Homemakers don’t have it easy. If you happen to be one, you have the added responsibility of planning your finances as well. Here are some tips that can help you plan your finances better.
In recent times the word “homemaker” is used in reference to both men and women who run a home. These days there are ample number of families where the husband steps up and takes on the responsibility of being a primary caregiver to the child (or children) and running a household. That said, women are still, by and large, considered to be the more ideal candidate to take on the role of a homemaker.
Irrespective of who runs your house, if you are a homemaker, you know by now that your family depends on you for everything. You are an integral part of the structure upon which your family’s foundation is laid. Without you, it may seem impossible for the system to run without any glitches.
Although your partner may be the bread-winner, you have the responsibility of ensuring that everything runs smoothly within your home. Apart from doing the daily chores, taking care of your children, and running errands, you may have seen that you also do one more important thing for your family – take care of finances!
Yes! You might already be doing that without really realising it. And because you have way too many things on your plate, sometimes it’s hard to keep track of where you’re spending and whether you have spent money wisely or not. That’s why it is important for homemakers to plan well.
Health emergencies, big expenses or a job loss may occur anytime. And this could wreck your budget and your systematic flow of events. Moreover, if you don’t have enough savings or a great Health Insurance plan, this unexpected emergency could make your entire household go topsy-turvy.
Hence, financial planning is crucial. While it comes naturally to some people, it may not be the case for everyone. If you are a homemaker who is struggling with planning your finances, then worry not. We have some great tips just for you.
Additional Reading: Homemaker, know your worth!
- Make A Budget: Most homemakers are master-planners, especially when it comes to a household budget. But, it’s also easy to get carried away in the absence of one. Your budgeting knowledge shouldn’t just be restricted to grocery shopping.
Considering that you’d have a bunch of other bills and EMIs to consider (a Home Loan or a Car Loan), you can broaden your budgeting by including these expenses too. This means you have to calculate your total monthly income and deduct these expenses to arrive at a budget.
This calculation will also help you estimate how much you can save. This is crucial when you have to make bigger financial decisions like buying something expensive, or planning a vacation, or even planning a child.
And this simple planning doesn’t require that you have Einstein by your side. It’s basic calculations – your total income minus your total expenditure. The remainder should either be saved or invested wisely.
Psst… Looking for smart investment options? Be sure to check out our Mutual Funds.
Additional Reading: How Budgeting Can Transform Your Financial Life
2. Stick To The Budget: Yes, we agree that this is the hard part. But one way to stick to a budget is by setting aside the money you have decided to save and putting it into a Fixed Deposit and then making use of whatever is left.
A great way to do this is by setting up an auto-debit on your account. This way you are left with only what you need for your day-to-day expenses and you cannot go overboard.
Additional Reading: Get Smart With Household Budget
3. Identify The Big Expenses: If you’ve been running a house for even as little time as a few months, you’d know exactly where and how much is being spent regularly. The usual expenses like groceries, utility bills, rent, or other EMIs will remain constant.
But, in the due course of time, you may have some slightly bigger expenses to deal with, say, for instance, buying a washing machine, renovating your house, or even something more ad hoc like a medical emergency. A Personal Loan may help you during a financial crunch.
However, staying on top of your game by identifying your big-pocket purchases in advance will help you not overspend and wreck your regular flow of income vs. expenses. You can either save up for it, or simply cut down on your other costs to accommodate this purchase.
Additional Reading: How To Manage Big Future Expenses Successfully
4. Divide Expenses: After identifying the big-pocket burners, the next thing to do would be to split them across the months/years so that you don’t feel the pinch all at once. And we’re talking about having a financial crisis after these unaccounted expenses.
Having to pay for something that you haven’t budgeted for can be heavy on the pocket and will disrupt the whole quotient of your budgeting. In the long run, dividing your expenses will prove to be an effective way to manage expenses.
Still confused about how to do it? Here’s an example: You want to go on a vacation to Europe. A vacation like that definitely needs months of planning. So, start early.
If your target is to do it after six months, then do one task/payment pertaining to that vacation every month. In the first month you can book your tickets, then wait until the next month to apply for your visa and pay the visa fees. The month after that you can book hotels online and so on. Did you know a Credit Card can help save you money? Here are some Credit Cards you can check out.
This way you wouldn’t feel the crunch as much, and it won’t affect your overall household budget.
Additional Reading: 6 Ways To Nail Those Air Ticket Bookings
5. Save Smartly, But First Save: In short, saving means to cut down costs. So, it wouldn’t hurt to review your day to day expenses and make small changes to your lifestyle. Cutting back all of a sudden may not be feasible and this method won’t be sustainable in the long run. Therefore, what would work best for you is to make small changes in the way you spend.
But making these changes alone isn’t enough. The money that you save needs to be invested. Let’s face it – money doesn’t multiply on its own and unless you make your money work for you, it’s only going to lie there like a piece of furniture.
You can start by opening a Savings Bank Account, or, better yet, put your money in a Fixed Deposit Account. Not only will you earn interest on it, your money will also be safe. You can also consider investing in Mutual Funds. You can also start saving in smaller savings schemes like the Postal Savings.
Additional Reading: Benefits Of Investing In A Savings Scheme
6. Create An Emergency Fund: An emergency fund should be everyone’s top priority, irrespective of who you are and what you do. Creating an emergency fund will help you prepare financially to face any random unavoidable emergency. This fund can be used during a cash crunch or for a medical emergency too. That being said, we recommend getting yourself a Health Insurance policy to take care of your medical expenses.
One thing to keep in mind is that this fund should be used only during an absolute emergency. Sometimes you may be tempted to use this money to pay for things you want rather than need.
It’s easy to get carried away, and especially if this money isn’t put away, you might just end up using it. Hence, it makes sense to save your emergency fund in a separate bank account or in investments like which can be easily liquidated.
Additional Reading: Tips To Handle An Emergency That Costs More Than Your Emergency Fund
7. Create Long-Term Financial Plans: Being totally dependent on your partner’s income is risky. Say your partner loses his/her job, or falls sick, or worse passes away and then you’d find yourself in a very precarious situation. One way to avoid this is by securing your future.
You can start by getting a Term Life Insurance plan and get Health Insurance for your family. If you have a child you can start investing in Mutual Funds to save for your child’s education. As a homemaker you can start investing in Mutual Funds with a Systematic Investment Plan (SIP), you can choose an amount as small as Rs. 500 to begin with. Likewise, if you wish to save for your daughter’s marriage you can open a Sukanya Samriddhi Yojana Account.
Additional Reading: The Beginner’s Guide to Creating an Investment Portfolio
8. Keep Yourself Updated: Being a homemaker is a huge responsibility, because you’re always multi-tasking and juggling things to get everything in order. And sometimes amidst all the chaos you may not have enough time to dig deeper into your family’s financial matters.
But, you can take matters in your own hands even in this area. In today’s world where we have access to free-flowing information it isn’t hard to subscribe to financial blogs to get your daily scoop on what’s new, tips on Personal Finance, and to browse for financial products.[If you have a smartphone, you can download our App and enjoy our regular updates on Personal Finance and also read our blog on the same]
9. Work From Home: Financial independence is the most important thing in life, next to breathing! And sometimes, it’s equally important to have some money that you can call your ‘own’.
These days, the options are unlimited and you can simply connect to the world while sitting at home. There are multiple options to work from home and you can make some money in your spare time.
Additional Reading: 7 Fancy Ways To Make Money Online
Being a homemaker means that you’re working round the clock to keep things moving for you and your family. An effective financial planning strategy will only enable you to function better amongst all your daily chaos. We have numerous options to help you make the most of your finances. Just click on the button below.