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7 things women should know about their family's finances

7 things women should know about their family's finances

7 things women should know about their family's finances
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By CNBC-TV18 Oct 27, 2021 12:48:32 PM IST (Updated)

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Many women believe that they are unfit to take part in their family’s finances, but that is absolutely untrue. In fact, women have a natural knack for saving and they tend to be more level-headed about investments too. It is a mere lack of confidence and financial knowledge that keeps them reliant on men for money. Instead, women should play an active role in their family’s financial planning and become more financially literate.

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So if you want to understand your family’s finances but aren’t sure where to begin, here are 7 things you should know:
  1. Income and expenditures:
  2. The most basic thing that every woman needs to know about her family’s finances is how much money is coming in and how much money is going out every month. Income and expenses are a great entry into family finances and they are both extremely easy to keep track of as well. Knowing your family’s joint income and expenditures will help you set a realistic budget that suits the needs of everyone in the family.
  3. Savings: It is absolutely essential that every woman knows how much money her family is saving every month. This includes individual monthly savings as well as details of any joint emergency funds and long term savings accounts. Keeping track of your family’s savings can help you gain a better understanding of your family’s financial personality, which means that you get a clearer picture of your family’s lifestyle and spending habits. In turn, this can help you create a savings plan for financial milestones in the future.
  4. Insurance policies: Did you know that in spite of earning less than men, women usually have to pay more for healthcare? This is why it is essential for all women to get health insurance and also get the rest of their family insured. Furthermore, women should also find out which of their family assets are insured and which aren’t. Having your family’s insurance information can save you all a ton of financial trouble in a moment of crisis.
  5. Investment avenues: It is common for men to singlehandedly control their family’s investments, even in cases where both they and their female partners are earning well. However, this is not a good practice for a myriad of reasons. Consider this example: The family patriarch, who solely managed his entire family’s investments, suffers a fatal accident. His wife is now left in the lurch because she is unaware of his investments and will therefore not be able to claim the returns. This example demonstrates why women should make it a point to keep track of the family’s investment portfolio.
  6. Taxes: While tax planning is important for every individual, women should make an active effort to keep track of their family’s taxation as well. This is because the government already offers incredible tax reductions for women, and your family members can help you redeem a lot of tax benefits as well. For example, you can buy health insurance for your family members and avail a tax exemption for it. Education loans for children and owning joint properties also qualify for tax deductions.
  7. Assets and liabilities: Family assets refer to the financial properties owned by your family as a whole, which includes businesses, properties, cars, pensions, savings, stocks, etc. You might inherit some of these assets someday, which is why it is beneficial to know what assets your family has. It also helps to know your family’s financial liabilities such as pending loans or mortgages, in case you inherit them and have to pay off those debts. Having a list of family assets and liabilities can also help you plan your own financial future, including savings, estate planning and tax deductions.
  8. Wills and estate plans: One of the most important pieces of financial information that women should have is a list of all active wills and estate plans in the family. Women should also make sure that these wills and estate plans are fully updated and relevant. This is because women are usually kept away from finances, but they are also more likely to have to clean up any financial messes that their male family members made. So to save yourself a lot of financial grief later in life and make a list of all the active wills in the family.
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