An NCWRR (National Center for Women and Retirement Research) study showed a direct correlation between financial habits and a woman’s personality. An optimistic outlook, openness and willingness to change and assertiveness are some of the qualities that tend to lead to clever money choices.
Many women don’t know where to start and often stay confused about their money matters. Apart from this, money is often seen as an emotionally charged issue, especially in countries like India. It is associated with control, love and power. These beliefs often shape the way society perceives money.
For businesswomen and working women who aren’t sure where they should financially be, here are 5 tips to keep in mind by Shristi Patni is a content writer and owner of F and B Recipes.
Educate and set smart goals
The #1 mistake that almost all women tend to make (at least once in their lifetime) is depending on someone else to manage their money for them. It can be anyone from their boyfriend to their spouse, father, etc. for any and all types of financial advice or security.
Begin by investing in money management workshops and classes that help gain financial literacy. The next step is to set smart financial goals. Seeking the help of a professional at this point is advisable.
Practise the secret mantra
The rule of thumb is to spend less than the total income. This will ensure that no matter what, there will always be some savings. ‘Mindful spending’ can go a long way.
Every expense needs to be monitored closely such as a harmless cup of Latte every morning that costs £1.30 amounts to a whopping £474.5 per year.
Create an Emergency Fund
It’s wise to have a saving that can support all the expenses for 6 months. Any emergency like a loss of a job, medical bill, etc. can be easily managed with emergency savings.
Otherwise, these unexpected bills can quickly lead to an ever-mounting mountain of debt or a financial hole that will seem impossible to crawl out of with each passing day.
Women must have their own assets and to create them, they need to put their financial literacy to use. Investing in mutual funds through SIPs is a good way to start. Another excellent way to build an asset is to purchase a property such as an apartment/house.
Plan for Retirement
This one’s perhaps one of THE most neglected aspects of financial planning that women completely ignore. Depending on the spouse, family members and children during their old age is something they’re completely okay with.
This mindset needs to change starting today. Focus on creating steady sources of income that will assist you during the times when you’ll need it the most.
Since 30% of the total income goes into paying taxes, it’s appropriate that you invest in tax saving ELSS mutual funds. This will serve as a dual benefit as it’ll help in tax savings as well as retirement planning.
Behind every successful businesswoman is her financial literacy. Taking control of finances and learning how to invest are good places to start. Seek the help of professionals along the way to ensure that you can live without worrying for your future.