Disclaimer: The names and photos used in this article are hypothetical and the incidents stated are used purely for the purpose of understanding. Any resemblance of the said names or incidents in real life are purely coincidental and not intentional to harm the reputation of any person living or dead.


Kamala is a 35 year old divorcee with a son, Shonak, who is  8 years old. She has gone thru lot of emotional turbulence during the process of separation and divorce. She got a decent compensation to look after her son and herself. Now, she stands all alone to face life.

Biggest challenge she can envisage today apart from coping up with singlehood is Managing her finances. A Graphic Designer by profession, she has no clue about money management. She has been handing over her monthly salary to her husband for investments and never bothered to learn more about it. Today she is cursing her ignorance.

There are many women single parents who are not confident about their money management skills. There are relatives and friends who can offer advice. But what really they look forward to  is an independent and unbiased financial advise from an expert who keeps the client’s interest and life goals in mind than mere investment products.

Some of Financial planners are addressing this very need.  They facilitate clients like Kamala on the path financial awareness thereby reaching financial achievements in life.

Kamala should take a 5 step approach to streamline her financial challenges.

  1. Financial literacy

‘Education is only remedy for fear’. Kamala should get herself acquainted with basics of personal finance. This will help her make an informed decision about her finances.

  1. Emergency funding

Being a single earning member, any unforeseen emergency like sickness, job loss can throw a major Challenge. In order to combat such situations, at least three months daily expense worth money should be invested in high liquidity instruments. One third of it can be kept in savings account and remaining can be invested in fixed deposits or liquid mutual funds as per tax bracket and risk profiling.

  1. Wealth protection

Kamala has responsibility of child’s future needs for education, higher studies and marriage. She is going to work hard towards achieving these goals. but, what if destiny has other plans for her and she is no more !!So, first thing she should do is to take adequate Life insurance….which will be able to handle all financial obligations towards her loan liabilities, child’s education, higher studies, marriage and day to day expenses till the child becomes financially independent.

While doing wealth accumulation, sudden occurrence of critical illness, accidents can burn a big hole in one’s pocket. To protect her wealth from such incidents, Kamala must take Personal Accident (PA) Cover  and Critical illness (CI) Cover.

  1. Wealth accumulation

With the emergency fund and wealth protection mechanisms in place, Kamala can now concentrate on Wealth creations activity.

Kamala has primary financial obligations  towards her child’s education and marriage.  She has also to provide for her own retirement. She has to repay her loan and also, have some money for travel and other recreational activities.

The compensation received after divorce should be used judicially for these purposes.

Before working on investment strategy, it is necessary to assess her Risk Appetite towards capital safety and investment returns.

Based on risk profile and time horizon of her goals, appropriate asset allocations is designed  and accordingly, investments planning is offered. Asset allocation strategy would primarily be formed to beat inflation over the years and make her goals financially achievable.

  1. Legacy transfer

Kamala has personal assets like house, investment assets and jewellery. She must ensure that all her assets are complete in necessary compliances like KYC and nominations. She must define who are the beneficiaries and what benefits they are to receive in case of her demise. For this purpose, she must have a Will.

However, since her son is still minor, a guardian must be appointed till the son acquires ‘Major’ Status at the age 18.

By taking these five steps, Kamala will acquire financial awareness, financial alertness and embark on her journey towards fulfilling her financial goals.

Qualification : B.Sc.(Statistics), MCA, CFP
Make An Appointment
Mrs. Shilpa Wagh, is Chief Financial Coach at Wagh Financials. She is one of very few FEE ONLY Financial Life Planners. She is a Certified Financial Planner from Financial Planning Standards Board,... Read More

Leave a Reply