When it comes to controlling the purse strings, women do remarkably well. Women also ace in managing their day-to-day household budgets. But the wealth building part of the equation is often ignored by many. Even working women lack the confidence to take charge of their financial decisions and often depend on their spouse for the same.
Yes, managing money can be quite a task, especially for working women who have flourishing careers and family to take care of. However, it isn’t impossible. Careful planning and a little knowledge can help women gain control over their finances.
Tips to Improve Financial Situation: Guide for Women
So, here are some ways women can improve their financial situation:
⦁ Be Aware of Your Spending Habits
Of course, it’s vital to indulge in the things which give you happiness (shopping is one of those things). However, it is also crucial to manage your finances and channelise them in a productive saving vehicle. Swiping your credit cards regularly and going overboard with your shopping spree can diverge you from being a prudent saver.
Therefore, every month, find out what your spending habits are, how much money you have coming in and what outstanding debt you have. This exercise will help paint a better picture of where you must cut back.
⦁ Be Prepared for Emergencies
It’s good that you are planning for the financial goals of your family. However, it should not be at the cost of your own financial security. Therefore, in order to tackle unfortunate circumstances like divorce, job loss, or death of a spouse, every woman should create an adequate emergency fund. Make sure to have at least six months of your monthly expenses in this fund.
⦁ Protect Yourself Through Insurance
Insurance policies are equally important for women as an unpleasant event can affect the overall financial well-being of her family. The goal of insuring is not just about benefiting and providing for someone else. It is also about ensuring that you don’t become a burden that others must provide for.
Hence, make sure to get enough insurance coverage for yourself by opting to buy term insurance. Term plans provide high-risk covers at very affordable costs. Opt for term cover that equals at least 1o times your annual income. To find out exactly how much insurance you need, you can use ‘Online Term Insurance Calculators’ offered by insurers like Future Generali.
The rising cost of healthcare in India and the increasing incidences of critical illnesses also make critical illness insurance vital for women. This insurance can help provide coverage against women-related diseases like cervical cancer, breast cancer and cardiovascular diseases.
⦁ Invest Towards Your Future Goals
Financial planning is about preparing for your future goals, be it buying your own vehicle, saving up for an international trip or helping your spouse with the down payment of your dream home. To turn these goals into reality, a plethora of investment products are available today. But it is often found that women have a greater affinity towards “safer” options like FDs, PPF, and NSC.
However, they should also consider equity-linked investments like ULIPS and mutual funds. These investments will not only help garner good returns but also outscore other investment options in terms of lock-in period and taxability of gains.
⦁ Protect Your Retirement
Most individuals start thinking about saving for their retirement only in their 40s. Women are no exception to this; however, this can prove to be a big financial mistake. Every woman should start investing towards her financially secure retirement right from the start of her career. Because as your investments get more time to grow, you benefit from the power of compounding.
We hope these financial tips evolve every woman as a careful spender and smart saver to keep her financial frame strong and growing.
Always remember that your attitude towards money and your readiness to take your financial future into your own hand will determine your financial security.