Women are self-made. From being a loving daughter, a supporting partner, to a caring mother, a perfect homemaker, a responsible employee to successful management roles – all roles are perfectly handled by women. Women are making their mark inside and outside the house. There is nothing they cannot do. But there is one thing that women often tend to neglect. Managing their finances. They tend to depend on their fathers or husbands for the same. It’s time to show them that women are independent. Also, managing money is not rocket science. Whether it is a homemaker or working women, women have to manage their finances on their own. Here are some smart money moves for women that will help in managing their finances.
1. Save for rainy days
It’s always better to save for an emergency than to look for loans or use credit cards. It saves a lot of stress and interest payments. Saving is one habit that one has to inculcate. It’s the first step towards managing one’s own money. Women always saved money in kitchen jars. Now it is time to save money in a bank. Create an emergency fund so that it can be used in case of emergency. Know how much you should have in your savings account.
2. Live simple
Living simply should be your motto in life. This is one of the smart money moves that actually makes a lot of difference. Women will be saving a lot if they cut down unnecessary spending. Just because an item is on sale doesn’t mean you have to buy it. Shopping and women are inseparable but know when to spend on what. Do not get attracted to sales and offers. Create a budget and stick to it. Self-Budget is very important. If you are unable to figure out your spending make a note of each and every expense for two months. Hence you will understand how much are you spending on necessities and how much on unimportant things. I’m not asking you to cut down on your wants but cut down on unnecessary shopping.
Follow the 50/30/20 rule for your money. 50% goes for needs, 30% goes for wants and 20% goes for savings and investments. It is not a hard and fast rule but a general guideline for managing money. If you can save a lot more than 20% it’s well and good but don’t go below 20%.
3. Pay off debt
Women tend to have more debt than men. That’s not just because they spend more but they forget to pay their credit card dues. Women also tend to take a lot of debt from their relatives. Sometimes it is on interest and sometimes not. It’s important to not take loans in any form to spend it on wants. Take a loan only if it is necessary. If not necessary then don’t take a loan.
4. Get a life and health cover
Insurance is mandatory for every person. You cannot be happy with your fathers or husband’s life and health insurance. Taking life insurance, medical insurance and auto insurance is a must. Remember that your life insurance should be 10 times of your annual income. Your health insurance should be somewhere around Rs 5-25 lakhs. Having sufficient coverage is very important for all insurance policies. Insufficient cover poses a substantial financial threat in times of emergencies.
5. Take control of your finances
Take control of your finances. Women tend to give control of their money to their fathers or husbands when it comes to investing and saving. Do not wait until the day you regret such decisions. Talk to them about possible investment options available to you or go to a financial advisor. But you should be the one who decides where your money goes. Develop knowledge of different financial products and investment avenues. You can go to a financial advisor or others but they are only there to advise. You will have to decide for yourself. And for that, you need sufficient knowledge. Be aware of where your money is invested so that you will be aware of any wrong decisions you took in the past. This is one of those money moves that is very important.
6. Have a financial plan
Have financial goals. Few financial goals are to save up for retirement, plan for kids’ education and marriage, save up for a vacation or a piece of jewelry. Set your goals and work towards them. Draft a plan to achieve them. Understand your risk appetite and invest accordingly. Keep monitoring your progress and rebalance your portfolio if needed. Talk to an advisor. Tell them your financial situation and they will guide you through your investment journey.
Women have been doing extremely well in all walks of life. Being the multi-taskers they are, they balance their life well. Taking control of their finances should be the priority now. Remember that investing is not just for men. Become independent in life and manage your own money. Also, have a say in your house expenses and take charge for yourself. Follow these smart money moves and become smarter!
Happy being self-sufficient!