Arpita Roy Karmakar, 38, lives alone in Mumbai and is single. She has no other extended family to fall back on. Although she enjoyed her independence in her 20s and 30s, busy building a career and spending time with friends, it’s only now that she feels the burden on her shoulders to manage her finances on her own- same.
“Lately I feel the pressure of having to deal with everything on my own. Sometimes I feel helpless and tired. I wish there was someone to help me. I also sometimes worry about whether I would have enough money to take care of myself all my life,” laments Karmakar with a wry smile.
Additionally, she adds that the lack of financial knowledge in her twenties has made her life more difficult now. “Now I realize how important financial literacy and awareness is. In my twenties, there was no one to guide me in financial planning. Therefore, I now find it difficult to apply for a bank loan to buy a house or planning other such important life milestones for which we need a big body,” she says.
And she is not alone. Today, many women live independently in India, just like in the United States. According to the latest report from the Office for National Statistics (ONS), the proportion of single women has increased from 13.5% in 2011 to 19.9% in 2019.
The ONS survey also found that the age of marriage has increased over the years. There was a significant reduction in women’s age at first marriage in the 25-29 year old cohort, as only 52.8% first married at age 20 in 2019-21, against 72.4% in 2005-06. This shows that these women are alone and the sole financial decision makers in their household.
Increasingly, it is clear that single women are having difficulty managing their finances. So if you’ve never been married and are at a disadvantage in terms of immediate family support, it’s absolutely essential that you do sound financial planning for your personal and financial security.
Here are 5 key strategies to help you protect your future financially and gain peace of mind:
Budget expenditure: First of all, you need to budget all your expenses. You should keep a diary and record all your expenses. You must carefully consider all your money flows. According to Shweta Jain, financial planner, CEO and founder of Investography, a financial planning company: “Expense budgeting is extremely important because it is tempting to spend money and hard to save. You should also set aside an emergency fund for at least six to nine months. because single women often take longer to find the next job or recover from a crisis.”
Invest as much as possible: Women generally have less retirement savings than men. Therefore, it is essential that you start investing in retirement funds first. Then, if you have a discretionary fund, start investing for other goals, like buying a home, planning a trip, or starting a business, among others. “You can also think about starting a long-term SIP or starting a SIP for an emergency fund and keep at least eight to 12 months of spending in that fund,” Jain adds.
Also, understand what you plan to achieve with your money. “Just because you’re a woman doesn’t mean you don’t have to worry about your financial goals. Invest in growth assets like stocks rather than keeping money in FDs and gold,” says Renu Maheshwari, CEO and Senior Advisor, Finzscholarz Wealth Manager. , and a registered investment adviser with Sebi.
Insurance is essential: Good health insurance and critical medical coverage will prepare you for the unexpected, such as a sudden accident, disability, long-term illness, or terminal illness, all of which require good financial planning. You should also opt for disability, life, covid and long term care insurance. Later in life, when you may not have a friend or family member to take care of you, all of these assurances will be used. If any of these coverages are offered by your employer, you should take full advantage of them. If you already have some, you should review your coverage and make sure you have enough to meet your potential needs. Otherwise, you may need to increase your coverage.
Develop a good succession plan: Estate planning should be taken very seriously by single women, especially when creating their own wealth. “Laws of inheritance are still not neutral. For example: if a childless widow dies without having made a will, her wealth will go to her husband’s heirs and not to his side of the family. So if you win and create of wealth, make sure wills etc are in place for a smooth succession,” says Maheshwari.
Also, in case you fall ill for a long time or become disabled for any reason, there should be someone to take care of you financially on your behalf and make all critical financial decisions. Therefore, you must add beneficiaries to all of your financial accounts. When you are in better health now, you must designate someone to take care of your affairs in case it is necessary.
Improve your financial knowledge: When you are completely on your own and you may have to stay that way, you need to improve your financial acumen and knowledge. Find out as much as you can about financial terms and ideas on the internet and in books. Talk and discuss financial topics with knowledgeable friends. Be bold in asking silly questions about financial topics if you need help understanding something. It is essential to increase your financial literacy and to make wise financial decisions and choices.