Single Indian women are not rare any longer – these money management tips work for all women, but especially for those on a single income!
By Manika Premsingh
Times are changing, and they are changing fast! While many Indian women still choose to get married (though increasingly in less traditional ways than was seen earlier), others choose to live with their partners while still others simply remain single. Either way, the choice you make will have a determining impact on your finances and how you should plan them.
If you choose to remain single, it is important to be especially smart about your finances. Even if you choose not to be single, there is always a possibility of finding yourself in such a situation in the event of a divorce or untimely passing away of the spouse. The catch with these situations is, leaving aside a scenario where you are clear from the word go that you want to remain single, which many people are not, you will have a few productive years behind you already by the time you start planning.
Nevertheless, chances are, if you have been working for some time, you probably already have some savings and a number of productive earning years ahead of you as well. This is a positive place to start, and a few money management tips mentioned below should help you start thinking further on how to acquire greater financial stability:
This is the first and foremost requirement for anyone, not just single women. We are living in increasingly uncertain economic times, and it is important to ensure that you have an emergency fund to dip into whenever there is a fluctuation in your earning stream. You should not have to compromise on a certain basic level of living standards. Ensure that at every point in time you have at least 3 months of living expenses in a liquid saving instrument. Further, you need to ensure that you have health insurance and also life insurance, if you have dependants. Medical insurance is important since it ensures you will not erode your savings in the event of a medical emergency. A number of employers provide medical insurance, so you should check your employee benefits if they apply to you, though, before investing.
One way of ensuring that you have enough savings during lean periods or post retirement, particularly true if you want to remain single, is to ensure that you are regularly saving. If you are a single individual, with no financial obligations towards a family, chances are you will be at times tempted to spend lavishly. While an occasional indulgence is certainly not a bad thing, and might even be desirable, it should not come at the cost of potentially compromising long term security. A number of companies automatically deduct income for a provident fund contribution, and even if you are not covered under the scheme through an employer, you can sign up for a Public Provident Fund (PPF) scheme on your own. Major banks like SBI and ICICI actually allow you the ease of signing up for a PPF scheme online. This long term saving instrument also provides tax relief. You can get a certain amount of funds put into this saving scheme regularly, as well as for any other savings you might want to invest in. All you need to do is work out a monthly spending budget, and if possible get the bank to automatically transfer the remaining amount into savings instruments of your choice.
As a single Indian woman, it is important to be as self-sufficient as possible. This means planning not just for any emergencies or other major expenses but also for your post-retirement life. Keep this long term perspective in mind while handling your savings. Create a financial plan for your entire life-span, starting from what would be an acceptable monthly income for you, post retirement. From there, it becomes relatively simple to work backwards as to how much you should start saving from now on. You can handle your savings accordingly. For instance, if you have a PPF account, try not to encash it when you change jobs, since that can be more convenient. Also, you can make investments in other long term instruments like 10 year bonds to ensure that savings do not dwindle away regularly on maturity. Most importantly be disciplined about maintaining your savings overtime.
As soon as you know for sure your geographical base for life, and can afford to invest there, do consider buying a piece of property. The reason women should invest in property – unless you have an inheritance of property, having an assured roof over your head can bring a significant sense of security. This is particularly so these days since single people, not just women, can occasionally find it difficult to find rented accommodation in a rental market that is more geared towards families. A property also has tax benefits, besides being a potential source of income if it is rented out.
It is good to have a financial consultant who can advise you on your finances regularly in addition to the four specific points mentioned above. In this day and age financial advice is easy to find, but navigating through it can be as challenging as not having information on it. Unless you are dealing with investments yourself as a professional, you will need someone to guide you through the process of making the best of your savings and investments. There are many resources, individuals and organisations today that can help you become a more savvy personal money manager, you just need to reach out.
Even more important is to be actively involved in your own financial management. This goes for all women, not just single Indian women, who have a cultural tendency to leave the financial reins in the hands of the dominant male in their lives. Of course this is changing, and while for a married woman the family’s financial future is tied together with the husband, as a single woman you should always be in the know and in control of your finances. While someone in the family or a friend might be able to manage and/or help you with your finances for some time, over time it is the right thing to know about them yourself.
These points should help you navigate through your life journey as a single Indian woman. Even otherwise, you might want to think these over, since life is unpredictable and the least we can do is ensure our own safety and security!
*Photo credit: Carolina Chronicles (Used under the Creative Commons Attribution License.)
Manika is an entrepreneur and the founder of Orbis Economics, a research and content organisation
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