Every woman wants a smooth and secure life. But often, lives changes occur due to unforeseen and drastic reasons –effects of which may be life-altering. So, irrespective of the security of their life, you, as a woman, should at the very least, arm yourself with the necessary information and tools required to manage and run personal, as well as your family’s finances.
Lack of financial know-how may leave you open monetary risks and financial vulnerability. Having adequate financial literacy will allow you to effectively plan your wealth creation, wealth preservation, wealth transfer. This will, in fact, help you in the future; especially in case of eventuality and times when you need to take care of family independently.What is the current role of a woman concerning family finances?
Historically, men have ways been the breadwinners of the family, while women have stayed at home, provided support and take care of the household chores and the people in it. This is the reason why they have traditionally always taken a back seat for all the decisions concerning the family’s finance and investments.
With the world now moving forward into the twenty-first century, more and more women have started working, thereby making them financially independent. However, most households still have the men making all their financial decisions. With the advancement of society, even this practice needs to change.Why is it important to understand and know about Family Finances?
The main reason why women need to learn financial matters and execution is that they are the ones knowing about how the money spent in various ways around the household. Therefore, they are the only ones who can contribute proper inputs for the family’s financial planning and strategies.
Last but not the least, women need to handle things independently in case of any eventuality or emergencies, such as their partners passing away or being disabled. Financial literacy gives women the confidence to navigate their lives, as well as money confidently.What are the Basics of Family Finances every woman needs to know?
Here are a few necessary things that every woman should know about her finances, its scheduling and implementation:Know Your Family’s Finances:
You should know each source of income generated as well as expenditures incurred by you and your family. Maintaining budget helps in controlling expenses and channelizing cash flow to what matters most.Personal and Financial Records Maintenance:
You need to know where your family members’ personal and financial records are. Financial know-how always requires a valid and well-kept paper trail regarding all assets and financial accounts. Hence, it is essential for you to know all the basics of paperwork, organising and maintaining records.
Personal records include Passport, Driving License, certificates, PAN card, Aadhar card, ID Cards, Licenses, employment records and more.
Financial Record includes bank accounts, trading accounts, investment records, insurance documents, tax records, Loan and repayment records, property documents, Assets records, Will & estate records, agreements, membership records, utility records, guaranty and maintenance records and more. This helps in monitoring and reviewing and gives the real sense of financial control.Debt Amount and Its Sources::
Debt is one the major factors that can affect anybody’ life, as it is essential to know how much money is owed and to whom. So, make sure you know your total debt amount, its sources, rates of interest as well as its repayment schedule and amount. These may include student loans, mortgage, car loans, unsecured loans and credit card balances. Understanding and knowing all these details will permit you to make an improved financial strategy to pay off your debts faster.Active role in the financial discussion:
Money matters are the number one reason for many fights among couples. Avoiding the topic of finance is not going to be the solution; instead, it will complicate things later. Active role in financial discussion helps in better understanding and to the informed decision. Getting involved in financial discussions and choices, you may not feel left ignored; you will not be clueless or helpless in cases of extreme emergency/ eventualities.Know your financial advisers:
Most households have a family financial advisor or a chartered accountant looking into all their financial decisions and sources, who know all the details of your family income and its consequent usage. So, if you have one, then attend any meetings your spouse fixes with them. Thus, if any problem arises, you will have the network required to manage and make all the crucial decisions regarding your finances.Access to Accounts:
Even if your spouse maintains and tracks all your accounts, ensure that you have complete access to your accounts and stay updated - whether your accounts are individual or joint. Know all the relevant account log-in and password information.Financial Literacy:
Financial literacy is the cornerstone of a successful, happy and healthy life. It ensures that you have the requisite knowledge to handle your money, accounts and assets in standard as well as extreme or emergency situations. Remember personal finance is not thought even in colleges. Who else is the best person to teach your kids about much-needed life skill, personal finance?