Five things a home maker must know about money matters

Lovaii NavlakhiInternational Money MattersWhile women are being consulted on most purchases for the family be it a fridge or a home. They are more often than not left out of decision making when it comes to investments. These are five things that women must know when it comes to money. Goals: What are your long and short term goals? Short term goals could be refurbishing your home to taking a vacation- anything that is due in the next 12-18 months. Long term goals could be child’s education, retirement and the like which may fall due post 5 years. Putting down these goals on paper will help you put a value to them and match these against your inflows/ savings and help you understand what is achievable and what is far-fetched. It will also help you prioritize your goals; which is very important- so that we don’t compromise a short term goal for a long term goal and vice versa. Insurance: Know how much life insurance the bread earner/s have and if it is adequate. Simply put if the earnings were to stop from tomorrow, will you still be able to maintain the same lifestyle and also be able to meet all your future goals. You should also take stock of health insurance that the family has- healthcare costs are only increasing and this is an expense that could easily wipe away a few years’ savings. Investments: When we speak about investments, we often talk about the best investments and what’s in trend- who’s made money in what stock where as what we should be talking about is what are we invested for- each and every investment that we have should be earmarked to a goal- be it short term or long term or emergency. How volatile are these investments and how liquid are they - are two other things that we should know. An asset allocation statement and net worth statement will help us understand where we stand as a family. Liabilities: Knowing the liabilities you have is very important, while you may know the income of the household and the expenses that are on a regular basis. Keeping a check on liabilities will give you a realistic idea of the networth and also know whether/ when you can splurge on those exotic holidays/ items. Don’t leave the unpleasant task of managing these to others. Nominations/ Wills: Ensure that the nominations for the investments are in place and are correctly updated. Having a will is a good idea irrespective of how young you are, you never know what’s in store tomorrow.While this may not be a “money” tip, but having a file with passwords of bank accounts, investments etc should also be on your list of things to do. Managing money may seem like a daunting task, but women are used to budgeting and even saving while on a shoestring budget. It is time they start participating in the overall decisions of the house when it comes to investments and goal planning too.