Financial Priorities of single Women-Daughters & Sisters
For a single women who could be daughter and/or sister, Financial independence is not just about being liberated; it also brings happiness and lets them live life on their own terms. Nothing else can bring the happiness and confidence that a penny earned oneself can.
In relationships the increasing equality of the sexes has helped women prove their mettle. Gone are the days when only the men of the house would work, while the women depended on them.
Times are changing and so must Society & family and all should evolve in changing family dynamics. Women have proved time and again, that they are not only emotionally strong, but are also better workers. Women these days have been acquiring enviable positions in big corporates; in fact, in every field. They are earning more, living great lives and supporting their families to a huge extent.
Economic independence gives single women a sense of pride and respect. It also teaches them the value of money and makes them feel liberated. Being on their own financially, theycould make independent decisions.
While working on your plan following factors need to be kept in mind:
a) Your dependent Parents, their age, state of their health and any other dependent (like aunts, uncles etc.)
How much your parents are financially secured in terms of their finances and their needs going forward? Do they have continued Mediclaim Policies? Have they taken Mediclaim Top up plan to take care of huge medical bill in the event of medical complications? Are they financially dependent on you and if yes, how much is the gap?
b) Siblings-Brothers or sisters
Are they secured and able to manage their life, their family? Has any of them voulantered and capable to share burden of financial needs of your parents and other dependents indicated above?
Top Financial priorities
1. First, do your life planning
Life planning helps in planning for those goals that can bring meaning and happiness to our lives, instead of focusing on achieving just the monetary goals. Life planning is a process of focusing on the true values and motivations in your life and developing a life plan to achieve your personal and professional goals in life. Life Planning involves a reflective, purposeful even profound approach to goals that clarifies financial objectives as a significant subset of personal goals along with an empathic response to your aspirations and concerns. The life we have is the only life there is and we have the option to make it meaningful. But, for that, we need to understand what is meaningful to us and what is it that we really want from life. Life planning precisely addresses this. This is a new area where the focus is to find out what is truly important for us in life, what will deliver that freedom from the bondage of a humdrum existence.
As George Kinder, the father of the life planning movement says, "Life planning is financial planning done right".
For most people money is part of life while for others money is life
2. Financial Planning
Financial planning is the process of developing a personal roadmap for your financial wellbeing. The general perception of financial planning is managing one's money. It is widely considered as just managing cash flow and wealth management. Precisely the questions being asked are:
1. How much should one save?
2. How much should one spend?
3. How much money is required to survive in the future without compromising on lifestyle?
Financial planning is a far broader process covering a whole gamut of aspects other than creation of wealth. These are: protecting the wealth and value of assets including life; avoiding tax leakage by making all our financial transactions tax-efficient; and in totality ensuring that our life goals are duly met.
One aspect that clearly distinguishes financial planning from management of money is the focus on all the areas of personal financial needs of an individual which include the need for protection of wealth through insurance planning, optimising the returns on existing assets for future through investment planning, planning for the sunset years and thus covering the risk of outliving one's corpus through retirement planning and management of tax flow utilising the benefits provided by regulations through effective tax planning.
While planning for Insurance, first cover sufficient medical insurance for your self and your dependents (like your aging parents). Take Life Insurance only to take care of your dependent in case something happens to you otherwise, Life Insurance for single women, whether as daughter or as sister is meaningless.
3. Retirement Planning
Retirement Planning is essential in India as India does not offer a social security system to its elderly like the developed countries. Retirement is a process for which one has to have a proper approach and plan from all aspects. If you are a person who has opportunities for self-growth even at the retirement age and feel complete only if you are earning money or are occupied doing something substantial, do not hang up your boots.
Old age is a pleasure and should be enjoyed without the fear of disease and death. Post Retirement is the most important phase of every person as it gives freedom to lead your life in a relaxed atmosphere, follow passion and explore life.
Confucius said: “Life is really simple, but we insist on making it complicated”. Let me add that we make it complicated by our own actions and inactions.
The most crucial aspects of post-retirement investing depend on the:
· Size of the accumulated nest egg (Corpus) that you require,
· Desired standard of living and expenses,
· Life expectancy,
· Real rate of inflation,
· Returns from your investments and their tax implications &
· Risk-return profile.
Remember that mortality rate has improved and a lot more people are living well beyond their retirement age, and in some cases working years is less than the number of years lived after retirement.
4. Wealth Planning
Wealth refers to the state of being rich or having an abundance of material assets and money. Wealth measures the value of all the assets of worth owned by person, family. Wealth is determined by taking the total current market value of all physical and intangible assets owned, then subtracting all debts. Essentially, wealth is the accumulation of resources. Wealth can be categorized into three principal categories: personal property, including homes or automobiles; monetary savings, such as the accumulation of past income; and the capital wealth of income producing assets, including real estate, stocks, bonds, and businesses. Wealth provides a type of individual safety net of protection against an unforeseen decline in one's living standard in the event of job loss or other emergency and can be transformed into home ownership, business ownership. Wealth has been defined as a collection of things limited in supply, transferable, and useful in satisfying human desires.
From Asset to Wealth to Prosperity: Prosperity can be defined as an abundance of material possessions, money as well as other factors like health and happiness. It can be equal to having a good fortune. A prosperous person not only has a lot of money, and property, but he also has a lot of friends, family and stays healthy. Prosperity is the state of being prosperous or successful. Prosperity is the success and flourishing of any human.
Wealth planning is the art of structuring your wealth while building it, preserving it and is a mix of tax planning, wealth protection, estate planning
5. Estate Planning
Estate planning is the preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death. Estate planning is a process of succession planning through combination of instruments like Nominations, Wills or trusts, Family Arrangement etc. The wealth transfer plan you put in place now can create enduring benefits for the people and philanthropic causes that matter most to you.
Singles form part of a new demographic that is changing the way women are perceived in India. Single women above 35 in India are saying ‘Yehi hai right choice, baby!’, for Hindus, marriage is a sacrosanct union. It is also an important social institution. Marriages in India are between two families, rather two individuals and everyone needs family and one can’t live with puppies, and marriage brings entire support system.
If a singe women decideds to get married, what happens to her accumulated wealth?
The word ‘’Streedhan’ has been derived from the words ‘Stri’ meaning a woman and the word ‘dhana’ means property. Therefore on combining these two words we get ‘property of woman’ her ‘Streedhan’. The concept of Streedhan refers to the right of (Hindu) women about the Wealth that belongs only to them by Law. Hindu Women’s Rights to her Streedhan is protected under Section 14 of Hindu Succession Act and Section 27 of Hindu Marriage Act giving her the absolute ownership and rights over such property. She has the power to deal with her Property, both movable assets and immovable properties as per her wish during her lifetime. It is, therefore, manifest that the position of Streedhan of a Hindu married woman’s property during covertures is absolutely clear and unambiguous; she is the absolute owner of such property and can deal with it in any manner she likes-she may spend the whole of it or give it away at her own pleasure by gift or will without any reference to her husband.
The woman should make a list of all the gifts and properties received before, during and after marriage from her family (including the one earned by herself), husband’s family, friends and other acquaintances.
The woman should maintain a separate account in her name for her salary after marriage.
How should a woman plan finances after marriage?
Women should keep her finances separate from her husband or his HUF’s finances. Whatever she earns, she pays taxes and can decide herself for all she has accumulated, thus far. While she may involve her husband to plan for investment of surplus funds, Financial Advisors advises that for couple’s retirement plan, both should workout retirement plan together. Women can make her own Nomination & Will for what wealth she has. Normally women include name/s of their children in Nomination form.
Life Essentials for Attaining a Truly Wealthy Life
These Life essentials are Manners, Morals, Respect, Character, Common sense, Trust, Patience, Class, Gratitude, Love, Legacy, Sense of Fulfillment & Give Away to the causes that you subscribe to.
Money and wealth cannot purchase a:
Ø Good marriage
Ø Meaningful family life
Ø Peace and contentment in your soul
Finally, it cannot purchase the forgiveness of your sins and eternal life.
The bottom line is this – money and wealth cannot purchase the true riches of life.