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Financial planning is a step by step approach to create the strategy for different financial goals you have at present. It covers various aspects like understanding the cash flow (income and expenses), optimizing savings, checking the asset allocation, reviewing investment portfolio and insurance cover. All those who earn income and have financial goals should have a proper financial plan in place. Women are natural savers and financial planners as well because they plan and execute the monthly household budgets in the best possible manner.

Their approach towards savings and managing overall finance is very disciplined too. Hence, working on the financial plan is a much easier task for a woman.

Creating a platform for Financial Planning

To begin with, you can evaluate how much is the potential to save every month by closely looking into your income and expenses for the last three to six months. At the same time, it is equally important to check where your money is saved or invested so far.

As a next step, you can evaluate your financial goals along with the timeline and amount you need for each of these goals. This can set a good platform to start with Financial Planning efforts as the next step will be to create an investment strategy for your financial goals with the help of the monthly surplus
and existing investment.

Starting Early

Starting early will always work for you because it can give more time to your savings and investments to grow. At the same time, you will have to invest a lesser amount compared to someone who starts at a later stage. It is good to begin with financial planning and having a well-worked out plan at the early stage.

You should not be much worried about future changes in life as most of the financial plans are
flexible and are capable of making changes based on any life event. Even from an investment perspective starting early can work in your favour.

Let us look at an example if a lady wants to create a corpus of Rs 50 lakh by the age of 45 years and if she starts investing from the age of 30, she has to invest Rs 12,500 every month for the coming 15 years to reach this goal.

If she starts investing at the age of 35 or 40 years, she will have to invest Rs 25,000 or Rs 65,000 per month respectively.

Avoid making these mistakes while working on your financial plan

• Try to be conservative and refrain from following an aggressive approach at
the time of planning.

• Avoid assuming very high returns particularly in the case of equity and real
estate assets investments.

• Do not park more than the required amount in the bank account or fixed
deposits.

• Do not delay in the implementation of the financial and investment plan.

Some of the key steps on financial planning for women at different stages:

Single Women

• Review your cash flow (Income & Expenses), there could be some more scope
for saving and investing at this stage.

• Many women like to take care of their wedding expenses independently, for
such objectives it is better to invest in short duration debt funds or instruments
depending on the time horizon.

• Look for investment options that are long term in nature if your goal is to create
wealth over a period.

• Working single women should also consider taking life insurance for
themselves and health insurance for their parents even if her company cover
them in group insurance.

Married Women

• Actively participate and observe family’s cash flow

• Evaluate and work on different financial goals along with your spouse and
family.

• Take part in the entire financial planning efforts and encourage the family to
follow the disciplined monthly investment for different financial objectives
Divorced or Widowed Women

• Ensure adequate contingency fund is always in place for your family

• Take proper life and health insurance for yourself to ensure the financial safety
of your dependents

• Create a proper investment plan to take care of regular expenses and different
financial goals.

• Work on a retirement plan to ensure an independent retired life

Working Mother

• Always have sufficient life and health insurance in place

• Avoid keeping more than required money in the bank account or fixed deposits
instead make your money work in a better way by investing in the right
instruments.

• Work on a debt repayment plan if you have any kind of liabilities like a home
or vehicle loan

• Evaluate and create an investment plan for your retirement and child’s
education

(The author co-founder MyWealthGrowth)