Conventional wisdom has it that financial planning is the same irrespective of gender or marital status. I have interacted with disproportionately high number of single women and beg to differ. The challenges that are faced by these women are vastly different. When I refer to single women, I mean women who are divorced, widowed or chosen to remain single (my interactions though has been limited largely to divorced and widowed).
Wake up, if you can bring in the moolah you can manage it to!!
To start with, it is no cliché that women by and large shy away from taking active interest in their finances. This is the conclusion I have drawn after my extensive interactions with women regarding their money over the years. Normally the father takes decisions when you are young (as is the case for both genders), in the case of women though the baton is passed on to the husband quite seamlessly post marriage.
It is only after the separation either due to divorce or death is there a sudden need to put the jigsaw puzzle of your finances together. It is true that you have many resources to acquaint yourself with the not so complex world of personal finances. However, the ground reality is you are emotionally drained, sometimes even wrecked to be able to devote the time and attention needed to make sense of your personal finance decisions. How then should you go about putting the pieces of your financial tapestry together?
For starters get involved in every decision, not that you have much of choice!
All of what I just said is true, which possibly means you must rely on a professional help. For starters seek references from people who have done a similar exercise and have had a great experience. Look for a professional who works with many women, if they have many single women as clients, it is icing on the cake. Once you decide to work with someone and they make recommendations, always understand how they are compensated. Many times, people stop at how, what is equally important is to understand the quantum of compensation. I have come to this conclusion after seeing customer after customer coming to me with portfolios of ill-suited insurance policies and NFOs of mutual funds. Had they taken the trouble to check the quantum of compensation, they would not have fallen prey.
A professional will advise you on products which are suited for your needs after understanding your situation in depth. However, while they can give you choices, the final decision rests with you with your understanding of your unique situation. The best way to do this is to ask a lot of questions. Why this? What are the pros and cons of this product? What are its alternatives?.
This piece only tries to put in context the situation faced by single women and how to get started on taking charge of your situation. One thing you also need to remember is you get no brownie points for doing it all by yourself, seek help and advice when you can, and use your discretion. I will follow this up with a few pointers and most important areas to work on when you get started.
(The writer is a Certified Financial Planner and founder, Finwise Personal Finance Solutions. Views expressed are personal)