I handle all the finances in my home-from paying the electricity bills and children's school fees to managing savings and investing our money. Abhishek (my husband), and I mutually agreed that I would be the family's Finance Minister. Not only because I have a degree in Finance but also because I have always been a saver (whereas Abhishek is a big spender)'', Aarti, one of our clients chuckled. ''Quite honestly, it comes naturally to me. I've seen my mother and grandmother handle the family's finances and budgets with such expertise that I’ve never looked at financial planning as a cumbersome task.''

Indeed, the time has come for women to move beyond their family's savings, budgeting and basic money management, and take charge of the other areas of finances, such as investments, insurance and estate planning. Aarti is a classic example showcasing the emerging trend of women who are taking the lead when it comes to handling the family's finances.

There are several reasons why we believe women should play an active role in their family's finances.

Women tend to outlive men

Women live longer than men and thus it becomes important for women to plan their finances to avoid being left completely lost and unaware in situations like the demise of their partners. Active participation in your finances from an early age and planning your retirement will ensure that you don't have to rely on your children or relatives to help you out financially in such situations.

For this very reason it is important for women to talk about finances with their spouse. What are your life goals together? Who will pay for what? What are the assets? Who will inherit which assets? These discussions will help you plan your finances and ensure you are aware of each other's financial position in case of any untoward circumstances.

Existing experience with handling the family's finances

Women hold the proverbial purse strings when it comes to their family's day-to-day expenses and have prepared daily or monthly budgets with much ease and proficiency since time immemorial. Since, a woman is meticulous about household money decisions, it would be only a step forward for her to make investment decisions and be actively involved in planning the family's goals.

Women can excel at managing household finances by having a savings budget. You need to figure how much is the percentage you wish to and can comfortably save every month for the future. Ideally you should push yourself to save 30-40% of your take home cheque. This automatically curbs additional expenses and also helps you save for emergencies and other specific needs for the future.

Once you have a grip on your monthly budgets, you can actively participate in planning your family's financial goals. The step to begin with is, listing down goals that you wish to achieve in life. Ideally break it down for the short, medium and long term needs. The next step is to quantify your goals, put a figure to it and a year when it is expected to come up. Then you can start working towards saving for it. Keep on revisiting and revising your goals, tick them when they are done and creating new financial goals as when you feel the need to.

To ensure you invest towards your goals the best plan is investing through a Systematic Investment Plan (SIP). This will ensure money gets automatically debited from your bank account and gets invested in a Fund of your choice. In a fast-paced world with unending tasks, as a woman investing through a SIP is the perfect way to ensuring you save and invest your money regularly with minimum effort.

Maternal instincts make women prudent investors

Women are the more conservative gender when it comes to risk-taking and are more careful in their investment decisions. This not only helps a family plan its finances and investments in a more prudent manner but also safeguards the money for future goals of the family. In addition, mothers tend to make more unselfish financial decisions and always put the family's needs first. You will never find a mother who hesitates to sacrifice a long-deserved vacation for her child’s education or an expensive football kit. This trait of putting the needs of their loved ones well above their own, makes women the best financial decision makers.

Role model for children

The phrase ''Mulgi shikhli, pragati jhaali'' printed on trucks and rickshaws is something that most aptly applies to knowledge of finances as well. A woman who is aware of the family’s financial requirements and manages the budgets will also pass on her money skills to the next generation. It is important to explain to children the value of money and how much hard work parents put in to help them achieve their dreams. What better way could there be than a mother explaining family finances to her kids and making them financially knowledgeable and responsible?

Thus, women should increase their financial literacy and take charge of the family's finances. While information on financial planning and investing is easily available, reading about investments on the internet or newspapers, is not enough. Due to the mis-selling and excessive advertising done by financial institutions you may not know what information is credible and what is not.

Thus, it is advisable to hire a good certified financial planner who can answer all your money questions and guide you to make a financial plan. Beware of free advice from your bank, friends or insurance agent who call themselves your financial advisors and guarantee you ridiculous returns. You as an individual have different goals, timelines and risk appetite from your friend. What is right for your friend need not be right for you. A planner will guide you on your asset allocation, risk behaviour, make a goal based financial plan and help you stay focussed to achieve your goals on time.

(Authored by Amar Pandit-CFA, Founder at Happynessfactory.in)

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