Mumbai-based Miral Gosalia, 29, who works as a programme manager at Cuddles Foundation, is one of the many single women in the country who are financially independent and manage their own money and life. Education, awareness and the desire to be independent has pushed the number of single women in a paternalistic country like India.
Mint recently reported that according to census data, between 2001 and 2011, there was a 39% increase in the number of single women, and the 74.1 million single women in India—never married, divorced, separated, or widowed—comprise nearly 12% of the female population in our country.
The goals of these single women don’t fit in the usual financial planning structure. In the traditional financial planning structure, you can easily identify goals based on life stages. For instance, generally you have goals such as own wedding, kids’education, buying a house and a car and retirement planning. Since the life stages are now getting delayed, the structure of financial goals have also changed especially for single, unmarried, financially independent women. Their goals and needs are very different than what it was for women 10 years ago and so are their financial plans.
Most of the financial planners say that unmarried independent women find it difficult to zero-in on a goal. “Surprisingly, the ones whom I met had not thought about any goal as such. They lived in the present. They have good cash flows that take care of their immediate needs. They live in rented apartments in Mumbai while their parents live in their native place. The parents, to some extent, are dependent on these single ladies,” said Ashwini Bidwalkar, a Mumbai-based financial planner. She recommends that they should have definitive goals.
Tanya Sachan, 25, who works as health, safety and environment manager at Travel Food Services Pvt. Ltd, said, “I want to buy a house. My parents will do the down payment for it while I will pay the EMIs (equated monthly instalment) from my salary. I also want to travel. So I will save for my travel expenses too,” said Sachan. She has started setting aside Rs5,000-10,000 for her year-end trip to one of the Southeast Asian nations.
Gosalia, on the other hand, is investing for her higher education expenses and her holiday plans. “I want to self-fund my higher education, have enough money for my vacation with friends and also save enough so that I can take a break whenever I want later in life,” she said.
But this clarity also comes from the income flow. In case of Akanksha Srivastava, a 24-year old freelance cinematographer who doesn’t have a regular income, her first goal is to earn enough to support herself.
“Till December 2016, I used to take money from home. But this January onwards I have stopped doing that,” said Srivastava.
Since Srivastava doesn’t have a regular income, her priority is to build a corpus. She hasn’t started investing yet but says she has read about mutual funds and would eventually invest in some once she has excess money.
“The top priorities for single women are old-age security, house, travel, philanthropy and legacy for near and dear ones,” said Vivek Damani, a Mumbai-based financial planner.
If you don’t have goals, how should you plan for them? “Having life objectives is important. Bifurcate these life objectives into two buckets—one where finances are involved and other where finances are not involved. Have everything on paper. Mental strategies don’t help. And execute only when you are convinced,” said Damani.
Work towards your goal
Financial planners suggest building safety nets to protect yourself from unforeseen situations. For instance, a medical emergency can turn out to be a major expense. Thus, you need to have sufficient medical cover.
You also need to have sufficient amount for your expenses in case of a job loss or any other reasons due to which you would not have an income coming in.
“Since single women don’t have financial support from a husband or parents, she needs to have an emergency fund that is enough to take her through at least 9 to 12 months of expenses,” said Bidwalkar.
Once these two things are taken care of, you can then start building your investments. “Broadly speaking, investment for long-term goals like old-age security should have higher equity allocation; medium-term goals like buying a house should ideally have about equal equity and debt allocation; and short-term goals like travel plans within a year or two should have lower or no equity allocation,” said Damani.
Things to remember
It is okay to not have a goal. But that does not mean that you do not save at all. If you do not have an immediate goal, that does not mean you cannot work for your long-term needs such as retirement, taking a break from work, buying a house or anything else that you want to.
If you are not sure about how to plan your finances, you can take help from financial planners. You should start investing early, spend less, save more and you will be more financially secure.