SPLITTING UP THE BUDGET: MONEY TIPS FOR THE SINGLE SOUL

Half the songs out there are about love. But listen carefully. The other half are about money: how Cash Rules Everything, paying Bills Bills Bills, how B*tch Better Have it, earning it, deserving it, making it, spending it. We need both, certainly. But as Indian women marry later and later, they’re starting to realise that while finding love is risky, making money doesn’t have to be.

Instead of waiting endlessly to start splitting bills with potential future partners, single women are picking up essential lessons in being prudent with the money they’re making. Gurleen Kaur Tikku, founder of financial advisory firm Hareepatti; and Ankita Goyal, an independent financial consultant, offer financial planning tips for the single soul.

Get cold and calculating. Don’t wait for a joint account or a husband to keep track of expenses. “Instead of the usual Income - Expenses = savings, use this formula: Income - Savings = Expenses,” says Tikku. It gets young people into the habit of living within their means, avoiding debt and saving for the future. Draw up an expenditure budget and track it closely to avoid unnecessary expenses, she adds. Goyal advocates the 50-30-20 rule. Earmark half the monthly income towards essential expenses; keep 30% of the rest for non-essentials (travel, dining out and hobbies); and save the remaining 20%. Both recommend investing one’s own money early, bit by bit, to beat inflation and compound the amount as years go by.

Say yes to yourself. Women are less likely to be hired than men, and labour force data from the National Sample Survey Office says they made 28% less than their male counterparts in 2018-19. “Those dependent on a single income should have an emergency fund equivalent to six months’ salary,” Goyal says. “Also, buy health insurance so you don’t end up using your savings in case of a medical emergency,” Goyal adds.

Swipe left on debt. “Avoid taking on too many loans on a single, fixed income such as a salary,” Tikku says. “Remember that you’ll have to pay them off on your own.”

Count your tomorrows. Young people tend not to realise how expensive living will get in the future, more so if one does not have expenses to share with a partner. Money stashed as savings is safe, but stagnant. “It’s only sleeping if it’s in our cupboards or bank accounts. A basic fixed deposit, government bond or other market-related source is crucial for savings to actually grow alongside inflation,” Goyal says.

Hatch the plan. Indian women tend to live longer, sticking on for 70.7 years on average to men’s 68.2. This means they must plan better. Goyal lists five elements that help build a solid long-term financial base. Focus on having a steady income, curbing expenditure, putting away savings every month, investing, and protecting those investments. And factor in retirement too – even if you end up having children. “A proper retirement plan should have enough corpus to sustain a woman in what is essentially going to be a zero-salary period,” Tikku says. She recommends investing across debt, equity, gold, and real-estate, to build a reliable passive income.

Account for heartbreak. Breakups are hard on a person. Let them not drain finances too. When it seems like a relationship is about to end, have an open conversation about finances with your partner. “Understand the source of your current income and take stock of how much you need to earn to manage your existing lifestyle,” advises Goyal. Saving plans created with a partner are hard, but not impossible to disentangle. “Once single, the woman should re-start her own financial savings plan, keeping her current income and future goals in mind,” Goyal adds.

Hold on tight. Term plans, rather than life-insurance policies, make more sense for anyone looking to shore up money for their own lifetime. Pay premiums for 5 or 10 years, and after a lock-in period of another 10-15 years, receive a lump sum that is often double the initial investment. Forget credit cards that are targeted at women and shopping instead, sign up for ones that meet your spending and saving requirements.

From HT Brunch, November 4, 2023

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2023-11-03T00:12:27Z dg43tfdfdgfd