We discuss the important financial steps women need to take before career transition or breaks
Career transition or break can happen with women due to relocation after marriage
Career disruption can also take place when women start their families with birth of their children
There could be career breaks on assuming the role of eldercare
It could also due to transition into self-employment and entrepreneurship
It could also be a mid-career course
All of them need financial preparation
Basically, the preparation is for a period of lower, low or no income
Plan for career or job break well in advance
Financial preparation needs to start about a year from the start of career or job break
Save for 30-40% of monthly pay and keep it aside for the period of job break
Plan on how to deal with the regular repayments of outstanding loans
The savings has to care of other commitments and obligations including insurance premiums and regular expenses
This has to be part of your emergency fund
Money can be invested in a mix of liquid funds, short term debt funds and arbitrage funds
The money in emergency fund has to be worth 9-12 months of expenses
You need to make arrangements for regular income
You can use Systematic Withdrawal Plans (SWP) of mutual fund investments in emergency fund
Regular income is organised with the regular sale of mutual fund units
Avoid tapping into long term savings to fund expenses in this period
On using long term savings, you turn back the clock on investments