Gone are the days when marriage was the only option for a woman’s financial stability. In today’s modern world, women are breaking stereotypes every day. They are holding prominent positions, be it in their households or in the corporate world. As more and more women are becoming financially independent, it has become extremely important for them to take charge of their finances too! Financial awareness and sound money management skills can provide women with a deep sense of security and help them in saving and invest for the future. So how can women be financially successful?
Here are 7 financial tips that every woman should keep in mind.
First things first, set your financial goals
Setting financial goals is the first essential step towards achieving financial independence and meeting all your important milestones. Financial goals help to determine what you want to achieve with your money. These goals can be buying a house, taking a vacation, paying for your kid’s education and marriage, or even something smaller like buying a piece of jewellery or a new gadget, etc. These goals can thus be categorized as short-term (6 months – 5 years), mid-term (5 – 10 years), or long-term financial goals (10 years and more).
Financial goal-setting makes the whole process more target-oriented and gives it a sense of purpose.
Create a budget and stay involved
A budget enables you to spend within your means and save sufficiently for your financial goals. A good starting point is to know your finances and review your accounts every week or fortnight to keep a check on your spending habits as well as your savings. To create a budget, you need to allocate funds into separate accounts like household, medical, transport, food, personal, entertainment, etc. You could also consider maintaining an expense tracker application or a budgeting tool that links to your bank accounts, categorizes your expenses, and send alerts when your bills are due for payment. Once you have created the budget, extrapolating it can help determine how much inflation-adjusted cash flow will you need for the next 10-15 years.
Save but invest too!
Saving regularly bit by bit from your monthly salary goes a long way in achieving the financial freedom that you had always dreamt of. But saving and saving alone will not help you become financially secure. It is equally important to channel your savings into the right investments to grow your corpus. You can invest your savings in a whole range of options like equity, mutual funds, gold, debt instruments, and real estate depending upon your goals and risk appetite. So go ahead and invest your savings in the asset classes that suit your requirements. A systematic investment plan is a popular investing route that you can adopt. It never hurts to seek help from experts if you find this whole process daunting.
Plan for taxes and debt
It is important to understand how we can invest to save taxes. There are a gamut of tax saving instruments like ELSS, Ulips, PPF, NPS that are available with different risk-return features. Managing your debt is also an important financial responsibility and clearing off debt should be one of your priorities. We should allocate a part of our monthly salary to pay off our loans so that we can retire peacefully with no debt sitting on our heads.
Plan for your retirement, it’s a must
Retirement planning is important to be financially secure when you do not have a salary to support yourself. It becomes even more important for women as they tend to live longer than men. Hence, on average, they will require more money during their retirement than men.
Save aside for emergencies
Emergencies can strike anytime and can make your financial planning efforts go for a toss. As a thumb rule, it is advisable to cover for at least 6 months of your expenses in an emergency fund. It is best to save this money in liquid instruments so that they are accessible whenever the need arises.
Last but most important, be confident of your abilities
It is very important for women to build their confidence that they can take control of their personal finances. It has been widely seen that women generally allocate more of their finances to savings than men and yet they invest far less in riskier assets than their male counterparts. This is primarily because they are not confident enough to manage their finances on their own. However, with education and better understanding, they can overcome this problem.
As is evident, a woman does not need to be an expert to become financially independent. You only need to have a clear idea of your finances and a structured plan to how to put them to good use. And if your financial goals are a little complicated, you can consult an unbiased and trustworthy financial advisor to guide you through the process.
How should women start financial planning?
With Tavaga’s goal-based investment process, you can start working towards your goals NOW! and enjoy financial independence in the future.
Tavaga’s mobile application ensures that your money gets invested in various instruments (equity, debt, and gold) at regular intervals based on the goals that you have defined.
So, start investing with Tavaga and take charge of your financial wellbeing!
Disclaimer: This write up is solely for educational purposes.
Tavaga is everything you need to start saving for your goals, stay on track, and achieve them in time