Are you a working woman struggling with money management? Well, if you find it challenging to save money and build wealth, we bring to you some simple financial planning tips in today’s post. These tips are simple to incorporate irrespective of your earnings and will help you to make better financial choices in the future as well. So, without much further ado, let us look at easy to follow financial planning tips for women below
1. Determine your financial goals
You need to take in order to strengthen your financial stability. You need to sit down and determine what your short-term and long-term financial objectives are. The goals might be to save enough money to finance upcoming events in your life later. Some examples of financial goals could be your children’s higher education, marriage, buying a dream home or planning for your eventual retirement.
Once you prioritize your financial goals, finding viable avenues to control expenditure and invest savings to generate more money becomes easier. It also inculcates a sense of financial discipline in you when managing your money matters.
2. Re-assess your monthly budget
Re-examine your current monthly budget. Take a good look at the money you allocate for various household expenses. These costs generally relate to groceries, conveyance, toiletries, your children’s school fees, apartment rent and vehicle expenses. Find ways to minimize the expenses which are variable in nature by opting for substitute. For example, buy affordable hair and skincare products. The extra money you save can be kept aside for emergency expenses.
3. Invest in financial assets
With the extra money you save over the months, put them in a lucrative investment scheme. You can opt for financial assets that will generate value with time, mutual funds, real estate, SIPs, insurance and others. Consult skilled and experienced financial advisors to help you.
4. Do not forget life and medical insurance
Irrespective of whether your employer provides medical coverage, you should consider buying a health and life insurance policy. Taking this step will help you to incur medical and hospice expenses which most people associate with old age. If you eventually suffer from critical illness in your advancing years, the policy will cover the costs of your treatment. This reduces the financial burden on your immediate family members.
However, at the time of acquiring the insurance policy, it is prudent for you to first thoroughly read the offer document. You need to clearly understand its terms, conditions, monthly premium amount, risk factors, tenure and eligibility. Then, you can decide whether it is worth investing in the policy or not.
5. Tax planning
Like all employees, you cannot avoid paying taxes on your salary income. Your employer is under an obligation to deduct the necessary amount payable via TDS before handing over the money. However, there are legal tax saving investment schemes you can consider to reduce your overall tax burden. In the process, you will be earning an after-tax income to live a comfortable lifestyle post your retirement. The popular tax savings investment plans for women in India are:
- Public provident funds,
- National savings schemes,
- Equity linked savings schemes,
- National saving certificates,
- Home loan,
- Sukanya Samridhi Yojna, and
- 5-year tax savings fixed deposits.
Investing in any one or all of the above investments schemes allows you to maximize your after-tax income.
Financial planning for working women is simple if you keep in mind the tips listed above. Keep at least 10 percent of your earnings aside for a rainy day. Try to limit the use of your credit card especially if you love shopping. Use cash or your digital wallets instead as this will stop you from over-spending. If you are used to spa and salon treatments that are expensive, try out home remedies that are equally effective in giving you good skin and hair. In this way, you can stay out of debt and gradually build wealth with time. So, all the best!