Women are gradually entering the ecosystem of financial planning, and kudos to the concrete steps taken by the government towards women's empowerment in India. When the society was more patriarchal, financial planning was considered entirely a man's job; however, things have improved as times have moved forward

The Economist came out with an article in 2018 that explained that if India rebalances its workforce, it would be 27 per cent richer.

As a result of our many interactions with clients across genders, we have observed that women tend to be more goal centric when it comes to financial planning than men; women also tend to be more disciplined savers. Of course, these are generalisations, and different people have different approaches to financial planning.

Irrespective of your approach to financial planning, below are a few pointers that will help you plan your finances in a more personalised manner.

As a woman, if you are new to handling your finances, these points will be especially helpful for the new financial year.

1. Allocate a portion of the portfolio to liquid assets

With the second wave of covid cases at our doorstep, along with a novel mutation, 2021 could bring several uncertainties. Whether you are planning to use your savings to facilitate purchases of new appliances or getting your house renovated, do make sure that you have enough liquidity to meet any unforeseen or unfavourable circumstances. Keep money equivalent to at least six months of your expenditures in short-term debt funds, instead of bank savings accounts. You can use products like Tarrakki Zyaada that provide potentially higher returns v/s a bank savings account; with the added advantage of instant liquidity through an investment-linked visa debit card.

2. Pay off small debts first

The debt trap is one of the most common problems faced by generations that are currently in the earning bracket. With the concept of a nuclear family becoming more prominent in Tier-2 and Tier-3 cities, people are depending more on debt funding, even when it comes to buying necessities. If your liquidity checklist permits, pay off the little loans first and prevent your liabilities from compounding. Paying small instalments for a long time might restrict your ability to invest in good avenues as opportunities arrive.

3. Buy an insurance

Insurance has gained much pace these days but there are still some clients who we feel are underinsured. If you have enough liquidity, it is always a good idea to secure your own and your family’s future by purchasing term insurance and health insurance. We have seen many cases where being insured has proved to be a huge blessing. Irrespective of your gender and what society may tell you, we advise you to consider investing in term insurance and health insurance. Term insurance helps cover your loved ones' expenses in case of an unforeseen event. Health insurance protects your savings from getting drained in the event of a medical emergency.

4. Regularly consult a good investment advisor

Advisors use their knowledge and proficiency to construct tailored financial plans that aim to achieve the financial goals of clients. These plans include not only investments but also savings, budget, insurance, and tax planning. Advisors further check in with their clients on a regular interval to re-evaluate their existing portfolio and future goals and plan accordingly.

A financial advisor will spot the inherent biases in your investment mindset and accordingly help you decide the right mix while doing goal-based investing. Financial advisors can also help to reduce your tax burden through good tax planning.

5. Building a corpus for retirement

This is especially important for women who have already taken care of their basic family needs. If you are among the majority of people who rely on their accumulated savings for contingency planning and retirement planning, you could be in for a rude shock when inflation rates catch up to you in your old age. You might outlive your savings because of increased inflation rates. What happens then? So, it is best to plan your retirement corpus with inflation rates factored in. Long term compounding has never gone out of fashion and there are many instruments available to get a good lifelong income post-retirement. After all, you want retirement to be a time of comfort and relaxation.

The author is Founder, Tarrakki