you can start working towards it.
2. Create a Budget
   Staying within a budget will prevent you from exceeding your expenses. The golden rule of money management is 70-20-10. Meaning, 70% of your income will go towards your expenses, 20% towards savings and 10% to pay off the debt in every form. Following this mantra will eventually help you become a smart money manager.
3. Life Insurance
   You never know what the future holds for you and therefore you should be prepared for everything. Life insurance is an important investment that every woman should have. It safeguards your near and dear ones and provides tax-saving benefits as well.
4. Investments
   Rather than just keeping your money in a savings account, start investing in Mutual Funds, Gold, FD or PPF. It will help maintain financial discipline and reward you with good returns, subject to market risks. Fixed Deposits or Public Provident Fund are safer options. However, if you want to beat inflation and accumulate wealth over time, mutual fund is the way to go. You can start an SIP (Systematic Investment Plan) with AMCs (Asset Management Companies) like Navi at the initial stage with an amount as low as Rs.500.  Always remember to read and research before investing and make sure it aligns with your financial goals.
5. Government Schemes for Women
   The Government of India has introduced many schemes in different categories, especially for women. Schemes like Annapurna provide loans to women in the food catering industry,  Mudra Yojana provides business loans and so on. Read and research about the government scheme which aligns with your goals and apply for the same.
6. Maternity Fund
   In case you’re planning for a baby, allocate a part of your savings or investments to the maternity fund. This fund will help you meet the immediate expenses throughout the pregnancy and in the initial days after delivery. Schemes like Pradhan Mantri Matru Vandana Yojana compensates women for wage-loss during pregnancy. 
7. Children’s Education Fund
   Education is quite expensive these days, so it is important to create a financial plan for your children’s education. There are many child plans available to form a children’s education fund or you can simply invest in order to reach the desired amount in your children’s fund.
8. Emergency Fund
   Emergencies might come to our doorstep at any moment. It is very important to be prepared for such situations in order to avoid a financial crisis. The best way to form an emergency fund is to invest but make sure that it’s liquid, such that you can access it at any time of need. For long-term emergency funds, investing in a liquid fund is not mandatory.

Also Read: A Comprehensive Guide To Building Emergency Funds In 2022

How can Financial Planning Apps and Banks Help?

There are free financial planning apps that can help you track down your expenses and give you a heads-up. Apps like Mint, Pear Budget, Level Money, etc. help track expenses. A few apps can also set a spending limit for a user so that the person doesn’t exceed the spending budget. A PPF account or Fixed deposit is still an investing instrument and can help provide tax-saving benefits. Navi Mutual Fund can also help you get started with investing in Mutual Funds in easy steps. 

Also Read: 5 Best Money Making Habits That Can Make You Wealthier In 2022

Final Word

There’s no right time to start financial planning. It’s never too late either. Being financially independent and secure plays an important role in the choices you make at every stage of your life. Use the tips for financial planning for women and work towards growing your wealth and living a fulfilled life.