Here's some expert advice to help you take charge of your money life

While women have won parity at the work place, they tend to delegate money-related matters to the men in their lives. This International Women’s Day (March 8), resolve to take responsibility for managing your finances. Here’s advice from our experts

Asset allocation and SIP are key to investment success

S Naren, ED & CIO, ICICI Prudential AMC
In my experience, women tend to be better savers and more thoughtful investors. However, they need to be careful about a few aspects, such as asset allocation. Allocate your investments across varied asset classes so that the portfolio is not affected by volatility in any one asset class.

Every asset class has a role to play in one’s portfolio. Equities provide growth while debt lends stability. Gold can provide a hedge against inflation. To get this aspect right, consider investing in a dynamic asset allocation or a multi-asset fund. Such funds invest across asset classes such as equity, debt and/or gold, based on the attractiveness of a particular asset class, and are dynamically managed. They ensure your investments make the most of market opportunities across a market cycle.

Stick to systematic investment plans (SIP) to meet your long-term financial goals. The benefit from this seemingly small step can be very big in the long term. Top-up your monthly investment amount over time through features such as SIP Top-Up, so that your incremental earning is matched with incremental investments.

There will be times when the markets may be volatile. On such occasions, refrain from investment decisions made in panic. Such buying or selling generally turns out to be detrimental. Do not let short-term market volatility impact your long-term investment.

Secure key life goals 

RM Vishakha, MD & CEO, IndiaFirst Life Insurance
Women have typically been budget planners focussed on deriving maximised value to meet expenses. This acumen should now be utilised to take controlled insurance decisions. 

Life policies are purchased to safeguard present and future earning capability. With women, a key challenge has been their tendency to pitch lower than their actual financial worth, impacting their future income-generating capacity. Among the life plans available, today you have pure term insurance, offering pay-outs to dependants on the insured’s passing, or plans clubbed with investment benefits. Choose the right product, based on your ability to manage money, and use it for earmarked purposes. If prioritising finances is a challenge, the money should stay locked in, especially to fulfil non-negotiable goals like your child’s higher education. Buy a life policy so that if unfortunately you are not around, its pay-out doubles up as the corpus. Benefit from the flexibility life insurance now offers in terms of premium payment term and policy duration. 

Buy health insurance early

Ashish Mehrotra, MD & CEO, Max Bupa Health Insurance
In these times, women should not only make the right investment decisions but also invest in a comprehensive health insurance plan to protect themselves and their loved ones from the financial impact of medical emergencies. Breast, ovarian and cervical cancer are among the most common forms of cancer in India. About 17 per cent of urban middle-class women are diabetic. Hence, women need to buy a policy that covers critical illnesses too.  

Adopt preventive healthcare measures in your day-to-day lives. Undergo regular medical health tests and adopt wellness programmes. Do not neglect your own health while fulfilling your family duties. With today’s health insurers incentivising early adoption of health insurance, millennial women should buy a cover as early as possible to fulfil the waiting period requirement. Compare product benefits and buy one that suits your requirements.

Women planning to get married or to start a family soon should consider purchasing a health insurance plan that includes maternity benefits. Buy in advance as these policies come with a waiting period of two-four years. Buy a plan that has the lowest waiting period (two years) and offers vaccination for the newborn.

Manage money prudently

Renu Maheshwari, Sebi RIA, Co-founder and principal advisor, Finscholarz Wealth Managers
Lack of equality in inheritance laws, disruptions in career due to biological and social responsibilities, dual responsibilities of family and career, and the cost of living longer — the combination of these factors makes financial planning for women both an imperative and a challenge.

Create an emergency fund to tide over sudden expenses. Buy adequate term insurance if you have financial dependants. Work towards investing for retirement and medical contingencies right from the beginning. Secure a home for yourself or enough corpus to be able to pay rent for life, while you are earning. Avoid high-cost loans, such as personal and credit card loans. Do not buy gold as an investment as it does not create wealth in the long term. Buy only for usage and stay within budget. Don’t buy real estate if you desire the freedom to move. 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel