Financial independence, freedom, and wellness are often used interchangeably but are quite different.
The term “financial wellness” refers to a person’s overall financial well-being and the absence of financial stress. It is often the result of careful financial planning. Financial independence refers to having enough income to pay your living expenses for the rest of your life without being employed or dependent on others.
Financial wellness is the focal point of this article. Let us see how women can take care of their financial wellness.
Create a Spending Plan
A realistic spending plan can be more beneficial than making a budget. Examine your expenses, income, and savings to build a spending plan. If you cannot figure out your expenses, use a budgeting app or write them down. Start saving for the future. Start with a percentage that is comfortable for you.
Build an emergency fund
Savings help to build a safety net. You should save at least three months of expenses for emergencies.
Separate savings accounts and liquid funds are good for emergencies. One-third of emergency expenses should be saved, and the rest in a liquid fund.
Set up an automatic transfer from your salary account to a separate savings account or a Systematic Investment Plan in a liquid fund to start building your emergency fund.
Educate Yourself
There are free personal finance programmes for self-paced learning. They can help you understand money, manage better, develop credit, save more money, and pay off debt.
Take advantage of your employer’s financial wellness programmes. Aditya Birla Sun Life Mutual Fund offers a website to educate investors about investments, mutual funds, and personal finance.
Allocate Money for Different Goals
Money helps us achieve life goals like buying a dream car, educating children well, and saving for retirement. Every goal demands a different approach since time horizon and risk vary. So, invest wisely. Invest in short-term debt and liquid funds if you need money within a few months. Equity mutual funds can be an excellent long-term investment for retirement.
Loans and Debt
While avoiding loans for emergencies is recommended, they can be helpful if your emergency fund is insufficient. Before choosing a loan, examine your finances. Personal or business loans should always have modest interest rates. Watch your income bracket’s market interest rates. Getting a lower bank interest rate is a top financial health tip. Be cautious about random advertisements of cheap loans, do your research before choosing the one.
Retirement Planning
The best financial recommendation is to start thinking about retirement early. Establish a retirement fund and contribute regularly. You should increase your contribution to the retirement kitty as your income grows. Securing financial security is especially important for women as women live longer.
Conclusion
Women should take care of their financial well-being. You can attain financial stability by educating yourself about finance, being proactive with your money, and constructing a financial safety net.
Disclaimer
- “This is an Investor Awareness Initiative of Aditya Birla Sunlife Mutual Fund”
- “For Her- is an Issue Exclusive Initiative to Educate Women”.
“Mutual funds are subject to market risks. Read all scheme-related documents carefully.”