5 ways housewives can secure their financial future

In India, it's mostly been men who have traditionally managed household finances. But with changing times and inflation pushing the household budgets to go haywire, women - both working and housewives- have started taking keen interest in managing the finances and have begun excelling in it. The economy is dogged by uncertainties every now and then, so it has become important for women to keep their families financially secure. The onus of this is the same on women who are homemakers. The traditional way of saving money in containers have now been taken over by bank accounts and investments where your money could multiply.

A housewife is technically not an earning member, but she has a major role to play in running the household finances. It was a traditional belief that housewives and finances cannot go together as they have very little knowledge about finances. There is a marked shift in this as homemakers today are well educated and well-versed with the changes in the world. They are more prepared to deal with the financial challenges.

Let us take a look at a few financial planning aspects that housewives need to know.

What If The Worst Was To Happen?

Let us look at an example where the husband and the sole breadwinner expires due to an unfortunate circumstance. So, when the husband passes away, the wife is sometimes left clueless about the financial whereabouts if she had not been a part of the decision making procedure.

In fact, there is quite a high chance of her not being able to figure out the financial savings and investments at all. Lack of understanding of the finances renders the housewife hopeless in salvaging her husband’s financial decisions.

If the husband had spent some time educating his wife about his investments, as he did in planning for the same, she would be in a better position to safeguard her and her children’s future.

Money Management

Traditionally, working husbands figure out the loans, house rent, bill for electricity and telephone etc. The woman are usually responsible for the groceries and other home requirements. More of the budgeting should be done by housewives as it is a good delegation of duties. Women have been very good in saving out of even a shoe string budget and saving up for the rainy days. So, they would surely do a better job than their husbands in terms of planning for their and their children’s financial future!

Women work endlessly to secure their family’s future by doing everything they can in the household. So, they can do even more by being included in the financial planning process. No one can prepare you for the worst, it is best to be financially educated to deal with it.

5 Financial Planning Tips for Housewives

1. Firstly, the wife should start taking keen interest in the financial planning and keep herself abreast about the Insurance and investments done for the family members.As a housewife you can also open a bank account in your own name, where savings you have made from the monthly budget can be deposited. You can also open a FixedDeposit, and multiply your money. For example, a FD of Rs. 10,000 can become Rs. 13,700 at a CAGR of 6.5 per cent after 5 years.

 

2.The housewife as a mandatory step could ask her husband to make her a joint holder in all the investments. If that is not possible, as in the case of pension plan, etc. then her name should be included at least as a nominee. This secures the wife and her children under unforeseen situations.

 

3.As a housewife, you should keep a proper record of all investments, login details, documents and other paperwork, etc to be in control of finances during any untoward incident. This should include documents pertaining to health insurance plans, PPF, life insurance, bank Fixed Deposit receipts, etc.

 

4. Saving, and using that surplus amount to invest could be the best financial step for a housewife to take. A saving of Rs 1,000 from the household budget can give a return of Rs 70 lakh in 30 years at a CAGR of 15% if invested in MF SIPs. Are there mutual funds that provide 15% CAGR? Yes, there are. Mid and small-cap mutual funds have provided a CAGR of 16.79 in the seven years ending June 2017, CRISIL - AMFI Small & Midcap Fund Performance Index. 

 

5.However, please evaluate market risks before investing in mutual funds.Another very important aspect is deciding husband’s final will and testament. The housewife needs to be present when it is drafted so she has a say in it and is completely aware of its contents.

With a little effort, research and interest, a housewife can be financially empowered to deal with unforeseen situation.

 

(The author is CEO of Bank Bazaar)