How single women can become financially independent (2024)

As a woman, you’ve likely encountered societal norms and expectations that challenge your autonomy and worth. Whether married, single, or divorced, navigating these pressures can be daunting. This International Women’s Day, let us celebrate your strength and resilience in defying conventional roles and embracing your independence. For single women especially, this day marks an opportunity to seize control of your financial destiny and pave the way towards economic empowerment. Here are a few financial tips to empower single women in building a prosperous future for themselves and their loved ones.

Strive towards equality

Single women in India face a myriad of challenges on their path to financial equality. Income disparities persist, with women earning less on average than men due to gender-based pay gaps, necessitating strategic financial planning to maximise income potential. A lack of financial knowledge exacerbates these challenges, as many women lack access to resources and education. Additionally, societal norms and stigmas often deter single women from taking control of their finances, perpetuating dependence and hindering long-term security. To overcome these age-old barriers, you must put in a concerted effort to break free from stereotypes and embrace financial independence, thereby paving the way to achieve equality and autonomy in your financial lives. Remember, financial empowerment is not just for some women; it’s for all women.

Build an emergency fund and take enough insurance
As a single woman, your financial planning should focus on both your present and your future, and the journey starts today. Women must prioritise key financial decisions in the present to secure their financial future. Firstly, creating a budget is essential as tracking expenses and establishing a monthly budget based on your income, fixed expenses, and discretionary spending helps identify areas for saving and investment. Additionally, building an emergency fund is crucial as a single woman because you may not have the security of a family to fall back on when met with exigencies. To create a robust emergency fund, you should set aside at least six months’ worth of living expenses in a separate savings account and ensure preparedness for unexpected expenses or unforeseen circ*mstances. Finally, make sure you have an optimal insurance policy covering varied aspects such as your family members, house, health, and vehicles, to prevent unnecessary loss of money in emergencies. By taking these proactive steps, single women can lay a solid foundation for financial stability in the present and enable resilience in the face of future challenges. Remember, these steps are crucial for all women, regardless of their marital status.

Create multiple income sources, diversify portfolio
To build long-term wealth, it is crucial to explore investment options aligned with your risk tolerance and financial goals. Diversify your portfolio by investing in a range of assets like mutual funds, fixed deposits, and government schemes such as the Public Provident Fund (PPF) and National Pension Scheme (NPS). Initiating a monthly SIP with as little as `500 can kick-start your investment journey and take you that much closer to financial freedom while also acting as a passive source of income for your future. Additionally, creating multiple sources of income is key to financial resilience and growth so consider avenues like rental properties or part-time employment. This Women’s Day, invest in yourself through vocational courses or skill development to enhance job prospects and earning potential. Remember that, by diversifying your income streams and making strategic investments, you can pave the way for long-term financial security and prosperity.

Plan for your retirement

Planning for your retirement is even more important as you may not have the safety net of a family to depend on in your golden phase. As retirement becomes an eventual reality, it is essential to prepare financially to sustain your lifestyle and fulfill your ambitions once you hang up your work boots. Surprisingly, a news report states that only a small fraction of women, just 2%, are actively investing for retirement. Starting early and investing in diverse assets, with robust returns, such as equity mutual funds, is crucial. By beginning with small investments and leveraging the power of compounding, you can build a solid financial cushion for retirement. Remember to diversify your investments to mitigate risks—avoid putting all your eggs in one basket. Taking proactive steps towards retirement planning ensures financial security and peace of mind for the future. All women should prioritise retirement planning, regardless of their relationship status.

In addition to these financial imperatives, it is also practical to draft your will and nominate the individual or organisation you wish to leave your wealth and belongings to, thereby avoiding potential strife and conflict in the case of an untimely occurrence. Once you complete these steps, you can rest assured knowing your future is well cared for. Remember, it’s not just single women, but all women who need to understand finance-related stuff, plan accordingly, and invest for a secure future.

May this International Women’s Day serve as a reminder of your strength, resilience, and inherent worth as a woman traversing the complexities of life, love, and finance. As you get on this journey towards financial empowerment, take the time to draft your will, not just as a legal formality, but as a heartfelt expression of your love and legacy, ensuring that your wishes are honoured and your loved ones are provided for, long after you’re gone. With each financial decision you make, with every investment you pursue, know that you’re not alone in this endeavour. It’s not just single women, but all women who deserve to thrive, to prosper, and to secure a future filled with hope, possibility, and abundance.

Happy International Women’s Day!

The author is EXECUTIVE DIRECTOR, 360 ONE WEALTH