Personal finance management tips for women

   Women need to handle their finances differently from men. Mainly because of the  differences in the earning patterns and priorities that women set for themselves  their finances should be managed in a different manner. The basic goals of  personal finance remain the same, i.e.,

> Ability to meet daily expenses and lead a quality life

> Provide for emergencies and unplanned expenses and

> Savings for life after retirement


    However, the way in which men and women achieve these goals is different. While  men earn money uninterruptedly throughout their working lives, women often need  to take a break, especially when they have children.

    Other reasons like orthodox family backgrounds, change in location after  marriage, change in spouse's job location, household responsibilities etc can  also require women to put their career on the back burner.
 
 Percentage of savings should be higher for women
  
   We have the much debated case of Mrs. Sudha Murthy- wife of Mr. Narayana Murthy,  founder of Infosys. The couple was instrumental in building the Infosys dream.  As the business started taking shape, the couple decided that one person was  required to take care of their home and family.



    Mrs. Murthy gladly stepped aside to be the homemaker and let her husband fulfill  his dream. Cases of women going abroad on a dependent visa with their husbands  are not uncommon.

    So, if a woman earning Rs. 50,000 per month takes a 5 year break from her job  because she wants to be at home with her child, her earnings and thus savings  take a hit of Rs. 30L.

    We have not yet considered any increment in her salary. If we consider that her salary increments by 20 percent each year, her loss of earnings will come to Rs.  44.65L. That's a big number.

    Also, when she resumes work, she may have to compromise on the job profile,  position and hence salary. Therefore, the percentage of savings should be higher  for women during their working life

Retirement savings for women should also be higher

   Besides, the life expectancy for women is higher than men. So, the amount of  retirement savings for women should also be higher.

    Statistics show that, on an average, women live 5 years longer than men, earn 25  percent less during their life time and work 11 years less in their careers.

Importance of having an individual personal plan separate from your spouse

    It is important that women have a separate personal finance plan from her  family, be her parents or her husband. With changing times the need for separate  finances has increased. The rise in divorce rates is alarming. The surety of  life is also lower with increase in accidents and stress related ailments.

    If a woman handles her own finances she is well prepared to handle money matters  individually if the need arises. Knowledge of different investment avenues,  savings and expenses is important to run a family.

    A separate personal finance portfolio will prepare a woman to face financial  challenges. Also, she will not have to bear a monetary loss in the event of a  divorce.


Finance products and benefits that cater to the needs of women

    There are many products that are created for women. For example, insurance  companies have special policies for women. The country's banking system has  several products launched for the female audiences.

    Our tax system also relaxes the tax bar for women. Income up to an amount of Rs.  1.90L is not taxable for women. This limit is Rs.1.60L for men. Click to check  out a few products catering to the needs of women


A personal finance plan for women should include the following:
    Regular Income: Even when women take a break from their careers, it is a good  idea to earn income from working a few hours a day. Taking tuitions, teaching a  hobby etc are common ways to earn a regular income even when one is not working  full time.

> Keep an emergency fund. Do not touch it unless it is a real emergency.

> Save and invest as much as you can. Invest in 'high return' investments. Some
part of the savings should go in to stocks and mutual funds as they have a high
earning potential. Look for women oriented products.

A personal finance plan for women should include the following:
> Time your investments for known expenses likes children's education or
marriages

> Demarcate clear boundaries with your spouse for routine expenses. It will be
easier to determine personal monthly expenses and hence monthly savings.

> Track your savings and investments regularly.

> Have a financial plan. Save as much as you can at an early age when you have
limited responsibility.


    Assuming you plan to save 50 per cent of your income every month and wish to  invest in different investment products, you could compartmentalize your  investment into various risk categories. Click to see some risk categories for  investments

    You can change the portfolio as per your risk appetite. Life Insurance is a  must. However, it is advisable that you set aside the money for making premium  payments even when you are not working.