Women in our country no longer feel compelled to live in the shadow of men. There are outstanding examples of women who ventured out and have created a name and legacy for themselves in arts, sports, business and governance.
Yet when it comes to handling finances, a lot of women seem to lack confidence in their ability to manage well. However, nothing is far from the truth; women are equally good, if not better, at making sensible money decisions.
Here are 4 things you can do to help your sister achieve greater financial independence and thus security -
i. Be aware of the family's financial health
Regardless of whether she has much say in the family's money decisions or not, your sister must know what the family's income and sources are (salary/business, income from investments, rent). She must know how much life and health insurance the family has. She must know how much loan they have.
ii. Organize financial documents well
Would your sister know where to look for the insurance, investments, bank and real estate documents in the event she needs to access them? Would she know the points of contacts for each? These things may sound no great deal but, in an eventuality, having all these in place can save a great deal of hassle. Additionally, as a good practice, she should be a joint holder in the family’s savings and investments accounts.
iii. Have a financial plan for her life
A man is not a financial plan. Every woman either needs to create one for herself or be part of one. Single women need to create a masterplan that provides a sense of direction of how to steer their finances. Married women too need to actively participate in the financial planning of the family as they stand to be affected as beneficiaries. In addition, women bring in an element of discipline and focus when they are involved in the family’s financial plan.
iv. Make financial security a priority
Often in the commitment and zeal to be a good mother, daughter or sister, women let their own security be neglected. Among other things there are three important things your sister can do to ensure her financial security. Firstly, have an emergency fund to see through the difficult days when there's a temporary absence of income, without having to depend on others. This fund should be large enough to take care of your expenses for a few months until she can regain income. Secondly, invest for her retirement. This can be a common fund with the spouse for married women. Thirdly, have the husband's life insurance policy covered under the Married Women's Property (MWP) Act. Not many are aware of this provision, however, this protects the insurance proceeds from being claimed by the husband’s creditors, if any.
Finally, this festival season, as you celebrate the Bond of Protection, remember what Clare Booth Luce said about women and money, ''A woman's best protection is a little money of her own.''
(Contributed by Amar Pandit, CFA, is founder and Chief happiness officer at Happynessfactory.in )
