Financial Planning Tips for Women
July 29, 2020
Today, women are exploring various investment options to secure their loved ones financially. Read further to know financial planning tips that every woman should implement in their life.
The inclusion of women in financial matters was less important in earlier days. Over the years, the thought process has changed as women in India are becoming financially independent with their aspiring and unconventional career choices. Today, men and women have equal status – both economically and socially. While more and more women are driving financial decisions at home, there are still some who depend on their fathers/husbands when it comes to money matters, investment and planning. It's time for women to take charge of the finances, whether you're single, married, divorced or widowed.
Why do women need to do financial planning?
- One of the main reasons for financial planning is that women tend to have fewer earnings than men, which could reduce your savings for later years of your life.
- In India, the life expectancy of a woman is long which could result in insufficient funds for retirement.
- Due to lack of financial savviness, women are less aware of the financial products.
Now that you know how crucial it is for women to start managing finances, here are some financial planning tips:
- Set financial goals: One cannot initiate the planning process, if you don’t get started with financial goal management. Whether you aim for short-term or long-term goals, you will not be able to figure out how much you need to save or invest without setting a financial goal. You also need to pay off your debts to build a good corpus for you and your loved ones.
- Start investing: It is good to put idle savings to use, especially investments. In today's scenario, where everything is becoming expensive, accumulating wealth through investments is necessary. You need to invest in Mutual Funds or Stocks, where you get to garner returns at an attractive interest rate.
Manage your debt: You may have to take a loan to achieve your milestones. Make sure you manage your credit well, as excess debt can lead to financial disasters. It is necessary to pay off your debt, if you have surplus cash.
Life Insurance: Securing your loved ones' lives is the most basic and vital part of financial planning. Life Insurance provides financial security to your kids and dependent family members in case of your absence. You never know what's in store for you; thus, insurance is as important to women, as it is for men.
Tax saving: Managing tax every year is definitely difficult, yet you must understand how much tax you can save in a year. If you're a working woman, you should know that salaried individuals like you are eligible for tax deductions up to Rs 1.5 lakh in a financial year under Section 80C of the Income Tax Act. To save tax, you can open a National Pension System (NPS), Public Provident Fund (PPF) or invest in Equity-Linked Savings Scheme (ELSS).
Emergency fund: Financial planning involves setting up an emergency corpus to manage unexpected expenses for emergencies. It is advisable that you set aside a part of your income, so that you do not have to deal with any financial stress.
Women should actively participate in financial planning, whether they are the sole breadwinner or living with a spouse. You should start taking the above steps, so that you can live without any financial stress.
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