Here are a few smart money management tips that can help you get on the road to financial freedom in no time. Read on.
Women are smashing stereotypes on all fronts – be it flying a plane, starting a company or being a sole bread-winner of the family. But even today, a majority of women in India still hesitate to get involved in money matters and let somebody else in their family manage their wealth. Things are gradually changing and more women are now taking charge when it comes to managing their finances.
So, if you are somebody who is new to the world of finances, here are a few simple money management tips that you can follow to manage your finances independently.
Additional Reading: 8 Financial Mantras Of Successful Women
Plan Your Expenses
It is good to splurge money on experiences like going out for a fancy dinner, but impulse spending can put a huge dent on your finances. A monthly budget can help you keep a check on such impulse expenses. Start by listing the various sources of income like your net monthly salary, rental income, EMIs etc. Also, include any entertainment spends like movies and dining.
When calculating your monthly expenditure, you can use the 50:30:20 budgeting rule that says 50% of your take-home salary should be used for fixed expenses like groceries, fuel etc., 30% should be assigned to flexible spends, and the rest 20% should be put into savings. Depending on your current financial situation you can make adjustments to the rule accordingly.
Grow Your Money
Saving money every month is only half the job done. It’s important to let your money grow by investing in the right financial products.
Depending on your short and long-term goals, you can invest in a lot of investment instruments including Mutual Funds, Fixed Deposits, Recurring Deposits etc. While it’s good to put your money in relatively safe instruments like FD, don’t forget to take advantage of market-linked products like Mutual Funds that can get you high returns in the long run.
Additional Reading: 5 Ways That Can Help Women Create Wealth
Have Dependents? Get Adequate Life Insurance
Today, women are financially independent and contribute equally to the family’s expenses. Therefore, a good Term Insurance is a must if your family depends on your income. This will make sure that your family is financially protected if something were to happen to you in the future.
The amount of cover that you require will depend on a lot of factors like your income, loan repayments, monthly expenses etc. Going by the rule of thumb, one should have a life cover of at least 10-15 times of their annual income.
Additional Reading: 8 Simple Ways For Women To Ensure A Worry-free Retirement
Take Professional Help
Don’t hang back from getting expert advice when it comes to your finances. A good financial adviser can help you draft a financial plan based on your income, expenses, goals etc. and guide you to choose the right products that can help you achieve your goals faster.