Financial planning, money management, and investments have traditionally been male-dominated and male-oriented.
Even with women excelling in all fields of life and becoming increasingly independent, their financial planning still takes a backseat and is primarily handled by the men of the family.
We recently did a study on women and their money power, which revealed that overall, 51% of women in the country are either not investing at all or are unaware of their investments.
Yes, the number resounds like an echo. One that we are striving to change in the upcoming years.
Women have differentiated financial needs — differentiated earning potential, career peaks, career breaks, longer life expectancy, and a different approach & mindset toward financial planning.
It is thus imperative for women to take charge of their money through smart planning and investing best suited for their needs. It can seem like an intimidating step to take, to quote Chinese philosopher Lao Tzu, “A journey of a thousand miles begins with a single step.”
Here are some of the key points that women can follow to take charge of their personal finance:
1. Be Aware Of Your Earnings And Expenditure:
The first step in the journey of becoming financially fit and independent is to understand your financial patterns. This means that not only is it essential to be aware of your earnings but also be aware of your significant expenditure.
Use a journal or an online spreadsheet to write it down and understand your financial behaviour. Make sure you jot down all details as they will further help you make decisions accordingly.
2. Have SMART financial goals for your future:
Set financial goals from the very beginning. Without the presence of an end goal in mind, any activity seems pointless. Whatever your necessities and aspirations are, write them down and then work on creating a path to achieve them.
It is very important for these goals to be SMART goals- Specific, Measurable, Achievable, Realistic, and Time-bound.
Keep aside at least 20% of your monthly income to fulfil these goals. Once you have identified the goals with timelines, plan your short-term and long-term investments.
3. Build an Emergency Fund:
An emergency fund can help one stay afloat in a financial crisis such as the current one.This fund should be at least six months of your expenses and be quickly and easily available when required.
The money should be liquid since you’ll need it when an emergency strikes. This fund can be created with a savings account or with liquid and arbitrage funds that target better returns.
4. Prioritize Life and Health Insurance:
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