Women indeed wear multiple hats! On any given day, they play at least ten different roles –housekeeper, chauffeur, cook, tutor, caretaker, coach, all while being employed in a full-time or part-time job.
Unfortunately, amidst this wide array of responsibilities, women often neglect a crucial aspect of their life – managing their own finances – and leave that to somebody else. While it’s true that most women are in charge of paying the household bills, what they often fail to do is do is any personal financial planning. This means retirement plans and other important investments often take a backseat.
Let’s make a resolution to change this in 2018 and give focus to our finances too. Here are the Top Five Money Management tips exclusively for women.
#1: Start by tracking your cash flow
You can’t invest, save or plan for your retirement if you don’t know what’s happening to your funds. You must have an accurate idea of what funds are coming in and what’s left behind after expenses and taxes. You can use any of the several budgeting apps that help you keep track of your expenses and income.
Once, you have these numbers sorted out; you will know whether you’re facing a cash surplus or deficit situation. If you have surplus cash, kudos to you, you can move on to saving and investing. If you’re faced with a deficit, it’s time to remedy and take stock of your financial situation.
#2: Save before you splurge
Yes, it’s quite tempting to splurge on new outfits or gadgets, especially when one’s bombarded with alluring ads everywhere. But, remember that living from pay-cheque to pay-cheque is never a good idea. While one can never guarantee an emergency-free life, what you can do is to tackle some of life’s surprises with the help of your savings.
The earlier you start, the better it is. The rule of thumb is that you should save at least 25-30% of your monthly income. Remember that savings doesn’t just help you meet your emergencies, but also helps you in realising your life’s goals.
#3: Don’t just save, invest the money
While saving is essential, that alone isn’t enough. Inflation ensures that prices are always rising, and it is therefore, essential that your savings grow at a rate that is much higher than the rate at which prices are rising. Money lying in a bank account is therefore, not the most productive use of your savings. You need bigger weapons in your arsenal especially if you have to meet your life goals. The trick is to include various other investment options like mutual funds, fixed deposits, PPF, equities and diversify your investments such that you are able to maximise the returns on your savings.
Not sure about which ones suit your risk appetite? Get the help of a trusted and credible financial planner to chalk out a customised investment strategy for you.
#4: Don’t skip good old Insurance
Most people make the mistake of buying insurance only for tax-related reasons or skipping it due to its low returns. This is a grave mistake. Unplanned life events can set you back financially. It is therefore, important to ensure that you have adequate life insurance and health insurance, especially if you have dependents (kids, aging parents, spouse).
Today, insurance plans come with several add-on benefits and other features. Make sure to pick a tailored plan that suits your specific needs and that of your family.
#5: Educate yourself on financial planning
The last and most important tip is that all women should take steps to educate themselves on financial planning. Don’t delegate this to your husband, father, or brother to handle your money matters for you. Gone are the days when family finances were the sole responsibility of men. Start by taking an active interest and improve your knowledge by reading up.
Confused on how to go about it? Get the help of an expert financial planner to explain things for you and get you started on the right track.
All you ladies out there, let’s pledge to make smarter financial decisions in 2018. Use these smart tips to keep track of your finances and work towards making your financial dreams come true.