Building wealth is no easy task, especially for women who multitask. Here are 5 reliable ways to ensure that your money is on the right path.
Today’s woman not only excels at work but also provides the best for her family. With this change, gender roles have been redefined. The husband is no longer the only one with all the cash and the wife is not someone who is going to babysit all day. In fact, there’s nothing that a woman can’t do financially.
She can open a Fixed Deposit in her child’s name, get a Home Loan at lower rates, inherit property from her parents even though she might be married, become a co-applicant for a Car Loan, set her husband as nominee for Mutual Funds, and much more.
Naturally, these have led to changes in economic and personal relationships within the family, society and the workplace. Many Indian men are actually struggling to adapt to the new realities that call for substantial attitudinal changes.
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This has led to many women taking care of their own finances. Don’t believe us? Then, consider this survey.
In the report titled “Success Strategies of Women Entrepreneurs” by the Confederation of Indian Industry (CII) and Indian Women Network, it was found that more than 56% of the women entrepreneurs surveyed are sole decision makers of their finances. Only 38% take decisions along with their spouse, father or significant other.
If you aren’t one of them and not particularly well versed in the field of finance, take heart that finance is not rocket science. Even you can build wealth. Just follow these steps and you can ensure that your wealth grows just the way you want it to.
- Read Up
A shift of mind-set is the first step towards being financially wise. Develop a self-belief that you can handle your financial sphere as you have done with other areas of life.
Small changes in your life can lead to big results. Start by learning to read a bank statement, read personal financial columns in newspapers, or enrol in financial workshops. Getting the help of a financial planner is also a good idea.
Ensure that you spend 30 minutes every day reading up on personal finance. This will help you make the right financial decisions.
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- Track Your Spending
You need to do this on an everyday basis. Take up an excel sheet, an app or a piece of paper – anything that works for you. The more you understand your spending patterns, the better you will be at cutting down on those superfluous expenses.
While spending to satisfy a sudden “inner urge” is normal, making such spends regularly can be disastrous. Don’t spend:
- to de-stress
- just because an irresistible offer is available
- without analysing your needs
- to avoid peer pressure
- without researching all avenues of sales. This goes for financial products too.
For example, a Personal Loan with zero processing fees might be available on BankBazaar while your lender might charge as much as 0.5% of the loan amount.
Additional Reading: Personal Loan Offers With Zero Processing Fee
- Invest Spare Cash
You don’t need thousands of rupees to start investing. You need only as much as Rs. 100 to open a Fixed Deposit at your bank or start a SIP in Mutual Funds on BankBazaar. So, don’t waste that spare change on baked goodies or granola bars. Even Rs. 100 every month can help you get great returns in the long run. Here’s an example that will help you understand.
Suppose you invest Rs. 1,000 in a Mutual Fund SIP for 5 years. You decide to increase the SIP amount by 10% every year. That will amount to just about Rs. 100. How much difference will this make?
Assuming a return of 16%, your Mutual Fund investments will grow to Rs. 1,07,798 when you put in that little additional amount every month. Without that, your Mutual Fund investments will grow to Rs. 92, 249 – a difference of Rs. 15,549. So, put that spare change to good use.
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- Pay Yourself
While it’s important to take care of your loved ones, it’s equally important to pay attention to your needs. Make it a priority to save for your old age or post-retirement life. Keep the retirement funds separate from that of your spouse. Be prompt and systematic in allocating funds towards these savings. It’s best to automate it. Never use these savings for other areas of your life such as children’s education and marriage.
And it is best to start early when it comes to saving for retirement. Why? Suppose you start saving Rs. 5,000 every month when you are 20 and stop saving when you are 35, you will have Rs. 3.6 crores by the time you turn 60. What if you start saving double that amount but only when you are 30 and invest till you turn 60 years? Then, you will have only Rs.2.28 crores. So, it is best to save for your retirement as soon as you can.
Additional Reading: 5 Ways To Make The Most Of Your Retirement Corpus
- Stay Informed
Ignorance may be bliss for some. However, it can be quite dangerous when it comes to your finances. It’s crucial to know what’s happening with your finances. Whether it’s your husband, parent, sibling, or a trusted advisor taking care of your finances, you need to know what’s going on. Get involved in making financial decisions.
If you are married, get to know about assets that you own separately as well as those you own along with your partner. Details of loans and the list of investments in your or your partner’s name are other crucial facts you need to remain informed about. Get to know about the insurance policies that are in the names of your spouse or other family members.
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Keep yourself updated about the returns, risks or other details involved. Review the performance of the investments along with your partner on a regular basis. This will help you weed out the under performers and choose investments that will give better returns.
Investing is easy as long as you know where to put your money. Yet to start investing? Plenty of Mutual Funds and Fixed Deposits are available right here!