27-Sep-2016 written by : FSI-Team
It is important for a woman at every life stage to give a thought to her financial health. Whether investing in one’s business or looking to bolster personal finances, it is imperative to explore various investment options, make a savings plan and more importantly, stick to it. More than a third of women while contributing extensively to the family coffers invariably lag behind in critical aspects such as wealth creation, and having a long-term investment plan.
Let’s take a look at some targeted advice on money management for women.
Changing spending habits – Do you find yourself spending more than you can afford? If the answer to the question is 'yes', it's time to slowly make a change. Start off small – for example, if you dine out thrice a week, cut it down to once. At the same time, keep track of your expenses – whether in a little diary, or one of the numerous phone apps doesn’t matter – but ensure that you understand your spending patter better, so that you can start trimming excesses. Essentially, cut back on what you want, at the same time not compromising on what you really require.
In case you own credit cards, you need to be even more careful. The convenience of buy now pay later can lead to building up a huge debt. This high cost debt not only has the potential of throwing your financial planning completely off the mark, but can adversely impact your credit scores (popularly known as CIBIL score)
Shop around – Before you make a purchase, especially a big one, shop around. Compare prices and seek out the best deal, bargain if you have to! With the alternatives today, including online shopping, it is much easier to get god prices at the click of a button.
Consider financial planning – If the very idea of putting together a budget scares you, why not avail of the services of a financial planner? In this way, not only will you have someone to guide you but also ensure you don’t lose focus along the way. Usually, your financial planner can help you choose your investment options as well.
Overestimate your financial need – At every stage, factor in more money than you may actually require. Remember, with longer life expectancies – and especially so for women – you are likely to require a larger corpus to take you through retirement. Inflation can erode your money, so keeping that in mind as well, save more for later than you’d planned.
Diversification – As the adage goes, don't put all your eggs in one basket. Explore the various investment options available to you, and spread your money across a few. That way, even if one particular investment doesn’t work out, you have a readymade back-up plan. Further, you are likely to make more money as your investments reap rewards.
Invest wisely – As the adage goes, if it looks too good to be true – it probably is! Don't fall prey to online scams and other get-rich-quick schemes; remember there are really no free lunches. Instead, plan your investments wisely and surely but surely build up your nest egg.
Plan for your retirement – At every step of your financial planning, keep your retirement in mind. Remember, it is easy to focus on your present needs, but we do tend to ignore the future. However, retirement is a reality for all of us, and with likely no regular source of income then, setting aside money for that day is only prudent. Healthcare and hiring reliable help can be a large expense as you age, so do factor in those as well. Setting aside a small amount of money each month, starting now, would result in a substantial corpus if invested well.
Stay healthy – Not only is being financially healthy important, but so is your physical fitness. To this end, make sure you are adequately insured, to take care of any unforeseeable events. There are a variety of insurance solutions to suit your need – weigh your options carefully and select those that suit you best.
Check your Credit Score regularly - Your credit health is as important as your physical health. Do pull out your credit report from any credit bureau and check on the current score and correctness of data.
While saving money is not always easy, and it is probably easier to get carried away with the attractive shopping offers, remember that it is always prudent to save and remain self-reliant. Even if you do have a strong support system in place, it is wise to take control of your own finances and save for that proverbial rainy day.