International Women’s Day: Why a Customised Financial Plan, Not a Cookie-Cutter Approach, Is Key to Financial Freedom

Introduction

On International Women’s Day, it’s time to celebrate not just the achievements of women but also the journey towards financial independence. While financial planning is essential for everyone, women face unique financial challenges—career breaks, longer life expectancy, and the gender pay gap.

A customised financial plan tailored to individual goals and circumstances is the key to long-term financial security, rather than a one-size-fits-all approach.

Why Women Need a Tailored Financial Plan

Women Have Longer Life Expectancy

Women generally live 5-7 years longer than men, meaning they need more retirement savings to sustain a comfortable lifestyle.
A personalised plan ensures adequate retirement funds, covering medical costs and living expenses for an extended period.

Career Breaks and Income Gaps

Many women take career breaks for childcare, elder care, or personal reasons, leading to gaps in earnings and savings.
A financial plan that factors in career pauses and reskilling investments ensures continued financial growth.

Gender Pay Gap and Wealth Disparity

Women often earn less than men for the same work, affecting savings, investments, and pension contributions.
A customised plan focuses on building multiple income sources and leveraging high-return investment options.

Different Risk Appetite and Investment Preferences

Women tend to be risk-averse investors, often favoring traditional savings methods over equity markets.
A well-structured plan balances security with growth, including diversified investments in mutual funds, stocks, real estate, and bonds.

Steps to Building a Customised Financial Plan for Women

Define Your Financial Goals

Short-Term: Emergency fund, travel, skill development.
Mid-Term: Buying a house, children’s education.
Long-Term: Retirement planning, wealth creation.

Build an Emergency Fund

Set aside 3-6 months of living expenses in an easy-to-access account.
Women with dependents should prioritise a larger emergency corpus.

Invest in the Right Tax-Saving Instruments

Public Provident Fund (PPF) – A safe long-term investment.
Equity-Linked Savings Schemes (ELSS) – High returns with tax benefits.
National Pension System (NPS) – Helps build a retirement corpus.

Get Adequate Insurance Coverage

Health Insurance: Ensure coverage for maternity, critical illness, and lifestyle diseases.
Life Insurance: Essential for women with dependents or financial responsibilities.