Financial Planning for a Single Woman

Sheela is a busy professional woman who is in her late 40’s. She works as the CEO at one of the leading Media Consulting firms in India. She is single and lives with her aged parents in Mumbai. Her parents receive a good amount of pension and hence are not dependant on her financially. She has one sister who has 2 kids whom she dotes on and wants to ensure that she contributes towards their education. Being single and having no dependents, Sheela leads a carefree life. She has a very demanding and responsible role. She is an avid reader and loves adventure. She would love to pack her bags and go on an adventurous trip whilst completing her bucket list which includes paragliding, mountaineering, etc.

Challenges -

One of Sheela’s major challenges was that she would quickly spend her disposable income every month. She is left wondering if she can save enough for her retirement. She wants to ensure that she is able to save some money regularly but at the same time enjoy her money as well. As a single woman professional, she is looking at investing as a way to be financially independent and take control of her money. She wants to look after herself, regardless of the circumstances and wants to ensure that she has the necessary resources for the same. She loves to be well informed, hence wants to build her financial education and, most importantly, her wealth. Returns are important, but so is long-term planning based on real, tangible goals, such as going on a long vacation, retiring at a certain age, being there for her parents and supporting the education of her nieces.

Sheela said she was being hounded by all kinds of Relationship Managers who are connected to the Banks which hold her salary accounts and a couple of telemarketing callers and insurance advisors who were trying to sell all kinds of products, including ULIPS which she definitely did not need. Whilst having a chat over coffee with a colleague, she realized that it is high time that she should look at considering a financial planner. That’s where her search for a good financial advisor began.

Sheela checked with a couple of friends and associates who said they would be more than happy to ask their advisors to set up a meeting. Being a confident and independent person, she wanted to meet a couple of them before she could settle on the one she could entrust her hard-earned savings.

Interesting was her experience with the 3 financial advisors -

Advisor 1 - A financial service representative from one of the top financial institutions - According to Sheela, he started talking down to her as if she was unable to understand more than just the basics. He did not maintain any eye-contact. He just started bragging about his firm, his software, his achievements and started throwing a few famous names saying that they are his clients….He went on to say how rich he was going to make her. She said she tried to share some personal information but he showed no interest and just kept on talking. He did not care to listen to her. He assumed that she was totally ignorant, which annoyed her. She said “My knowledge about finance is limited, that’s the reason why I was looking at hiring an advisor. Assuming that I am ignorant is one thing that puts me off”

Advisor 2 - A Senior advisor ( in his early 60's) from a leading Broking firm

According to Sheela, he was more concerned as to why she was single. She quotes,” He just could not get it when I shared with him that it was my personal choice to lead my life alone. He kept advising me that I should not remain single and I would realize the value of a life-partner in my old age….I felt he just did not want to listen to me or did not understand me …Well, he was just out to Father me…For God’s sake…..I need a Financial Advisor and not someone telling me how I should lead my life …”

She said that the least I wanted in an advisor was someone whom I could connect to, who could give me a patient hearing, who would treat me with respect and who would appreciate my views. Not someone who was trying to patronize me or trying to brag about his achievements.

Advisor 3 - A knowledgeable Advisor who gave a patient hearing

Fortunately for Sheela, advisor number three not only made eye-contact but focused his entire presentation on her needs and goals and never mentioned about his hi-tech software nor tried to force his views or annoyed her with his unwarranted free advice.

Sheela says,” When I walked into his office, I realized he was a real professional. He made me comfortable and then went on to ask pertinent and critical questions. He enquired into my financial and life needs. He was very attentive and listened to all my concerns and replies and treated all my questions as very intelligent ones. He really impressed me by making me dwell on questions like what made me happy and what was my purpose in life.”

The fact is that Personal Financial Planning has traditionally been viewed as a male-dominated area. Women are considered to be taking care of the kids and the household task while men are responsible for fending for the family. And if it is a single woman who may be a young woman of 25 to 40 years, a divorcee or a woman who is single with kids, it is perceived as though she has no idea about finances and has no one to guide her. Advisors treat single women as clueless and that’s the sad part.

Have you faced this as a Woman? Do share your experiences.....

Today, women are asserting themselves economically and maybe the most untapped opportunity for the financial advisor. Also, a lot of women who have gone through a separation or divorce have received money that needs to be managed efficiently and they are looking out for a good financial advisor.

It is a fact though, that Men are from Mars and Women are from Venus. Our bodies and minds are literally wired and designed to operate on different frequencies. Definitely, there is a difference in the way women look at investing as compared to men.

Ensuring you have the right advisor, and the right written financial strategy for your needs and goals is the key to a successful relationship.

The best financial wealth plans are flexible, living documents, which are reviewed often, so life can happen along the way.

These are few of the imp. things to keep in mind as a single woman-

1. Track your Expenses & Cash flows -You need to track your expenses and jot down your Cash flows both mandatory and voluntary. Once you decide on the expenses that are important, you need to check and curtail those that do not add value to your final goal.
2. Prepare a Savings Budget - Take the help of an advisor who can assist you to build a prudent savings budget and explain the magic of the Law of Compounding.
3. Contingency Planning/Emergency Funding –It is important for every individual (whether a man, woman, single, divorced, etc.…) to save at least 4-6 times of their income as a thumb rule. But it has been observed, the time taken to look out for a new job in case of layoffs is around 6-9 months or so due to the higher degrees in case of women, hence we recommend that a single woman is better off if she can keep aside at least 6-9 months of her expenses that can be split into a liquid fund or an arbitrage fund which can take care of her needs in case of an emergency.
4. Health Insurance -As a single and independent woman, you need to ensure that you have adequate health and critical insurance cover in place. Your advisor can help analyze all the insurance policies you currently have and advise you to take adequate health and disability cover as being single, you would need this to bounce back or take care of sudden eventualities.
5. Buying a house/Staying on Rent – There are a couple of challenges faced by a single woman in our country when it comes to either buying a house or investing in Real Estate or staying on rent. Necessary provisions for the same need to be made in your plan.
6. Provide for your Adventurous Streak if any - If you are fond of adventurous sports and would love to travel a lot, it is important to see that you save enough money which ensures regular health check-ups, fitness-related needs and sufficient amounts as the place and the gear for adventurous sports amounts to a considerable sum.
7. Retirement Planning - Saving for retirement is more important than you think and it needs to be on your priority list. Moreover, since statistics prove that women have longer life spans as compared to men, and single women are the only ones to fend themselves, you need to plan your retirement kitty well in advance to benefit from the law of compounding.
8. Estate Planning – You need to take the help of an advisor or a lawyer, who can guide you to prepare a Will clearly stating whom you want your estate to be handed over to, in case of your death. In this, you can plan in advance for the efficient disposition of your assets upon your death. Additionally, good plans also provide for the administration &a protection of your assets should you become disabled or incapacitated during your lifetime.
9. Digital Will -Not just physical but also Digital Assets can be protected today. Google has a tool called the “Inactive Account Manager” that lets you tell Google what you want to be done with your data hosted on its network after you die or stop using your account for a long period of time. This can be an Automated Will for your digital assets and you can decide whom you would like to give access to your photos, emails, documents, youtube videos, etc. . . .Facebook provides the choice if you want your account memorialized. Twitter, however, deletes the account if informed that the user is dead, but does not provide anyone else access to the account.

Financial Planning is important but it is more important to have the right advisor and Coach who understands YOU,

whom you can connect to and share your challenges, who can give you a patient listening, understand your requirements and is knowledgeable and qualified to prepare a customized and flexible strategy based on your goals and your risk appetite.

Its time, Women take charge of their financial lives and we at www.financiallysmart.com are here to #demystify financial planning and make the Complex...Simple...

We understand you and your needs and are here to help. Feel free to connect to me on Linkedin or drop me a line on [email protected]

#Financial Planning #Single Employed Women #Practice Management #Smartlife

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