A look at financial mistakes a single woman should be aware of

How do you plan for your financial well-being?

Over the years, we have noticed that one-size-fits-all approach does not work when it comes to your finances.

As far as single women are concerned, they need to pay attention to the following points:

Your risks are slightly different from most others

Normally when we are planning the finances, one of the first things we do is ensure that all possible risks are taken care of by means of insurance. Paramount among them is support for family in case of loss of life vide term insurance. In case of single women this may have less significance than say ensuring that you are taken care of in case of a situation where you lose your ability to generate an income. This can happen due to accident or critical illness.

It is therefore important that you look at critical illness insurance, which will pay you the lumpsum insured amount in case you are diagnosed with one, This is hugely helpful since your ability to work and therefore generate income is compromised temporarily due to the illness. There are likely to be lifestyle-related changes which also come at a considerable financial cost.

The other thing you should look at seriously is accident insurance, I am referring to the one which pays you a percentage of your current income in case you are unable to work due to an accident either temporarily or permanently. This is not to be confused with insurance which pays more when the death occurs due to accident. The whole point is to prioritise your needs in your life time.

Ensuring you have earmarked somebody who can access your finances in case of medical emergency

Even when you have substantial financial resources it is important that they are available for you when you need it. In case of single woman, you will need to give thought to who will be your fall-back option who will have access to your funds and insurances if you are unable to access them due to medical reasons. In one of our recent interactions, we came across a lady who had gone through a similar situation. She was suddenly extremely ill and had to be hospitalised, even though she had enough financial assets to take care of her, no one in her immediate circle had access to any of her assets. Luckily, her friends were around to take care of her hospital needs and she recovered quickly enough to be able to take care of things.

It is important that you have a conditional power of attorney so that your funds can be used for your care in an medical emergency.

Estate planning is an integral part which ensures your inheritance goes towards your intended beneficiaries

When I refer to single women, I mean women who are single, divorced, separated, or widowed. When you are in the process of separation you need to remember that legally you are either married or divorced, there is nothing in between. Hence in case of succession without Will for a Hindu women, her successors will still be her husband and children. If you want different beneficiaries, you need to make a will. The same is the case with widowed women. If they do not have children first claim to their property will be with their in-laws. If you intend that your estate to be inherited by someone else. You need to make a will.

These are non-financial action but relevant to single woman and can considerably reduce stress in difficult situation. Building wealth is exciting and you should immediately embark upon the journey of building wealth and thereby giving your self the freedom to live your life on your terms. Do ensure you act upon the above points to make your journey smoother.

(The writer is founder – Finwise Personal Finance Solutions, Views expressed are personal)