A woman should work on her own personal finance goals as per her requirements. Read on to know how the tips discussed here can keep a woman financially independent and healthy.
When it comes to multitasking, women tend to have an edge over men. They not only manage challenging tasks at home but also strike a balance between their career and home. Although they juggle between many roles but often remain ignorant about crucial aspects of their personal finance. It is important for a woman to not mix her goal with her spouse’s and instead work towards a synchronised objective, which benefits her and the family too. She should pursue individual goals like buying a car, choice of retirement, travel plan, getting an education, adding new skills, etc. for her own happiness and growth.
Thus to remain financially independent and strong it is important for women to keep their personal finance intact. Here is how you can do it.
Don’t Depend On Your Partner For All The Financial Decisions
Although it is the women who manage the household finances, they often let the man take care of other finances like investments. Both women and men should have financial goals that work in the interests of the entire family. But along with these common financial objectives like child education, Retirement Planning, they should also have individual goals like having a vacation with their gang of friends or investment decisions that can help during emergencies. The needs of men and women vary so a working woman should take a call and not depend on her spouse for spending money, investment as per risk appetite and return expectation. Understand the rules of investment and other financial aspects like applying for a loan to take control of your personal finance.
Maintaining An Emergency Fund For Yourself
Women like men are also financially vulnerable to risks such as job loss, divorce, a sudden death of the spouse etc., so it is important for her to maintain a personal contingency fund to face any kind of financial challenges. Size of contingency fund should be adequate to provide a financial cushion for at least 6 months to 8 month period. Women must consider her regular expenses such as monthly EMIs, home expenses, investments when creating the contingency fund. Such fund should be kept in a liquid investment such as Savings Bank Account, Fixed Deposits, liquid fund etc. to ensure availability of fund when there is a financial emergency.
Stay Financially Updated
Financial literacy is very important for women. It can help them to stay updated with changes happening in the financial world by anticipating the impact on her spending habit and investment. Suppose banks have come up with a new loan product in which they offer lower interest rate for the women customers. If women are financially updated, then they can take advantage of such scheme and save money when paying EMI. Staying financially updated can help women to keep their financial objective realistic and achievable.
Manage Credit Score
Women have diverse spending habits as compared to men. They are prone to spending beyond their credit limit, which can hurt their Credit Score. So it is important that steps are taken to maintain a healthy credit score. It is wise to avoid misuse of the debt instruments and repay any kind of loan on time.
Invest Regularly
There are several investment instruments available in the market and women should select the best suitable one as per her risk appetite and return requirement. It is important for women that they build a balanced portfolio by diversifying investment in various asset classes to achieve various financial objectives. Investment should be done regularly, and it should be reviewed at a regular interval. Women’s retirement requirement may be different from men; therefore, investment should be aligned with the retirement goal and aspects like return, liquidity, and lock in period should be adjusted as the age nears retirement.
Apart from above-mentioned points, women should take care of her tax obligation and make an independent decision when making a tax saving plan.
Women should assess her individual insurance requirement distinct from the spouse and buy a separate insurance as per her own requirement. They should also make a separate estate plan to avoid difference of opinion from the spouse.
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