With women’s empowerment rising in magnitude, here’s how financially independent women everywhere can throw down the proverbial gauntlet and take control of their money. Happy Women’s Day!
Many women tend to stay away from money management because they find it complex to understand or because they have someone else doing it for them. Things are definitely changing as more and more women are earning independently from an early age and making smart investment choices.
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If you are an independent woman looking to break the mould and take financial matters into your own hands, here are a few simple ways to get started through the healthy habit of investing:
- Save first, spend later
This is one of the cornerstones of financial advice when it comes to building wealth. Start by making a monthly budget and ensuring you stick to it. List the various sources of income like your net monthly salary, rental income etc. When calculating your monthly expenditure, first keep money aside for saving, and then keep money aside for expenses like fuel, groceries, supermarket spends etc.
You can use the 50:30:20 budgeting rule that states that 50% of your take-home salary should be used for important expenses like food etc., 30% should be allocated towards flexible spends, while the remaining 20% should be put into savings. Feel free to make adjustments to the rule depending on your current financial situation.
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- Don’t let your money sit idle
While keeping money aside for saving is a good start, it’s equally important to make your wealth grow. Before making investment choices, make a list of all your small and long-term financial goals and then place your money in investment avenues that match these goals.
Depending on your financial goals and risk-taking ability, you can invest in a host of investment options including Fixed Deposits, Mutual Funds, Recurring Deposits etc. While it’s always prudent to put your money in safe investment instruments like FDs, taking advantage of money-market instruments like equities can reap high returns in the long run.
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- Take adequate insurance
If your family depends on your income, don’t forget to invest in a good Life Insurance plan. Emergencies can come unannounced and can threaten the financial well-being of your loved ones if you aren’t prepared.
A sound Life Insurance plan will provide a financial cushion for your family if something were to happen to you in the future. Ideally, you should acquire a life cover that is at least 10 times your annual income. The amount will also depend on other factors like your income, liabilities etc.
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- Take Expert Advice
Do not hesitate to seek professional help. An expert investment advisor will help you draw up a financial plan based on your income, expenses, goals etc. This will give you a clear understanding of your financial status and will help you choose the right products to achieve your goals faster.
Additional Reading: Why Working Women Need A Financial Advisor
- Build An Emergency Fund
Maintain an emergency fund at all times that is sufficient enough to take care of at least six months of expenses. This will prepare you for any unforeseen situations like a medical emergency or a sudden loss of income.
Additional Reading: Why Should Women Have An Emergency Fund
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