Financial planning basics are somehow similar for men and women. Yet, in some ways, it is different for a woman than a man due to specific life circumstances. Not all, but in general, women take more breaks from their career when compared with men. The reasons can vary from childbirth to family responsibilities and so on.
A career break also means no income for a certain period. This aspect can disrupt regular savings and investments. But a proper financial plan can never drift away from being financially prepared at all times. Financial success grows from seeds rooted deep down the soil with intense mental work.
Three primary attributes are a challenge for women’s financial planning. Firstly, women live longer and tend to make comparatively lesser money. Secondly, they think of money as benefiting their family, and finally, they are often intimidated by investing.
But it is the 21st century, and gone are the days where financial spectrums revolved around the father, spouse, or a single person from the family being the financial head. Here are some practical financial tips, or in better terms, a full-fledged guide to an enhanced financially planned life.
Things to Do When Planning Finance for Women
Create Your Financial Calendar:
Jotting down improves the recall of essential information. It is an effective way to get your mind to focus on crucial things. So if you don’t trust yourself when it comes to remembering to pay your taxes, pull a credit report, or a car tune-up, the best place to start would be by building your financial calendar.
The financial calendar can be for a year, a quarter, a month, or even a week. Jot down your essentials, and make pre-planned moves without missing out on anything crucial.
Make Sure you Check your Interest Rates
Do you know what paying attention to your interest rates can give you? The answer to; the loan you should pay off first, the savings account to open, and why credit card bills are so high. Knowing your interest rates allows you to weigh down the loans you have with the highest interest and get them off your chest.
You also take away benefits like saving schemes with the highest interest rates and returning much more than you invested. It also never lets you forget the compound interests compiling on the credit cards.
Build Boundaries Around your Budgets
If you are like most folks going on without crafting and following a budget, you might want to rethink that. It might not seem very easy, but a budget is simple. It is a spending plan that takes into account current and future incomes and expenses. You need to know where your hard-earned money is going, and a well-crafted budget has you covered on that.
Budgets help you keep on eye the prize of things you buy, ensure you don’t spend money you don’t have [you know what I mean], prepares you for emergencies, shed light on bad spending habits, and the list can go on.
Learn to Shop Smart
To shop is essential. After all, humans are the product of ‘unlimited wants.’ But there are a few methods that you can inhabit into your shopping criterion, and they can get you to where you want to go.
- evaluate your purchases through their cost of use. You may think you are running a financially responsible deal if you are buying a ₹700 worth pair of sandals over ₹1200 worth pair of sandals. But what happens when you ignore the quality factor? Just imagine how many times you would use it or wear it when it is better in quality.
The same applies to tech equipment, kitchen gadget, or apparel. When you have bought the ₹700 worth of sandals, you will most likely buy them three times in the same year again from low-quality damager=, which will cost you ₹2100. The smarter choice for you would be to spend ₹1200 on a quality product that will last a year instead.
Keep One Eye on your Credit Score at All Times
Keep in mind that your credit score is a snapshot of your credit health. Your credit score lets you know your current credit status and helps you get the best offers on loans and credit cards. These are critical aspects when you are flowing with your financial plans.
A good credit score has many more advantages than you think. You can enjoy the benefits of lower interest rates with just having a healthy credit score. Financial supporters sure do have some rewards waiting in line for their best customers, and this might be an excellent opportunity for you to get them aligned with lower rates of interest.
Prioritize Saving as Part of your Monthly Budget
Saving can be hard when there is so much out there that you want to spend on. When a certain per cent of your income goes to your savings, you know there is something you can always rely on. Traditionally women are the ones who have shorter working tenures and longer life expectancy, which makes it essential for you to save.
You do not have to send out large amounts to your saving accounts. Small but sensible steps help you grow your money. These savings can either come in handy for you to pay off your loans with the highest interest rates or close compounded credit cards that don’t let you breathe.
Set Financial Objectives
Do you know why you need a predetermined goal or objective? Before you do anything about your finances, it is essential to set some goals for your future. We all know tomorrow isn’t yet here, and we can never say what the future holds. But we all live today in the hope for tomorrow, and that’s what keeps the world going. The same goes to setting high financial goals.
Having goals is essential to see yourself in a more stable state. Do you know why? When you do not have a plan, you tend to say I will save more next month. But when you do have a goal, you say you will save ₹5000 extra next month. These are called predetermined definite figures. With a substantial amount as your request, you will work towards it and make your moves.
Another excellent example of this is if you plan to buy a house for yourself, then setting a deadline will help you bring that plan to life with better planning and contributions.
Have a Backup with an Emergency Fund
You can always be in a safe place when all of your uncertainties are covered with an emergency fund. Just say your car stops working out of the blue, and it is the end of the month; it helps to know that you have money stacked to fix it and cover up the unplanned cost. It is also suggested to have three months of living costs tucked away in accounts for something uninvited ahead.
It is hard to save large and lump sums, but putting in small amounts every month could help you gravitate to that decent pot of cash. These small amounts for emergencies give you a fund without you even realizing it.
Always Consider Investing
If you think of something other than saving money and giving you many better returns, the next best thing would be investments. Yes, at times, investments might seem daunting, but it doesn’t have to be. Nowadays, with investing platforms like Zerodha, Paytm, Upstox and Groww, it is possible to dip your toe into investing as little as you like, with or without experience.
Investing does not just have to be long term; it can be short term or for a median period too. It is time you utilize accessible sources that allow you with big-time investment opportunities. If you feel you can’t keep up with the pace or track investments, platforms such as ET Money and Groww also have solutions to that. You can leverage auto-tracking, manual tracking, and so much more, and not worry about getting lost amid the big wave.
These are just some of the many ways you can start your investing journey. There are many such opportunities out there waiting to be optimized to help you grow financially. Your only job is to utilize it wisely.
Make Plans to Retire Like a Queen
While you are still working, do your back calculations of how much money you would need after your retirement. Do not forget to include your inflation and taxes. Your investments and tax planning should revolve around achieving the figures you calculated.
Most importantly, make career decisions that put you first. All of these factors let you age just like a number. Even if you love working, you can plan for your post-retirement career in your golden years and enjoy the financial independence you have always loved.
The Bottom Line:
This is just the tip of the iceberg, and of course, there is more from where this came from.
“If you fail to plan, you are planning to fail.” -Benjamin Franklin
Planning, especially financial planning, is critical to all, and it is a source that allows tremendous growth in an individual’s life. Accommodating expenses or objectives of the new member in the house requires financial planning. Follow all the tips listed in this article for foolproof financial planning.