COVID-19 Has Shown Women Why They Need To Be Involved In Money Management
The year 2020 has been a tough year, more so for women. With the lockdown, women’s responsibilities and workload in homecare, childcare, eldercare has gone up substantially. Even with the most supportive family, women have had to multitask more. All the activities through the day just pile up, leaving little time for anything else. The lockdown has also led to women realising that they can live with lesser paraphernalia! But the biggest learning has been about their finances.
Take the case of Mita. Mita is a homemaker with two children. Life was hunky dory with a lavish lifestyle supported by her husband’s high paying job. Being in the airline industry, Mita’s husband’s salary was reduced by 80 percent due to COVID-19. Forget large expenses like international school fees and EMIs, to manage daily expenses itself is a challenge.
Mita’s husband still has a job and hence has health insurance cover. Raima, a single 30-year-old is wondering how to manage medical cover for her parents, since she has been let go off
from her job. For women gig workers, it is getting all the more difficult to get assignments and even those with steady jobs are a worried lot.
The common regret all these women have is that they did not take care of their finances better during the good times. When things are going well, one tends to forget about financial basics like saving for the rainy day or keeping EMIs low. Moreover, with lack of financial knowledge, managing during stressful times becomes more daunting.
Here are a few things that you always need to remember as a woman:
- Your money is the one thing that can take care of you during bad times. Your priority list needs to have money management somewhere at the top. This applies to all women including homemakers.
- You can do it! Yes, it is difficult to comprehend different products and with markets volatile, one is never sure whether one is choosing the right investments. Plus, family members may not be willing to teach or may end up confusing you more. Thankfully there are many reading resources available cheaply like personal finance columns in newspapers, the mutual fund sahi hai website and my VLOG wherein I am taking you through the steps of financial planning. With regular reading and involvement, you should be able to start managing money.
- Keeping Appearances is expensive. With high income comes high spending. There is no denying the lifestyle creep. But you can be smart about it. Follow the 30:30:40 budgeting rule. 30 percent towards expenses, 30 percent towards EMI and 40 percent savings. Within the expenses bucket, have a discretionary expenses budget for all the fun expenses.
- Build an emergency fund equivalent to 6-12 months of expenses. In case of a job loss or a sudden requirement, the emergency fund could be accessed.
- Build Financial security against uncertainties by having life and medical cover. Do not be dependent on the covers provided by the employer alone. Take individual covers as well. This way you are not affected in case of job losses.
- Take part in a financial planning exercise where you discuss your financial goals and work with a financial planner to create a plan to achieve your goals. While it is easy to focus on the short term, do not forget planning for retirement. Current retirees are facing a reducing interest rate environment, which means that their monthly income is going down. You need to plan early for retirement to build a sizeable corpus.
- Insta loans, credit card loans are available on tap. Stay away from loans as much as you can. No point in paying exorbitant interest of more than 20 percent when your investments do not generate that sort of return. The only loan you need is a home loan and thankfully those are available at sub seven percent levels now.
Save money and money will save you!
Mrin Agarwal is a Financial Educator and Money Mentor. The views expressed are the author’s own.