Women are in every field standing equally with men. Name a field and we can find women there. Investing is one such field where women are just venturing into. Let it be working women, entrepreneurs, homemakers or even students for that matter can invest. Here are few tips to all the women out there to make their investing journey easier.
Start with Emergency Fund
Have an emergency fund. It should ideally contain 3-6 months expenses and the last emergency expense. The first goal of financial planning should be to cover yourself in case of emergencies. Each individual should have an emergency fund. Just because your husband or dad has an emergency fund doesn’t mean you shouldn’t have it. Prepare yourself for a contingency. On the day of the crisis, your fund will support your family too.
Have an Insurance
Insurance falls second in the list of financial goals for everyone. It offers assistance in case of emergencies. Have insurance of your own and do not depend on your husband’s or dad’s insurance. Taking life insurance, medical insurance and auto insurance is a must. Remember that your life insurance should be 10 times of your annual income. Your health insurance should be somewhere around Rs 5-25 lakhs. Having sufficient coverage is very important for all insurance policies. Insufficient cover poses a substantial financial threat in times of emergencies.
Budget your Incomes and Expenses
Budgeting your expense and incomes will help you with understanding where are you spending your money at. While having a budget for your house is important, having a budget for yourself is equally important. As a working woman or a homemaker, you should have your own budget. Write down every single expense and try reducing the unnecessary ones every month. As a working woman, you will have your income but as a homemaker or student, you will have to depend on others. In this case, you can try earning through work from home options or internships and save as much as you can. Saving every penny should be your mantra in life. Sacrificing a few things now for a bright future later will be totally worth it.
Have Goals in Life and Convert them into Numbers
Have few goals in life. For all women few common goals will be to go on a vacation with all their girlfriends or buy jewellery. Some might even want to build a house or help their husbands in building one. Some might want to save up for their kid’s education and marriage or just saving up for their retirement. All these are goals. Convert them into numbers in terms of money needed and the time horizon. Segregate them into short, medium and long duration goals.
Work towards the Goals
Start saving up for the goals and invest to achieve the same. Saving money in a jar in the kitchen or at a bank is as good as cooking the food but not serving it in a plate to eat. The hunger won’t satisfy if you keep staring at the cooked food. The money won’t grow on its own if it is left idle. Invest in various financial products available in the market. FD’s, mutual funds, shares, bonds, REITs, gold, forex, commodities, NPS, post office deposits, etc are just a few out of many. Invest in your goals and if you are already investing then step-up your investments by 5-10% every year. This will help you reach your goal faster.
Keep Tab on Loans
Discuss with your husband/father on the loans your family has and try to pay them off early to escape the interest burden. Don’t spend vigorously with credit cards. Spend with the money you have and don’t borrow. Limit the use of credit cards. Use credit cards only for their attractive offers and discounts.
Invest in small amounts
One need not wait to accumulate a lump sum amount to invest. Mutual funds allow one to invest in small amounts through SIP and for the long term. SIP and long-term investing is a deadly combination to build wealth. One can invest with just Rs 500 a month. Students and homemakers will find it easy to invest in small amounts through SIP as there is no or very little income. Know more about mutual funds and investing in them here.
Remember, being independent is the best way of living. Try to share family expenses and loan burdens and create a living for yourself without depending on the others. There is nothing more attractive than a strong independent women.
Happy financial planning!