Last week I went for a mutual fund conference. I was lucky enough to get a two-minute encounter with author Vivek Kaul who was one of the speakers at the said conference. As I told him what a diligent reader I am of his editorials in Mint, he came across as a surprisingly open and curious person, especially for a random conference attendee. This in turn emboldened me enough to mention Elementum Money. He expressed some delight in the fact that a woman is taking up the mantle to talk about money and investing.
Like what happens at times, this conversation stayed with me. Especially as a reminder of one of the key reasons behind the genesis of Elementum Money being about getting more women into the fold. The fold of not shying away from money talks and actions. The fold of being a financial feminist.
As I wondered why that trail of writing had been buried in the other hubbub on the blog for some time, I hit upon some personal insight. As a person, I abhor unnecessary repetition. I start squirming when someone makes a point excessively and I don’t have an option to get away. Unfortunately, this personal quirk led me to believe that important enough things also can do without repetition which obviously is not the case.
So, as a reminder here are five personal finance must-dos every woman should ensure for herself. If you are a man reading this post, make sure to nudge and wheedle the women you love (girlfriend, wife, sister, mother, friend, colleague – relationship no bar) into embarking on this journey.
1. An individual self-managed bank account
Even in the short conversation we had, the author was quick to quip how some of his classmates from MBA days chose to only have a joint account with their husbands. I still remember his statement – pyar mohabbat apni jagah hai aur yeh apni jagah (love and all is fine but this has to be separated).”
After all, patriarchy is financial!-Vivek Kaul
Yeah, the last few words could really become a quotable quote. When he said that, it reminded me of another anecdote from a woman financial advisor. She mentioned how a friend spoke about having to get her husband’s “approval” to go on a trip with her friends. This despite the fact that she was a senior executive at a firm and did not need the husband to shell out anything. Patriarchy? Check. Financial? Check.
My father helped me open my first bank account when I was to start my summer internship. After that, I was left to my own devices to manage it the way I wished, with the route open to asking for any help I might need. After getting married too, the only change that happened was an additional joint account with my husband to put in any money for joint expenses. Couples can choose whatever money management way works best for them. Remember that with enough transparency having a mine, yours and our approach to money doesn’t hurt any marriage.
2. Invest, invest, invest
Once speaking to a friend who worked for an AMC, I was shocked to know that all investing decisions in the family were taken by her father-in-law. She expressed helplessness at this cultural practice. However if logistics or know-how are your only barrier, work on having an independently managed investment account.
Today, with literally no-barrier platforms anyone with a conscience has no excuse to not invest. If you have a PAN card and an Aadhaar card, just hop on to one of the easy mutual fund investing platforms and open an account. If it all looks like gibberish, then browse through the investing section on this blog to make your way through it. Or, ask someone whose investing experience you respect. Or an even better way would be to get an advisor. But, as a newbie I would recommend not going into direct equity straight away. It seems more thrilling, but investing is about slow, predictable growth rather than the roller coaster excitement of watching prices everyday.
It is a matter of pride to me that I have helped atleast two women, one an erstwhile minion and two a doctor friend, start on the investing path. Watching them see the transformative benefits of growing money with a balanced amount of risk has been my reward in the process.
Side note: I am working on simplifying the maze of posts on the blog for an easier path to traverse if you are looking to educate yourself financially. I should have something on this soon.
3. Term Life Insurance
Life Insurance is the cost we pay to eliminate the financial risk of losing a life. In this case, my advice is two fold. One, as a responsibility to your loved ones who are dependent on you financially, insure your life. This absolutely holds true for home makers also. There are many jobs you do daily which in your absence would involve a high monetary compensation. Hence, make sure you get an adequate term life insurance till the age you feel you are indispensable for those duties.
Second, and I know this could be tricky, but most definitely ensure that anyone you are financially dependent on (even partly) is adequately insured. Apart from that, be aware of the details or the whereabouts of the policy and the fact that you are the nominee for the same. If tragedy strikes, apart from the unavoidable emotional distress, avoidable financial duress is the last thing you want. If the person protests, try to understand the reason or yet again go to a financial planner. As part of the process, insurance planning is one of the first things they will advise and counsel for.
4. Long term Health Insurance
Two big reasons to make sure you are well covered for medical costs – longer life spans and biological triggers even for healthy specimens. Not just that. Today, there are surprising issues which creep up on us stealthily. With a well-enhanced health cover you can atleast rest easy that you can recover in comfort. You really don’t want to be in a position where you have to think twice about going in for a preventive or even life-saving process thanks to dearth of financial resources.
If you have a good, salaried job then check for the amount of health insurance coverage you are entitled to. Where possible enhance it as most big organisations offer cheaper premiums than out in the market for individuals. However, do not depend on it and make sure you have a job-agnostic health insurance cover as well. Ideally, a family floater policy works best for a conventional set-up of a couple with kids. However, enough individual policies are available as well.
5. Easily accessible liquidity
A lot of people call this the “f**k you” fund or even advise about having this as a secret stash. Unless you are in an abusive relationship or one bereft of respect, money secrets of any kind are really not a great idea.
However, having liquid cash that is easily accessible and even visible has this calming impact. Recently, I personally experience the difference it can make. As a person, I tend to go overboard with investing the minute I get any cash infusion. Some months back even when I withdrew my Employee Provident Fund after 11.5 years of corporate work life, I kept very little in the bank account and pour it all in mutual funds. Now in my entrepreneurial stint, with much little coming by way of a monthly credit, I started feeling that increasing sense of apprehension every time I had to spend any money.
That’s when I realized we all have a certain minimum threshold we need to consistently see in our bank accounts for our peace of mind. Know that level for thyself and make provisions to have it easily visible.
With small, meaningful steps we can all grow into financially sound lives. As women, we obviously owe it to ourselves. But, if it makes the case stronger, we also owe it to our loved ones. Remember what they always mention on airplanes before taking off – ensure you have your safety vest on before trying to help anyone else. Becoming financially able is your safety vest for life.
Of the above, what steps do you already follow? Is there anything else that you believe any woman must do as part of her personal finance toolkit? Let me know in the comments below.