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Are You Financially Ready For A Child?

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Is it important to be financially prepared for becoming a parent? How do you know if the time is right?

Poornima Kavlekar

How important is it to be financially prepared before you have a baby? When I asked this question to my friend, who had her first baby 10 years back, she said that these are emotional decisions and not linked to finances. When they decided to have a baby, they didn’t think much about how prepared they were monetarily. Most of us in India think along these lines. So did I, to a certain extent. While I always knew that I would be giving up my job when I had my baby, sacrificing a full- time career as a journalist and, therefore, moving from a double to a single income, wasn’t an easy process. My husband and I took a few important steps in preparation for parenthood though, which I will discuss a little later.

But, just before I sat to write this story, I chatted with a set of working women in their late 20s and early 30s, married for a few years now and fitting the profile of “time-to-have-a-baby -soon” category, to understand their take on this. And I got a different perspective. Most of them felt that they were financially ill-prepared and were unsure about their ability to support a child and other related expenses. In other words, today’s women are financially more aware, but as a consequence caught in a dilemma. “I am not sure if a single income will suffice under the circumstances as I will have to give up my job for at least a while,” was a common response.

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Women & Money – More ‘Selfishness’ Needed?

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With many women being homemakers or earning poorly over their lifetime, it’s important to work on your financial security, starting now.

By Poornima Kavlekar

“I very recently met a frail lady in her late 40s who was really desperate for a job,” recalls Saundarya Rajesh, Founder-President, AVTAR Career Creators, a talent strategy consulting firm that also offers flexi-career opportunities for women seeking work-home balance. This lady, a graduate with five years of work experience before her marriage, approached AVTAR for a flexi-career option. And she was desperately in need of one as she had been abandoned by her husband alleging infidelity! “Forget the allegation, her husband made sure that she signed over all her property to him before he sent her off packing,” says Saundarya. With no place to go, she came close to complete destitution, but was fortunately saved by a job with an NGO.

Then there is the case of Saraswathi*, wife of a well-placed government officer. When her husband remarried and threw her out, a group of elders made him responsible for the marriage expenses of his three grown-up daughters. But no provisions were made for the wife who had nothing to her name after several years of marriage. She was advised by ‘well-wishers’ against legal action, as that would jeopardize her husband’s job and the marriage prospects of her daughters. She ended up as a house-help to fend for herself.

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Plan For Your Golden Years

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Retirement planning is not an ad hoc process. Estimate your needs correctly and start building the corpus – now.

By Poornima Kavlekar

I have this vision of my retirement – my husband and me sitting in our sprawling backyard; me on a basket- swing, reading a book and him playing golf in our micro-mini 3-hole golf course in the compound of our picturesque chalet in Kodaikanal. This is our plan for our twilight years – a peaceful retirement in our home in Kodaikanal! All this seems far away as yet….But, to realise this dream scenario, we need to start planning our finances carefully, right away.

Retirement is definitely a big concern for everyone – a concern of whether the money saved is enough and how to assess how much is enough. When I chatted with some retirees on what sort of planning they did earlier in life, there was a common answer: “there weren’t so many variables in our life then.”

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Seven Money Resolutions for 2011

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Whether or not you’ve managed your money well until now, a New Year is a great time to rethink your financial planning.

By Poornima Kavlekar

The financial markets have been up and down in 2010. Inflation has been steady on its northwards journey. Rising petrol and diesel costs, among other cost escalations, have been a burden on our purse strings. On the other hand, the stock markets scaled new heights during 2010 yielding good returns for those who managed to liquidate their holdings at the right time.

With so many variables that make the money market so dynamic, having a fill-it-shut-it and forget-it policy will take you nowhere. Constantly review your portfolio and investment philosophy and set new money-related targets. And the timing couldn’t be any better.

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How To Buy Insurance

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Buying insurance is an important part of financial planning. Understand how much and what type you need before taking the plunge. 

Poornima Kavlekar
 
It’s not normal for my group of friends to have a serious conversation on a Saturday night. We just like to let our hair down and forget our weeks stress.  But the topic that my lawyer friend initiated sparked many rounds of animated discussions, bordering over argument, with my entrepreneur friend! The topic being discussed was insurance. What’s there to argue about it, you’d think. 
 
Well, what really triggered that argument was whether insurance is adequate investment or not. What started off as ‘how much insurance does one need’ ended with ‘it is a good way of accumulating wealth and part of a good retirement portfolio!’ True, to some extent, and for people with a certain personal profile. 

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From A Double to Single Income

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How to prepare in advance and plan your finances when you move from being a double income to a single income family.

By Poornima Kavlekar 

Vidya Ravikumar, 33, a marketing professional in a Chennai-based garment company was doing very well professionally. She became the Marketing Head even before she celebrated her 30th birthday. But, along with it came frequent travels, long hours and many times, weekend meetings! Even the little quality time she had with her four-year-old daughter began to suffer. That’s when she decided to give up her successful career and become a stay- at -home mom. “It wasn’t an easy decision at all, since I was an equal contributor towards the family income. But I didn’t want my daughter to grow up totally under the care of nannies,” she reminisces. 
 
For Bangalore-based Aditi Avadhani, 30, giving up her career as a Brand Services Director was a conscious decision that she and her husband took. “We planned for it since the confirmation of my pregnancy. While my financial independence is important, so was raising our baby.” 

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Teach Your Kids About Money

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Teaching your children the right approach to money and encouraging them to develop financial literacy will make it an instinct as they grow up. 

By Poornima Kavlekar
 
Kids are like sponges – they absorb things real fast. And they are living in an era of information overload. When my daughter was three, she believed that everything we bought cost Rs 10. Why? Because it was the biggest number she knew! Gradually, it stopped being Rs. 10 and she would ask, “How much did it cost, amma?”  
 
This, I realised, was because she was getting familiar with numbers and could also read the MRP printed on the products we bought. So she knew it was not always Rs. 10. And when she learnt to actually understand the value of money, it was a proud moment. Recently, she explained to her younger brother, “You want a toy bike. Why not buy the white one that costs Rs. 225 instead of the yellow one costing Rs. 250?” And my son bought that argument! 

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Saving For Your Child’s Education

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Saving for your children’s education calls for an early start, disciplined contribution and using the right mix of investment products. 
 
By Poornima Kavlekar
 
When our daughter was born 8 years back, exactly on the day I write this, we were more than elated, as every parent is. We were basking in the pleasure of having our little girl and didn’t think of anything else until she turned two. That’s when we began saving specifically for her education. We took an insurance policy from Life Insurance Corporation of India that will mature when she turns 18…in time for her graduation funding needs. But we could have started earlier.  
 
My husband and I were wiser when our son was born two and a half years later. We opened a public provident fund (PPF) account (Read, 6 things you must know about PPF), bought an insurance policy and even made a dedicated contribution into a diversified mutual fund, when he was just 4 months old. Starting early is the most important thumb rule when you are saving for your child or for anything else for that matter.

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Beginner’s Guide To The Stock Market

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Investing in equities is not rocket science or a male preserve. Here is the How, Why & When to get you started. 

By Poornima Kavlekar
 
Before I started writing on this topic, I chatted with a few friends from different professional backgrounds – chartered accountant, journalist, home maker, IT professional and an entrepreneur – about their investment philosophy. It only reaffirmed my belief that there many investors are apprehensive about adding stocks to their portfolio. 
 
There are two main reasons for this: lack of knowledge on the benefits of holding stocks, and not knowing how to go about it. The aim of this story is to orient you with the stock market basics and help you take that first baby step into the market. 

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A Profitable Joint Venture

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Money Management is no longer a male prerogative – couples must work together for best results. Here’s the Why and How. 

By Poornima Kavlekar
 
A friend once told me, “The mind boggles when we discuss investment. So I let the husband do the needful.” No doubt, the various financial product options on offer can sound intimidating. Yet, it is very important for women to get involved in managing the family finances, rather than avoiding money matters completely. 
 
Whether you are a working woman or a home-maker, you have a very important role to play in your family’s money (expenses or investments), especially in the planning stages.  And the population of women who think this way is on the rise. 

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