Gone are the days when financial planning was done only by the men of the house. Maintaining financial health of yourself and of the family is a must. You may not be the breadwinner for the family, but your contribution does matter. Whether you are a single mother raising children, or you are newly married and expecting a child, a working mother, or a middle-aged homemaker with children, certain financial decisions need to be taken by you either independently or in agreement with other family members.
This Mother’s Day, pledge to improve the financial health of yourself, your children, and of your family.
Investment Strategies for You and Your Family
As a mother, you tend to be worried for the future of your child, fulfilling their goals in the short and the long term and eventually saving for your retirement, so that you don’t burden your kids.
Term insurance: This ensures the financial security of your children in your absence and is a primary investment on your part.
Health insurance: Medical expenses are on the rise. It is of utmost importance to buy health insurance cover for yourself and for your family. Any medical illness can eat up all your life’s savings. You should, therefore, invest in a family floater health insurance in case of a smaller family, or go for individual ones in case of larger families.
Short and long term investments: Identify your and your children’s goals – education, marriage, a family vacation and so on, and make separate baskets of investments for each of them. You may go for equity-backed investments for long-term goals and debt and liquid funds for short-term goals. You can invest in mutual funds, systematic investment plans (SIPs), unit-linked insurance plans (ULIPs) or in a mix of some of them.
Emergency funds: It is important to have liquid funds to address exigencies. As a thumb rule, you may keep three months’ salary liquid and the rest may be invested in other asset classes.
Retirement fund: As a parent, you would like to have a low reliance on your children and be financially independent in old age. You may invest in schemes like National Pension Scheme (NPS), Atal Pension Yojna and public provident fund (PPF) to save for your retirement.
Investment Strategy for Newly Weds
If you have married recently, it is high time that you start saving towards a financially secured future.
Combined funds: A portion of salaries or funds of husband and wife can be kept in a joint account and used for making expenses. The rest of the investment decisions can be shared or responsibilities split. If one has substantial investments for the short term, then the other can go for retirement planning.
Investment Strategy for Middle-Aged Homemakers
You may not have a regular income in the form of salary but that should not deter you from making investments and establish yourself as a significant contributor to the family’s finances.
Equity market: You may utilise the free time to educate yourself and step into the world of equity markets. The gender ratio in the equity market is still tilted towards male, but with the right learning and gradual practice, you can build a career in stock markets.
Financial independence is empowering and essential in life. Not only will you enlighten yourself but also be able to teach your children the art of financing right. Take an oath this Mother’s Day and manage your and your family’s finances well.
The author is a Co-founder and CEO of StockEdge and elearnmarkets