Women today are breaking the stereotypes everywhere – right from managing households to running successful business, women have efficaciously changed the perception held against them of being the ‘weaker’ sex. Which is why the concept of financial planning is no longer considered a taboo among women. In this article, we will share some financial planning tips that can be adopted all women. But before, we get to that let’s quickly understand the importance of creating a financial plan.
Importance of financial planning among women
Here are a few reasons why all women, irrespective of their financial condition or age must consider creating a concrete financial plan for their wellbeing:
- It helps to give a sense of financial freedom and helps women to feel more financially independent.
- A good financial plan can help women to take career breaks when needed.
- A sound financial plan will ensure that emergencies that might arise in the future are taken care of.
- Financial planning can help women to generate a substantial corpus for their higher education or other expenses such as marriage, buying a house, etc.
How to create a financial plan?
If you are interested to create a financial plan, here are a few steps that can help you with the same:
- List your financial goals
You must begin by clearly defining your financial objectives. Your financial goals must be SMART – Specific, Measurable, Achievable, Realistic, and Time-bound. Basis your investment horizon, your financial objectives can be short-term, mid-term, or long-term in nature.
- Create a financial budget
To create a decent corpus to achieve your financial objectives, you might consider allocating your funds for following uses:
- Healthcare expenses such as supplies, dental, medication, vision, etc.
- Food such as dining out and groceries
- Housing expenses such as repairs, phone, mortgage, utility, rent, maintenance, etc.
- Personal expenses such as personal care, gadgets, gifts, clothing, etc.
- Transportation expenses such as maintenance, vehicular expenses, petrol/diesel, repairs, etc.
- Savings towards achieving your financial objectives and insurance
- Prepare an emergency fund
Next important thing is to prepare for your emergency corpus. You must be well-prepared for any contingency that comes your way. This will ensure that you do not dig into your savings or investments in times of desperation.
- Plan for your retirement
One may assume that they can put off retirement for time being, as it is a far-fetched financial goal. However, this is where investors go wrong. One must prepare for their retirement as early as possible so that they do not stress themselves out in the later stages of life when they have more responsibilities and duties to fulfil.
Financial planning tips for women
Here are a few financial planning tips for women that can aid to kickstart their financial journey with a bang:
- Be updated about the latest technology
Today, there is an app for everything – right from tracking expenses to saving and budgeting to investing. It would be a good idea to use these apps to help you with your financial planning journey.
- Try to reduce mindless spending
A good rule to budgeting and investing is to always prioritise your savings and investments over mindless spending. Make sure you do not over-exceed your expenses at the expense of your investments.
- Health insurance and life insurance policies
It is always a good idea to invest in a good health and life insurance policies to ensure that your loved one’s financial health is always taken care of, even when you are not around. So always do your research in selecting the best health insurance policies for you.