Essentials Of Financial Planning For Women

A recent study conducted last year by a leading financial institution revealed that currently in urban India only 13 percent of urban women are confident about the adequacy of their financial plans.

Other startling figures show that 42 per cent of educated urban women having only a basic plan in place that falls short of covering all long term goals for women.

Essentials Of Financial Planning For Women

In this day and age gender equality where financial security is the key to independence these facts indeed comes as an unpleasant revelation.

There are several sociological reasons behind a women's reluctance to take up financial planning. For starter's there is the general perception that money and money matters is a man's domain and women are best kept away from it.

There is also a slight hesitation that creeps in when women are surrounded by financial jargon leading them to disengage from the conversation.

It's high time these perceptions are shattered. A woman's need for financial planning is equal to a man. In fact, a women's financial situation is unique.

While a man's financial aim is wealth accumulation, women tend to focus on the financial security of their children and themselves. Besides financial goals, a woman's money related needs are very different from that of a man.

For example, a women's genetic and biological makeup makes her vulnerable to specific medical and health situations causing financial drain.

Then there is the weight of our social make-up where events like a pregnancy comes with its own share of financial changes. It isn't uncommon to see women opting out of career and settling down for low paying jobs to balance career and motherhood.

It's also often seen that mothers often take prolonged leave of absence from their careers to take care of kids or ageing parents that may deplete their income source.

All these factors dissuade sound financial planning for women who, in actuality need a larger corpus then men because of their higher life expectancy and shorter career span.

Women need to speak up and clarify their doubts with the help of a financial planner and start educating themselves with the basics of investing.

Saving systematically comes naturally to women which enables them build up an appropriate fund as long as they have a disciplined approach towards it.

By following a series of steps towards financial planning, women can build an asset that will make them self reliant and independent.

Have a plan

Build a financial plan but listing your incomes and expenses and also putting in place your expected income in the future.

This will help you chalk out your financial objectives. Factors like time, risk appetite and liabilities also play a key role while shaping the financial plan.

Also, it is said that financial planning must start with the beginning of financial year because it is very tough to catch time of you lag behind.

Knowing your assets and liabilities early always pays you off as you can pay off your debts early and build on your assets. Women must pay off their costly and expensive debts first of all after studying financial records.

Choose your investment instrument

Choosing the right financial instrument is the key to success for your financial plan. If wealth creation is your goal then you can use instruments like equity, MF's, ULIP's, Pension plans or debt instruments like bonds, G Sec and PPF.

If you need financial protection then go for life or health insurance plans. Investing in ELSS, PPF and tax saving bonds will help you reduce your tax burden.

The great thing about financial planning is that a woman has several investment avenues to choose from. At any stage, an asset allocation approach is the ideal way to invest, since a well constructed and diversified portfolio reduces risks and ensures smooth returns.

Women should also look at building a contingency fund so that savings can continue even in case of unforeseen circumstances like illness, death of spouse or loss of job. 

Because women are more likely to have work disruptions for care giving, they need to capitalize on savings opportunities while they are working, in order to compensate for a longer average longevity.

Tax planning

This is another aspect of efficient financial planning. Saving tax acts as double sword as it helps to reduce tax outgo and saved tax can be utilized in order to pay debts.

Moreover, investments done under section 80 C like life insurance and health insurance also provide risk cover and products like ULIPS help to grow your wealth.

Tax planning must not be postponed to the end which is usually the case for an individual which results in hasty investment decisions just to save tax.

Further, wrong investments does not generate returns correlate to your financial goals and an individual generally end up at the wrong side.


Sound financial planning is completely dependent on discipline. Luckily, living in the day and age of technology, managing your finances are easy and can be done online or with the help of a financial advisor. While you stay disciplined to your investments, make sure you take the time to understand the nature and associated risk of each investment instrument, before investing. 


Reviewing you investments periodically is an important step on ensuring you stay on the financial course you chalked out for yourself.

Review your investment in line with increased income or expense, new assets or liability acquisitions or changing market conditions.

Finally, as the milestone you have been saving for approaches near, you would need to redeem your investments.

At this junction, it would become important to sit down with your financial consultant and understand if there is any taxation issues involved with the redemption of your investments.

Author: Yashish Dahiya, CEO & co-founder,

Story first published: Saturday, May 31, 2014, 10:17 [IST]
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