Thirty-eight-year-old Arpita Roy Karmakar lives in Mumbai alone and is single. She has no other extended family to fall back on. Though she enjoyed her independence in her 20s and 30s, busy making her career and spending time with friends, it is only now she feels the burden on her shoulder to manage finances on her own.
"Of late, I am feeling the pressure of having to manage everything all by myself. At times, I feel helpless and tired. I wish there was somebody to help me. I also sometimes worry about whether I would have enough money to take care of myself all my life," rues Karmakar with a wry smile.
Moreover, she adds that the lack of financial awareness in her 20s made her life tougher now. "Now I realize how important financial literacy and awareness are. In my 20s, there was no one to guide me in financial planning. Hence, now I find it challenging to apply for a bank loan to buy a house or plan for other such significant milestones for life for which we need a big corpus," she says.
And she is not alone. Today, many women are living independently in India, like in the US. According to the latest report of the National Statistical Office (NSO), the proportion of unmarried females rose from 13.5 per cent in 2011 to 19.9 per cent in 2019.
The NSO survey also found that the marriage age has increased over the years. There has been a significant reduction in women's age at first marriage in the 25-29-year age cohort, as only 52.8 per cent were first married by the age of 20 years in 2019-2021 compared to 72.4 per cent in 2005-06. It shows these women are on their own and the sole financial decision-makers of their house.
Increasingly, it is clear that single women face challenges in managing their finances. So, if you have never been married and underprivileged in terms of immediate family support, it's absolutely essential for you to do robust financial planning for your personal and financial security.
Here are 5 key strategies to help safeguard your future financially and achieve peace of mind:
Budgeting expenses: First and foremost, you need to budget all your expenses. You must maintain a notebook and jot down all your expenses. You must carefully keep account of all your money flows. Says Shweta Jain, financial planner, CEO and founder of Investography, a financial planning firm: "Budgeting expenses is extremely important as it's tempting to spend money and difficult to save. You must also set aside an emergency fund of at least six to nine months as single women often take more time to find the next job or recover from a crisis."
Invest as much as possible: Women tend to have fewer retirement savings than men. Hence, it's essential for you to start investing first in retirement funds. Then, if you have a discretionary fund, start investing for other goals, such as buying a house, planning a trip, or starting a business, among others. "You could also think of starting a SIP for the long-term or starting a SIP for an emergency fund and keep at least eight to 12 months of expenses in this fund," adds Jain.
Moreover, understand what you plan to achieve with your money. "Just because you are a woman does not mean you need not worry about your financial goals. Invest in growth assets like equity rather than keeping the money in FD and gold," says Renu Maheshwari, chief executive officer and principal advisor, Finzscholarz Wealth Manager, and a Sebi-registered investment advisor.
Insurance is a must: Proper health insurance and critical health coverage will prepare you for the unexpected, like a sudden accident, a disability, a long-term illness, or a terminal illness, all of which demand proper 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 a family member to look after you, all these insurances come to use. If any of this coverage is offered by your employer, you must take full advantage of this. If you already have these, you must review your coverage and ensure you have enough to provide for your potential needs. Otherwise, you might have to increase your coverage.
Make a proper succession plan: Succession planning needs to be taken very seriously by single women, especially when creating their own wealth. "Laws of succession are still not gender neutral. For example: If a childless widow dies without writing a will, her wealth will go to her husband's heirs and not her side of the family. So, if you are earning and creating wealth, make sure that wills, etc., are in place for a smooth succession," says Maheshwari.
Also, in case you fall sick for a long time or become disabled for whatever reasons, there should be someone to take care of you financially on your behalf and make all the critical financial decisions. Hence, you must add beneficiaries to all your financial accounts. When you are in the best of health now, you must designate someone to take care of your affairs in case it is required.
Improve your financial knowledge: When you are completely on your own and might have to remain so, you must improve your financial acumen and knowledge. Read up on financial terms and ideas from the internet and books as much as possible. Talk and discuss financial topics with friends who are knowledgeable about this. Be bold in asking silly questions on financial topics if you need help understanding something. Increasing your financial literacy and making wise financial decisions and choices is vital.
