Women today have taken charge of their finances and are active contributors to the family income. They are making progress in various sectors and thanks to the change woman today have become financially independent. However, we must not mistake financial independence with financial freedom. Financial independence means you are able to take charge of your current financial situation. But you will gain financial freedom if you are able to maintain your lifestyle throughout your life. This can be attained only if you plan efficiently for your future. Here are some smart financial moves every woman must make to attain financial freedom:
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Most of the homemakers and working women are often dependent on their partners for carrying out banking activities and for planning their finances. Women today must take finances on their own hands and familiarized themselves with financial terms and the decision making process. A majority of women are still stuck with traditional methods of saving money.
To broaden your perspective about finances you must start an open conversation with your partner, parents or financial advisor. Start reading about financial planning and chalk out a plan to start your investment journey. Start from making small investments and gradually proceed to the bigger ones. For example, you can start with a 1 year RD account. Invest the maturity corpus in an FD. This way you can proceed towards disciplined investments like SIP, PPF, etc.
See Also: Why Women Need to do Financial Planning?
We have seen that Indian Homemakers often save money from their daily household expenses. But the main question is, is that money enough to tackle financial emergencies? Thus every woman must keep some funds aside to tackle financial emergencies such as severe illness, sudden loss of a job, wherein the regular income of the family stops.
You can consider saving money on your own by setting up a savings account. A Working woman must also create emergency funds to efficiently manage career breaks. Ideally, you must save a corpus that should cover 3 to 6 months of household expenses.
Alongside this, you must also consider utilizing this money to gain an extra income through investment in liquid funds or saving money in a high yielding savings account.
Every woman must understand the basic difference between saving and investing. Most women still lack some basic financial knowledge. Instead of keeping surplus funds idle in bank accounts, you can consider investing them in various instruments like NSC, FD or PPF. You can avoid riskier investment if you do not have good knowledge about them. However, if you have the necessary knowledge and risk-bearing ability you can go ahead and explore investment options like SIP mutual funds or ELSS to accumulate a good corpus for retirement or save money for long-term personal goals.
Planning for your finances means planning for the future. Financial planning helps you to secure your future and remain financially independent. Identify and prioritize your financial goals and start making investments accordingly. One of the best investments for a working woman is PPF. It helps you save a corpus for retirement years as well as saves taxes. Similarly fixed deposit and NSCs can help you appreciate your idle funds and save for short-term goals.
If you have already saved money in traditional investment options then you can proceed towards equity investments. Equity-linked products can help you get tax benefits and better yields than any other investment product. Saving and investing money will not only help you fulfill your goals and allow you to support your family in difficult times.
Most often the woman does not consider saving for retirement. The reasons can be many. Sometimes they believe they have their husbands to look after their expenses, sometimes they believe their children would take care of their retirement expenses, etc. and thus they do not prioritize retirement.
This can be a big financial mistake. Every working and non-working woman must devote money toward retirement. If you start saving for retirement early then a small contribution will go a long way to give you great returns through compounding. If you do not have a steady job or you are a home-maker, try saving money every month and contributing a portion of it in retirement planning instruments. For example, you can simply save money that you would otherwise spend on shopping and contribute it to the PPF account.
See Also: Financial Planning for Newly Married
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