How women can find financial happiness

I find many parallels between handling finances and physical fitness. Like you wouldn’t like to compromise on physical fitness or mental well-being, you shouldn’t compromise on financial well-being. It is imperative to make time for managing money. The hours you spent at work or your lifestyle assets will not be of help during a crisis. You can have a cupboard full of luxury items, which won’t mean much if you do not have enough to survive. It is about prioritizing what matters more in life in the long term.

The first thing to do is enrich your knowledge. In most aspects of life, you read and get to learn by trial and error. The same holds good for finances. Women are often scared of losing money and are not sure of which product to invest in. You will make mistakes but having the right person to guide you is very important. There are many videos, blogs and influencers around, but you will need someone who understands your challenges. There are many online platforms giving product suggestions, but a fee-based financial planner’s experience and judgment will be invaluable in your financial journey.

Second, motivating oneself to get started is a challenge. For years, I had all sorts of excuses to not exercise and it is only when a problem stared at me that I figured out a way to improvise. It’s better to start now rather than when hit with a complication.

Third, you need to stay committed to managing money. Fad diets don’t work nor can you get fit in a short time. Similarly, to grow wealth, you need a structured financial plan and you need to remain committed to the plan. What drives me to work towards my fitness goal is the frightful thought of worsening health. With all the responsibilities, it does get tough to manage financial goals. To keep yourself going, ask yourself what you would regret the most about your financial life if you were in a dire situation.

It is a long journey and you will only see results over time. But savour the small victories along the way. When I started my fitness schedule, I found it difficult to follow through and it was only after a couple of months, that I was able to do so. Find encouragement in small changes like saving more than before.

Four, get basics in place first. Have adequate life and health covers. Women believe they do not need these covers and insure themselves for low values. These covers are meant for uncertainties.

Five, choose right. Women ask me about traditional products like fixed deposits, insurance policies, or very risky investments like stocks and cryptocurrencies. The problem with these instruments is that the former are not tax-efficient nor beat inflation and the latter do not give returns. Basically, investors do not grow their wealth with these instruments. Sticking to some simple, low-cost investments like PPF, NPS and mutual funds works best. It is important to have a meaningful (at least 30%) equity allocation and women should not shy away from taking exposure to equities through mutual funds. A simple index fund or a balanced advantage fund would be a good starting point.

A woman’s best protection is a lot of money of her own. Start working towards having that!

Happy Women’s Day!

Mrin Agarwal is financial educator & founder of Finsafe India, and co-founder of Womantra.