Financial assets play a crucial role in providing a safety net during unforeseen emergencies or career breaks. Therefore, it's essential for women to create financial reserves throughout their careers. Sapna Narang, Managing Partner, Capital League, an all-women led boutique wealth management firm, emphasises the importance of women investing in skill development, prioritising debt repayments, and obtaining health insurance for themselves and their dependents to safeguard against financial disruptions. Edited excerpts:
BT: What specific financial goals do you recommend for women to achieve financial freedom in today's world?
Sapna Narang: Financial Freedom means you have sufficient financial means to cover your necessities. Over some time, as one’s needs evolve, the reserves needed to address them must also expand. Financial goals vary from individual to individual.
To begin with, one should build up an emergency fund to cover 4 to 6 months of expenses. One can then articulate both short-term such as saving for a specific purchase, vacation, or education, and long-term goals such as retirement planning, homeownership, or investment milestones.
BT: What are some essential steps women should take to secure their financial future, especially considering factors like life expectancy and caregiving responsibilities?
Sapna Narang: Women must build up financial reserves in the form of assets and investments through the course of their careers. These financial assets will provide support for unforeseen emergencies or career breaks. Women tend to live longer than men. Women should be cognisant of this and plan for retirement and later years accordingly. They should also invest in education and skill development, prioritize debt repayments, take health insurance for themselves and dependents to prevent shocks to financial plans, plan for career breaks, leverage perks and benefits where available, create a support network for advice, and above all learn to manage one’s investments rather than depending on male members of the family.
BT: Can you provide advice on how women can effectively balance saving for retirement with other financial priorities such as paying off debt or investing in education or business ventures?
Sapna Narang: Women should allocate resources based on their financial priorities and goals. One should determine the percentage of income to be allocated towards retirement savings, debt repayment, education, and business ventures, adjusting as necessary to accommodate changes in circumstances. Financial goals should be broken into short-term and long-term tenures.
At the beginning of one’s career priority should be given to building an emergency reserve and saving and investing in low risk less volatile options for short-term goals like education. As one’s salary grows, regular allocation toward investments bucket for retirement should be increased. If starting a business is a priority, one should consider starting small and gradually scaling one’s venture with experience and resources. One should bootstrap the business using personal savings and explore funding options like small low-cost business loans and benefits. Women should not hesitate to invest in equity as an asset class where the goal is of a long-term nature to benefit from the power of compounding.
BT: In your experience, what are some common misconceptions or myths about personal finance for women, and how can they be addressed to empower women to take control of their financial lives?
Sapna Narang: It’s a common misconception that women do not understand or cannot manage investments. This is due to decades of social conditioning that ‘men take care of money and women take care of the hearth.’ Hence, it's a common practice where women leave financial decisions to their fathers/spouses/children. Financial decisions should be collaborative, and both partners should be actively involved.
Also, it’s a myth that men are ‘aggressive’ investors and women are ‘conservative.’ The risk profile of a person is gender agnostic. Similarly, financial literacy and capability are not gender-specific.
Women need to be aware of these misconceptions and take the initiative to learn and equip themselves to handle their investments and be a part of the family’s financial decisions. Today, women can get access to information, tutorials, financial planners, etc., and skill themselves gradually and the best way to learn is to do it. Starting small may help in building confidence.
BT: How did your personal experiences as a mother influence your leadership style and approach within the organization?
Sapna Narang: Balancing the commitments at home while taking care of young children along with one’s professional aspirations is a very challenging phase for women. It requires the mental strength to be ‘adaptable ‘to unforeseen circumstances, ‘agility’ to come up with solutions on the go, and work long hours at unpredictable hours.
The personal experience of juggling multiple issues as a mother has made me sensitive to the challenges faced by women in balancing professional and personal lives. Thus within the organisation, we have created support systems and built-in flexibility for giving time off to women colleagues when needed. At the same time through team bonding, sharing of personal stories, and outlining aspirational targets we have created an environment to promote meritocracy
Also read: 62% of women want to live a peaceful life, and over 42% want to have good work-life balance
BT: In what ways do you believe your organization empowers women differently compared to other organizations?
We have an all-women team—nurturing, caring, and empathy that naturally translates into a healthy work environment.
As women leaders, we resonate with the challenges faced by our female team members in their day-to-day lives. Many are primary caregivers, navigating personal challenges. We have implemented flexible work arrangements and policies and more openly accommodated the diverse needs of women, including those with caregiving responsibilities. We also organize skilling and career development programs for them within working hours. Additionally, we occasionally hold hobby or leisure activities, picnics, and off-sites for improved team bonding and understanding.