Financial Planning Steps for Single Working Women

Pritha Sarkar, 36, entrepreneur from Calcutta, has been investing in gold since she started her career. She strongly believes that it doesn’t matter how much you make, it’s all about how much you save in the end to cope with any emergency. As a single working woman, she has always focused on emergency funding. “I always calculate what my monthly expenses are and keep a reserve of at least 12-18 months as emergency funding,” says Sarkar.

As an entrepreneur, she saw losses until a big profit came about. “I’m single and I don’t have a lot of burden because I have no responsibility. However, I think we should have adequate financial planning so that we have backup all the time, ”added Sarkar.

Saving is also a priority for Tanvi Shirgaonkar. The 25-year-old senior analyst at TCS, based in Mumbai, studied commercial science and has been interested in various investment and savings options since she was at school. “My parents taught me to save from an early age. So after I got this job through a campus internship five years ago, I started saving and investing some money in fixed-term deposits (FDs) right from the start, as it seemed to me the safer option, ”says Shirgaonkar.

The latest data from the National Family Health Survey (NFHS), recently released by the government, shows that the literacy rate among urban women is 83 percent, and there are a growing number of independent working women. The data also shows that for every 1,000 men there are now 1,020 women. This means that the number of women per thousand men has exceeded the 1,000 mark for the first time. In addition, the number of women with a self-employed bank account increased by more than 25 percent in 2021 compared to 2016. This is an indication that more women are taking control of their financial lives.

“Single women will have a little more pressure to manage their finances. The number of single women is growing. Many choose to remain unmarried, and that trust comes with financial independence, ”said Priyanka Bhatia, co-founder of Women On Wealth, a financial training company for women.

Financial independence requires a solid foundation in financial planning. Here are three things to keep in mind to make sure you are following the correct process.

1. Create a backup for emergencies

Also, while single women have fewer family responsibilities, there may not be a safety net to fall back on. Hence, it is important to plan and prepare ahead of time in order to be able to handle any emergency. “The first thing that comes to mind when I think of an emergency is a medical situation. So I took out health insurance not only for myself but also for both of my parents. I also keep a separate bank account where I save an amount every month. I never touch it. It’s like an emergency fund for me, ”says Shirgaonkar. Financial planners advise keeping a backup in an emergency fund for a few months.

“Ordinarily I would suggest keeping a minimum of six to twelve monthly salaries as a buffer based on your job profile. Investments can be made in short term bank deposits, sweep FD accounts, short term cash / cash equivalents, and equity arbitrage funds. Choose a product that you understand, is safe, easy to redeem, and tax efficient, ”says Sachin Parekh, a financial planner associated with Save N Protect Financial Planners (SNPFP), a financial planning company based in Mumbai.

Sarkar has also had health insurance since the beginning of her career. “The family structure of a single woman is, among other things, an important aspect when setting up a suitable emergency fund. Just as it is necessary to set up an emergency fund, it is absolutely important to assess who should have access to the fund in the event the woman finds herself in a medical or other emergency situation. You should create a contingency plan that is liquidity and accessibility, ”added Arijit Sen, a Sebi-registered investment advisor and co-founder of Merrymind. in, a financial planning company.

2. Follow an appropriate investment strategy

The investment pattern may vary depending on the age group. Investing in FDs used to be the preferred choice for many, but gradually women are turning to other investment options. “If you are under 40, I would suggest a mix of equity and debt products, with a higher proportion of equity-based assets. Usually a 70:30 or 80:20 (ratio). Equity will help build a larger corpus, and debt will provide security. Some allocation to debt adds security when markets collapse and gives investors the opportunity to get into stocks at bargain prices, ”says Parekh.

Sarkar, who has previously chosen FDs, plans to invest in the stock market and the monthly income scheme (MIS). Shirgaonkar prefers to invest in mutual funds and the stock market as the returns on FDs are very low these days.

3. Invest in retirement

Retirement planning is a subjective process. Beyond age, a person’s life scenario is a major driving factor. “The approach of a 40-year-old widow may not be similar to that of a 40-year-old unmarried woman. Unique challenges can arise at different stages of life for single women. You need to plan for spending related to hobbies or travel after you retire from work in order to have good mental health and stay engaged, ”added Sen.

While both Sarkar and Shirgaonkar have started investing in the Public Provident Fund (PPF) as part of their retirement plans, there are more options.

“Retirement planning has two major phases – accumulation and withdrawal / distribution. During the accumulation phase, a regular or monthly investment is the best way to go. Monthly contributions with additional flat-rate investments when you receive incentives / bonuses help to reach the required corpus faster, ”says Parekh. He suggests opting for an Auto-Systematic Investment Plan (Auto-SIP) replenishment plans to increase monthly contributions.

Single working women have the independence and responsibility to look after themselves and their loved ones. A few prudent financial planning steps can ensure this both.

Comments are closed.