What is the first word that comes to your mind when you hear the words 'financial planning'? For most men reading this article it could be pertaining to planning the finances for the welfare of his family and most women readers would think how their husbands or fathers are managing their monetary affairs. It is unfortunate that very few women consider learning about financial affairs and managing their own finances vital. However women face various risks which are subjective in nature. For most women, career takes a backseat when they enter motherhood or when the domestic needs of her household are more pressing. While it is important to work towards your other priorities in life, planning for them from an early age can help you achieve goals and also save for contingencies.

Today, quite a few women live their retired lives alone. This is mainly because of longer life spans of women and increasing divorce cases. Hence women might have to handle their financial situation alone at some point of their lives. Although women today have started sharing the financial responsibilities of the household and have become financially independent, they are not yet financially secured. A recent survey conducted by Nielson across a few cities in India showed that only about 23% of the working women take their own financial decisions about where and how to invest, as published in a leading newspaper. It is unfortunate that despite of being financially independent, many women in India feel less confident or are not permitted to take their own financial decisions by their families.

A financial plan can empower you to accomplish what you have dreamt of achieving by charting a road map to attain all your financial goals. Women have unique financial requirements. Apart from achieving all your financial goals (such as marriage expenses, planning for retirement, etc.) you also need to be well equipped to deal with all the aforesaid contingencies. With the rising cost of living and medical expenses, you must undertake financial planning from an early age in order to avoid being helpless later.

Constructing a viable financial plan can be made easier by adopting the following steps:
 

• Define your Objectives: Unless you know where you are headed you won't get there. So, the most important thing to do while you sit down to plan your finances is ask yourself why you want to plan. Even if your husband takes care of all the household expenses you might want to financially contribute towards your children's education or towards working for your own retirement. You might also have other financial objectives such as saving for your parent's old age or buying a house or a car. Hence it is important for all women (whether married, single or divorced) to determine and prioritise their financial objectives.
   
• Calculating Investment Amounts: Depending upon what your short and long-term goals are, find out the cost of achieving them. This would probably be much higher in the future than what their worth is today, mainly due to the impact of inflation. Then you must work out the amount you need to save and invest per month so that you can achieve these goals. Do not forget, financial planning is incomplete without an appropriate insurance cover. With increasing age the problems that women face also increases. Hence without an adequate health and life cover, you are not only endangering your own life but also the well-being of those who are financially dependent on you (such as parents, children etc.). You can take the help of several online tools such as retirement calculator, HLV calculator, etc. to determine the amount that you will need for meeting various financial requirements (such as retirement corpus, insurance cover etc.). Such a goal based planning will help you to get a clear picture of how a systematic approach can help you to achieve your financial goals.
   
• Saving: Once you have determined how much you need to save per month to meet all your goals, you need to start acting upon it. However, in case you feel that you are not able to save as much as you had planned, then have a look at your monthly budgets. Reduce your household and personal expenses such as electricity bills, fuel costs or recreational expenses etc. If the gap is yet large than it would be prudent to find an additional source of income along with your on-going job. If it still seems impossible to save that much than you must consider revising your goal realisation date or altering your objectives. For example, if you were planning to retire at 60, consider retiring at 65 instead, giving yourself more earning years. Or consider reducing the goal corpus that is required. For instance, if you wanted to buy a house for 75 lakhs, consider a house for 60 lakhs instead. Only having realistic goals will lead you to achieving them.
   
• Preparing an Investment Plan: Saving your money alone cannot help you achieve your goals as the inflation bug eats into your hard-earned money every single day. Hence even if you save the appropriate amount every month and keep it in a locker, it will not be adequate by the time you actually need the money. To fight inflation and to make your savings grow you need to start investing. Depending upon your risk appetite and risk tolerance level, you must determine your investment avenues. It is also prudent to diversify your investments across different asset classes (equity, debt, gold etc.) and imbibe an appropriate asset allocation plan. While equity instruments can give the required boost to your investment value, debt and money market instruments will protect the portfolio value from getting eroded during uncertain market conditions.
   
• Executing the Plan: Procrastination or delaying this process will cost you dearly. The earlier you start saving and investing the lesser will be your monthly instalments. In this step, all the investments and insurance options that you have outlined in your investment plan have to be brought into action. This process involves filling in all the investment and insurance application forms with accurate information. Giving inaccurate information on these forms could lead to the rejection of your application or insurance claim at a later date. Remember, financial planning also involves planning for your estate. Estate planning ensures that your assets, both physical and financial, are inherited by the people to whom you want them to be transferred to when you are gone. Hence it is important to appoint a nominee across all your investments, bank accounts and insurance products so that everything is passed on to your choice of beneficiaries.
   
• Reviewing the Plan: To ensure that you remain on course it is important to review your financial plan atleast once in a year till the time you achieve all your financial goals. This will enable you to incorporate any economic or personal changes in your plan to achieve your goals as intended. You also need to adjust your asset allocation from time to time to avoid market turbulence and safe guard your portfolio value. For instance, you might have a large exposure to risky assets (such as equities) while you far away from realising your goals, but as your goals draw nearer you must consider shifting majority of your portfolio to safe instruments (such as fixed income products) to shield the value of the portfolio from getting eroded. Remember, without a timely review of your financial plan, you are most probably bidding a goodbye to your financial goals.
   
• Redemption: As the event you have been investing for, is upon you, you need to redeem your investments. With a mutual fund investment this involves signing on the redemption slip. In case of a life or health insurance policy, it involves submitting the policy and other relevant documents to the insurer and following up for the maturity proceeds. You also need to understand and plan for the taxation issues involved with the redemption of your investments.
   

We understand that outlining a financial plan, determining the monthly investment amounts, investment avenues, and reviewing the plan, might be a time consuming process and requires certain expertise. Hence if you find yourself with no time and limited expertise to construct and follow a viable financial plan, be rest assured that investing in the advice of an expert or an experienced financial planning consultant will not be a waste of money.

PersonalFN believes that if you follow the above mentioned steps then achieving all the financial goals on your own will not be a difficult task. Also, it is important to be aware of all the investments and liabilities of your family members (husband or father) so that you never face helplessness in their absence and cannot be misled by any of their debtor or creditor. Remember that managing your own financial affairs will not only help you to achieve all your goals but will also enable you to live your life with dignity and honor.

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