Smart Money Tips Every Woman MUST READ

'Money is not just about greed or accumulation. It gives you freedom, dignity and choice. And you have every right to all three.'

Even with that first pay cheque, you can begin making choices that will give you real financial independence down the line

This International Women's Day, Sneha Jain -- Smallcase Manager, founder-CEO, WealthTrust Capital Services -- has one number she wants every woman in India to know: Rs 30,000 a month, invested with discipline over 30 years, can quietly become Rs 10 crore retirement corpus.

Sneha does not lead with that figure to impress -- she leads with it to show you what is already within reach.

In this interview given to Prasanna D Zore/Rediff, she lays out a roadmap for women who want to stop leaving their financial future to chance, to others or to later. Start wherever you are, own every decision and remember that money, at its core, is just freedom with a number attached.

She discusses why financial independence is non-negotiable for women -- at every age, every stage.

 

'Both investment and spending have their place but the order matters'

What should a woman do with her very first salary to build a strong financial foundation?

The first salary is a bit of a milestone and the temptation is to either spend it all or just let it sit in a savings account. I would say, break it up.

Roughly 50 per cent can go towards household expenses and basic needs -- though that number will vary from person to person; for some it might be 60 per cent. Whatever is left, split it into two buckets.

One is an emergency fund. I meet so many people who have nothing to fall back on when something unexpected comes up. So put 20-30 per cent aside for that.

The remaining amount, however small -- even if it's just Rs 500 or Rs 1,000 -- should be invested in some form.

Now, that investment need not be an SIP or a recurring deposit straight away. It could start with something as basic as a health insurance policy for yourself.

Sort your foundation first -- emergencies, insurance -- and then build from there.

Even with that first pay cheque, you can begin making choices that will give you real financial independence down the line.

Women -- even men -- in their 20s tend to prioritise lifestyle spending. How can they balance enjoying life today with starting to invest early?

We are very much in a consumer economy now and lifestyle and peer-led spending has gone up phenomenally.

Every app, every new advertisement nudges you to spend more.

I don't think this has to be a choice between buying something that makes you happy in the moment and investing for the future. The trick is sequencing.

If you have Rs 100 coming in and your needs take up about Rs 50 or Rs 60, take out 20-30 per cent first and invest it. Then see what you're left with; that's what you spend.

If you do it the other way around -- spend first, invest whatever remains -- there is rarely anything remaining.

Investment gives you independence in the future. The new outfit gives you happiness for a day. Both have their place, but the order matters.

Your financial plan priorities should be...

Many women take career breaks for motherhood or caregiving. How can they stay financially independent during those periods?

This is exactly why the groundwork you lay in your earning years matters so much.

If you have spent everything, a career break will force you to depend on others for the most basic things -- and that dependency can feel very uncomfortable even if the people around you are supportive.

If you have built an emergency fund covering 12 months of expenses, a sabbatical stops being a crisis and becomes a choice.

The other thing I'd say strongly is keep investments in your own name.

I have seen many women hand over their savings to a spouse or a parent to manage. But if those investments are in your name, you have full access, full visibility, full control.

Keep those small investments going even through a break -- over time, they add up to something meaningful.

For working mothers juggling home loans, family expenses and children's education, how should financial planning be prioritised?

There is a clear order to it.

First, your emergency fund -- six months of expenses if you have a supporting partner, closer to a year if you are a single earner.

Second, make sure your insurance is sorted -- a basic health insurance and, if others depend on you financially, a term insurance policy. If there is a history of illness in the family, look at a critical illness cover as well.

Third -- and this is where I see a lot of people get it wrong -- plan for your own retirement before you plan for your children's education. Think of it like the oxygen mask on a flight -- you put yours on first.

Your children can take a loan for their education if they need to. Nobody is going to give you a loan for retirement. So pay yourself first, invest for yourself first and then look at education planning.

The two are not in conflict but the priority must be clear.

Common financial mistakes you should not make

Should women manage their own investments even if their family already handles the household finances?

Absolutely, and marriage or family arrangements have nothing to do with this.

You are working, you have your own goals and financial literacy is non-negotiable for you regardless of who else is involved.

Life changes -- people are not around forever. If you have left everything to someone else to manage and then have to take over at the age of 60 or 70, it is enormously difficult.

Even if your family does manage the finances day to day, you should know exactly where every document is, where the insurance papers are, which accounts exist, what loans are outstanding.

Ask those questions. You have every right to.

What are the most common financial mistakes women make in their 30s?

A few come up again and again.

Over-prioritising children -- planning for their education long before thinking about retirement.

Not buying adequate insurance, which is a wider problem in India but women are particularly guilty of putting this off.

Leaving all investment decisions to a spouse or father.

And being too conservative with investment choices.

We have grown up being told that gold and fixed deposits are safe and while they have their place, asset allocation has changed.

What made sense 30 years ago may not serve you well today.

Markets feel volatile but sitting out entirely means you are losing to inflation.

You do not have to invest in things you do not understand but you do need to make the effort to understand, and to include equities as part of your portfolio.

How important are emergency funds and insurance -- particularly for single mothers and single earners?

They are the foundation and no investment works properly if the foundation is shaky. If you do not have a health insurance and you are hospitalised for a week, it eats into whatever corpus you have built.

That is why, when I talk about how to split your income, insurance and emergencies come before investments -- not after. One without the other leaves you exposed. Sort the base first. Then grow.

'That Rs 5 crore figure can grow to Rs 18 crore or more if...'

Women typically live longer than men. How should that reality shape their retirement planning?

It means you need a bigger corpus and it needs to last longer. That corpus must be inflation-adjusted, which is why you cannot rely only on conservative instruments.

Fixed deposits and savings accounts do not beat inflation over time.

You need exposure to equities or other asset classes that deliver real returns. The fear of market volatility is understandable but the more you read and understand, the less scary it becomes.

The key principle is: Invest in what you understand, do not simply follow what others around you are doing but do not opt out of equities entirely either.

For women in their 40s who are starting to invest late -- what strategies can help them catch up?

The first thing I want to say is: Do not feel guilty about starting late. Whenever you start is a good start. That said, you now have fewer years, so the approach needs to change.

By your 40s, your salary is likely at a better level. Use that. Be more aggressive in your investments than you might have been in your 20s. Increase your allocation to equities and consider international equities as well.

Avoid parking large sums in low-return options like fixed deposits. And if your retirement number genuinely requires it, be open to working slightly longer.

If you had planned to retire at 50 but that target looks more achievable at 55 -- that is a pragmatic and reasonable adjustment to make.

Can you give us some actual figures? What kind of retirement corpus should women at different life stages be targeting?

The number depends on your lifestyle and monthly expenses so there is no one figure for everyone. But let me give you a simple illustration.

If you are in your 20s and start investing Rs 30,000 a month, assuming a 12 per cent annual return, after 30 years you would have roughly Rs 10 crore. That is a very respectable retirement corpus.

The challenge is not getting to that number -- the math is straightforward. The challenge is staying invested for 30 years without stopping midway.

If you are starting at 40, with about 15 years to retirement, you would need to invest roughly Rs 1 lakh a month at the same return to build a corpus of about Rs 5 crore. That sounds less exciting but it is not a bad number.

And remember, most people see salary increments every year. If you step up your investment along with your salary, that Rs 5 crore figure can grow to Rs 18 crore or more.

The starting point matters less than the consistency.

Finally, what are the three financial habits every woman should build, regardless of age?

One: Invest before you spend. Anything purely momentary -- that top, that gadget -- can wait. Set aside your investment first and spend what remains, not the other way around.

Two: Know your numbers. I think people avoid this because it feels intimidating but it really is not. If you write it down and look at it honestly -- your income, your expenses, your existing savings -- it is not rocket science. The intimidation goes away very quickly.

Three: Own your financial decisions. Never hand over that authority to someone else completely -- not a spouse, not a parent, not a sibling. Even if the decision is small, own it. Good or bad, right or wrong.

Money is not just about greed or accumulation.

It gives you freedom, dignity and choice. And you have every right to all three.