Financial Planning for Working Women?

September 25, 2015, Chennai

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Rakhi became my client after attending one of my ‘Women only Workshop’ on financial planning and portfolio management.

 
Rakhi is one of the new age working women who are not only earning but also taking professional help to realise their financial goals which may be slightly different than the husband. She and her husband are contributing equally to the household expenses. They want to buy a house, raise their daughter and Rakhi also wants to take a break to have a second child. She needed help to understand where they stand financially and what actions should they take to make these goals achievable. Both husband and wife are also supporting their respective parents for medical expenses. A typical six step financial planning process that wealth manager’s suggest to a working male should suffice Rakhi too! Why is it that we often hear financial planning for working women as something different from men!
In my experience three major factors contribute to the necessity of different approach towards money management for men and working women. 
1. Working women have a different career life cycle than men. They have ‘M-shaped’ career curve. Women start out strongly in early 20s, encounter family responsibilities towards early 30s, which makes their career progression take a dip and then pick up again in 40s.It is in contrast to men growing linearly in their careers and abruptly stopping at retirement. This results in a special need to manage their finances during the dip of their career which may coincide with the maximum expense stage of family.
2. Statistically women live longer than men; giving a longer time to be lived in retirement without active earnings and in all probability, a substantial part without the male partner to help her manage the finances.
3. And the biggest factor ‘Men are from Mars and Women from Venus’. Women perceive and comprehend money differently owing to evolutionary, sociological and psychological aspects. In fact this may be the single biggest factor contributing to the recent statistics of  80% working women not making their investment decisions.( Source: Neilson  )
For a fulfilling and peaceful life working women should keep their financial life uncomplicated and stress free. More complications may not necessarily mean higher returns. A simple step wise process will go a long way in achieving this goal.
1. Educate yourself: Attend a money management workshop and familiarise yourself with money matters. It is no rocket science.
2. Understand your relationship with money: What do you want your money to do for you? Do you need it to run the basic family expenses? Or is it a secondary income in your family and you want to achieve personal financial freedom with it? Or is it a source of indulgence for the family?
3. Identify your financial goals: Be objective and realistic.
4. Find an adviser: Make sure your adviser understands your emotional and financial needs. It is critical that your adviser is competent, objective and unbiased in his / her advice. Now SEBI regulates the industry and all consultants advising the clients on investments and money matters should be registered with SEBI as an Investment Adviser. Ask your adviser for his credential and his/ her source of income. SEBI Registered Investment Advisers are not allowed to earn commissions and brokerages by selling mutual funds or insurance policies to you.  
5. Work alongside your adviser: At the end of the day it is your money. Stay in close touch with your adviser as you would with your family doctor. If you find money management as a mundane chore adding hassles to your already burdened life, think of it as a part time job, which will provide higher returns to all aspects of your life with an investment of less than an hour per week.
The author Renu Maheshwari, Co-founder of Finscholarz, is a SEBI Registered Investment Adviser and has been in the field for over a decade. She can be reached at renu.maheshwari@finscholarz.in
 

Rakhi became my client after attending one of my ‘Women only Workshop’ on financial planning and portfolio management. 

Rakhi is one of the new age working women who are not only earning but also taking professional help to realise their financial goals which may be slightly different than the husband. She and her husband are contributing equally to the household expenses.

They want to buy a house, raise their daughter and Rakhi also wants to take a break to have a second child. She needed help to understand where they stand financially and what actions should they take to make these goals achievable.

Both husband and wife are also supporting their respective parents for medical expenses. A typical six step financial planning process that wealth manager’s suggest to a working male should suffice Rakhi too! Why is it that we often hear financial planning for working women as something different from men!

In my experience three major factors contribute to the necessity of different approach towards money management for men and working women. 

1. Working women have a different career life cycle than men. They have ‘M-shaped’ career curve. Women start out strongly in early 20s, encounter family responsibilities towards early 30s, which makes their career progression take a dip and then pick up again in 40s.It is in contrast to men growing linearly in their careers and abruptly stopping at retirement. This results in a special need to manage their finances during the dip of their career which may coincide with the maximum expense stage of family.

2. Statistically women live longer than men; giving a longer time to be lived in retirement without active earnings and in all probability, a substantial part without the male partner to help her manage the finances.

3. And the biggest factor ‘Men are from Mars and Women from Venus’. Women perceive and comprehend money differently owing to evolutionary, sociological and psychological aspects. In fact this may be the single biggest factor contributing to the recent statistics of  80% working women not making their investment decisions.( Source: Neilson  )

For a fulfilling and peaceful life working women should keep their financial life uncomplicated and stress free. More complications may not necessarily mean higher returns. A simple step wise process will go a long way in achieving this goal.

1. Educate yourself: Attend a money management workshop and familiarise yourself with money matters. It is no rocket science.

2. Understand your relationship with money: What do you want your money to do for you? Do you need it to run the basic family expenses? Or is it a secondary income in your family and you want to achieve personal financial freedom with it? Or is it a source of indulgence for the family?

3. Identify your financial goals: Be objective and realistic.

4. Find an adviser: Make sure your adviser understands your emotional and financial needs. It is critical that your adviser is competent, objective and unbiased in his / her advice. Now SEBI regulates the industry and all consultants advising the clients on investments and money matters should be registered with SEBI as an Investment Adviser. Ask your adviser for his credential and his/ her source of income. SEBI Registered Investment Advisers are not allowed to earn commissions and brokerages by selling mutual funds or insurance policies to you. 

5. Work alongside your adviser: At the end of the day it is your money. Stay in close touch with your adviser as you would with your family doctor. If you find money management as a mundane chore adding hassles to your already burdened life, think of it as a part time job, which will provide higher returns to all aspects of your life with an investment of less than an hour per week.

The author Renu Maheshwari, Co-founder of Finscholarz, is a SEBI Registered Investment Adviser and has been in the field for over a decade. Visit www.finscholarz.in for more details.