Financial planning for women: '49% of women are either not investing or unaware of their investments'

Priti Rathi Gupta, Founder & MD, LXME, a financial platform for women, believes that actively managing money gives women the power to fuel their dreams and aspirations. In conversation with Teena Jain Kaushal, she tells how she plans to bridge the gap between women and finance and create a wave of financially fearless women.

BT: How should women do their financial planning?

Priti Rathi Gupta: I wish women knew they are great at money management because they are! Women are already great at saving money, they can also efficiently invest and grow their money. It is important to take the first step; break the mind block of ‘it’s so risky’, ‘it’s not my cup of tea’, and ‘what if something goes wrong’. There’s a first time for everything! Take small steps, and chart out a financial plan with all your money goals and when you want to achieve them. Read, learn, ask other women about their financial planning journeys and then start with a small SIP (Systematic Investment Plan)! This is why we created the LXME community- a safe space for women to ask, learn and share about money management and financial planning experiences.

BT: How important is it for women to buy insurance?

Priti Rathi Gupta: The modern lifestyle and the rising stress levels attached to a dual role of a woman as a homemaker, working professional/businesswoman, and a mother, make her prone to more diseases than men. Single, married or retired, there is no good argument as to why a woman should not opt for her own insurance policy.

As per LXME Women & Money Power Report, 58 % of women had no insurance(health or life) in their name.

One way to deal with this is to prioritise your life and health insurance needs. Get vanilla health and life insurance and add riders as per your requirements. It not only protects family and loved ones but adds more financial security.

If you already have a term plan, ensure you pay its premiums timely to prevent any policy lapse. Similarly, ensure you have an adequate medical insurance plan for yourself and your dependent family members to protect your money from getting drained in footing steep hospitalisation bills.

BT: How a mother can create a portfolio for her child?

Priti Rathi Gupta: Moms are their child's biggest cheerleaders. According to the LXME’s Survey findings, 70% of moms are highly involved in their child's education And more than 25% of their income is spent on education fees. Adding to that, education costs are rising at a rate of 8-10% every year. Therefore, the first step to proper education planning is smart financial planning!

You can achieve your goal of giving your child the best education by effectively planning and managing your money. This way your child can pursue his or her educational goals without any financial limitations. Here are a few factors that you should consider: The child’s current age, admission age, the current cost of education based on the course they wish to pursue in the future, inflation rate, risk appetite and choose the investment options accordingly.

BT: Is financial planning different for men and women?

Priti Rathi Gupta: Financial Planning is extremely important for every individual, irrespective of whether they are men or a woman. When we talk about investing or financial planning as a whole it should be a gender-agnostic concept. Due to societal conditioning, financial planning, money management, and investments have been male-dominated and male-oriented. Even with women excelling in all fields of life and becoming increasingly independent, their financial planning still takes a backseat and is primarily handled by the men of the family.

As per the LXME’s Survey findings, 49% of women are either not investing their money at all or are unaware of the investments in their name. This speaks volumes about how little women are exposed to the world of investing.

Women do have differentiated financial needs; differentiated earning potential, career peaks, career breaks, longer life expectancy and a different approach and mindset toward financial planning. It is thus imperative for women to take charge of their money through smart planning and investing best suited for their needs.