The relevance of financial independence for women gains immense prominence in present times, given the larger role that women have started playing in our society. Today's self-thinking women are powerful decision makers at home and work, and contribute to the well-being of the society as well.

However, a lack of confidence and knowledge about managing personal money, and pre-conceptions about her limited abilities in money matters, seem to be hindering the Indian woman from achieving full financial independence.

Women find themselves on the throes of a financial crisis when faced with personal calamities such as divorce, death of the spouse, or fatal medical conditions. Single women who depend on others for making their personal financial decisions become vulnerable to financial frauds; the lack of proper financial planning is more likely to leave them with a worrisome financial future after retirement.

Knowledge is powerful and it helps to be aware of some common irrational financial mistakes that women are prone to make in the process of becoming financially wiser:

The 'Finance is not My Cup of Tea' Mental Makeup

You could very well learn to make finance your own cup of brew. You may be happy having the cash in hand and not the numbers in your head, but this mindset can land you in trouble, especially when you are left alone to deal with your finances.

A shift of mindset is the first step towards becoming financially aware and wise. Develop a self-belief that you can handle your financial sphere as you have done with other areas of life.

Learn to read a bank statement; read personal financial columns in newspapers; or enrol in financial workshops and boot camps for women, to become more financially aware. Having the help of a financial planner is also a good idea to help you find your way through what might seem a challenging and even an insurmountable arena.

Postponing saving plans

When it comes to saving, it is always wiser to start early. Waiting for the future, or to the occurrence of an event such as promotion at work or child birth, to start saving may leave you financially lean in times of need.

The range of saving plan options available in the financial market can make you feel intimidated. To reduce risk, start with a saving plan that allows you to invest minimum amount. Research well about the plan and talk to relatives and friends, who have used the plan.

You could also consider hiring a financial consultant to understand the benefits and risks involved in subscribing to a plan, before making a decision.

Giving in to the temptation to remain ignorant about your finances

Being ignorant of your financial situation is certainly not bliss. Leaving others to take complete charge of your finances can be dangerous.

Know what's happening with your finances. Whether it's your husband, parent, sibling, or a trusted confidant, taking care of your finances, ensure that you know what's going on. Get involved in making financial decisions as well.

If you are a married woman, it helps to have an open talk with your partner about your finances. Discuss about your existing financial position and future plans. Make your decision about having a joint or separate bank account known to him. Get to know about assets that you own separately and along with your partner. Details of financial firms and the list of investments therein, in your or your partner's name are other crucial facts you need to be informed about.

If you have made a long-term investment with your partner, make it a point to keep yourself updated about the returns, risks or other details involved in the investment. Review the performance of the investment along with your partner on a regular basis. Participate actively with your partner in making decisions involving your investments.

Leaving yourself to the last

While it's important to take care of your loved ones, it's equally important you put yourself first. Make it a priority to save for your old age or post-retirement life. Be prompt and systematic in allocating funds towards these savings. Never use these savings for other areas of your life such as children's education and marriage. In addition, start making such savings early.

Spending without a reason

While spending to satisfy a sudden inner urge and not a real need is normal, making such spending regularly can be disastrous. Avoid spending:

> to de-stress yourself

> on the spur of the moment just because the purchase seems too good to let go and you are not even sure if you would be using the product

> to avoid peer pressure

> Without analysing your requirements. For example, you may buy a product with many features that you might not even need.

> Without researching all avenues of sales. For example, a book might cost you lesser online than in a shop.

Failing to set clear financial goals

Not knowing where to start and how to proceed leads you nowhere. A set plan about what you want to achieve financially, over a period of time, is key to success. With clarity, you can set definite financial goals and carve a plan to achieve them.

Being inflexible about your financial plans

The financial market is volatile to say the least. Your needs and conditions are bound to change over a period of time. Therefore, you need to be willing to re-assess and revise your financial plans to meet your changing needs and varying market conditions.

It isn't enough starting an investment and leaving it to take care of itself. Monitor your investments, personal needs and market conditions on a regular basis, and adjust your investment portfolio accordingly. You may have to seek new investments or redeem some to keep your finances steady and going. Consider seeking the help of a financial planner to be able to make the most of your investments.

Not setting up an emergency fund

Not having funds reserved for tackling emergencies such as a sudden health downturn or accidents can cost you your future or sometimes even the life of a dear one.

Reserve an emergency fund that can take care of your expenses for up to six months or even a year. Ensure that the funds are readily available during emergency. Avoid stashing up your emergency fund in the form of investments that cannot immediately be converted to liquid cash. The money may not be available until the investment matures.

What use are emergency funds of if you cannot use them during one?

Abstaining from having a frank talk with your employers about your salary

Often, women take a backseat during salary hike discussions fearing that it would put them in the bad books of the employer. It isn't so. Realise that you have got only yourself to speak for you. You may not be immediately successful in getting a hike, but at least you would have made a start.

Having a frank discussion with your manager about your performance at work and your financial expectations could fetch you a hike. If your negotiation succeeds and you get your hike, it's wonderful. Even if the hike fails to match your expectations, you might end up with more money than before.

Not setting a right example for your children

As a mother, you can establish strong fundamentals of financial literacy in your children. Show them by example. Be independent with your own financial management. Your financial habits can communicate to your children the importance of managing one's own finances and making wiser financial decisions. You can also raise more confident children, especially daughters, who are capable of handling their finances without fear.

(Contributed by Promoth Manghat, vice president - global operations, UAE Exchange)