This year has been one of those turbulent years, when continuous changes kept taking place amidst a lot of shocks and surprises. And looking back at 2021, I am truly grateful that I am still standing at the end of the year and even more thankful for the life lessons I learnt.

On the last day of the year, I wanted to share one of the life lessons that I learnt this year: Financial management is a skill that everyone needs to consciously build. This is especially more relevant for women.

I had thought I was reasonably financially savvy until this year’s events forced me to reconsider the way I was managing my finances and to start looking at options. As one friend put it, ‘from an extremely conservative financial management style at one end of the spectrum, you are now looking at the other end and you need to proceed slowly.’

What was my extremely conservative financial management style, it was simply to make sure that I stayed roughly within the limits of expenditure that I had set for myself each month and to transfer my savings into fixed deposit accounts as soon as they reached a certain limit. I thought this was enough to safeguard against shocks as well as prepare for eventual retirement down the line.

Due to the heavy medical expenses of both my parents, moving to a rented apartment etc., there was a dent in my savings that made me think again on whether this was the right way to save. Especially the fact that while I was able to face this year’s shocks, if I had to face recurrent shocks for a few years, I would be drying up my retirement savings and there would be nothing left to weather the shocks in my old age. And this had me reading up on different options, reaching out to friends who had tried out some of these options.

The biggest investment that I made after reading up and consulting friends was to invest in a comprehensive health insurance. It might be surprising that I had not thought of this as a basic step before but all these years, despite the hospitalization expenses incurred during my road traffic accident, I was able to manage well within my income and during the last five years, my workplace had a medical insurance coverage so it did not seem a priority for me. With my parents’ medical expenses and my role at my workplace being phased out in December, I realized that the time one needs health insurance coverage is in-between jobs and more so, after their retirement and this is the period that most insurance companies don’t cover. After going through various health insurance packages, with the help of an insurance broker, I finally selected a health investment package that would cover me till the age of 70 years and which would transfer an investment amount that should help with any health expenditure beyond 70 years. Some of my friends said that they would not think of getting such a package because who knew whether they would live up to 70 years or whether the company would still be there at that point. I guess that was my previous stance but I have come to realize the key point, ‘what if you do live beyond 70, wouldn’t you rather be independent and self-reliant regarding your expenses, particularly health, than having to rely on others?’ As for the company still being there, that is a risk that one needs to take and thus it is important to select a company that has a good record.

The second investment choice I made was to invest in some shares on a couple of companies. Nothing big at this point in time, just small investments to let me understand better how one should invest in stocks. Again, following a friend’s advice, I reached out to a stock broker to help me navigate my way around. I have just started with IPOs, choosing to invest small amounts in companies whose company profile and annual report interests me.

My third investment choice was to simply diversify bank accounts so that I could try out a few of the different fixed deposit packages. I guess I am still relying to a large extent on my financial management habit, but moving slightly out of my comfort zone of only having one service provider to trying out different packages with different banks.

There are sure to be other options for better financial management practices. I am still on the initial stages of the learning curve and will be actively reading up on such practices hereafter. However, the key purpose of my sharing a key lesson that I learnt this year regarding the need for diversifying financial management practices is because most of the women that I spoke to had absolutely no idea of the options not even the conservative approach that I used to rely on previously. I think it is important for all women to understand financial management practices so they can make informed choices that best suits their needs.

Here’s to your broadening your understanding of financial management practices and making wise choices in 2022!