Millennial women are empowered and manage to contribute towards society by large. The quest to thrive between work life and household responsibilities has undermined the significance of money management by women, which is inherently transferred to the male members of the family.
Keeping in view with the long-term objective of money management and also addressing the short-term requirement, the following pointers elaborates simple approach to manage money better.
Monthly Budgeting
Budgeting is a basic step to financial planning, allowing to determine the availability of money in realistic terms and also to segregate between income and expenditure. It helps to scrutinise the spending habits, which lead to proper prioritising of one’s needs. It also enables women to allocate funds for emergency in separate accounts without having to compromise on monthly income.
Powerful Small Savings
Each festival and occasion like birthdays and anniversary will get you some gifts, in cash as well. The same usually gets splurged along with the routine spends. Accumulating these small savings and routing them to investments can yield a compounded benefit over a longer term. For example, Rs2,000 saved each month can yield Rs10 lakh in 15 years. Now that is good money!
Goal-Based Investments
After completing budget allocation, young women should prioritise on building an emergency corpus in liquid funds, housing at least six-month’s expenditure. Only then should one consider about setting different goals like buying a house, marriage, and most importantly, retirement. For instance, about 51 per cent of working women worry about not having enough money for their retirement period, while about 60 per cent worry about not having enough to meet their medical expenses. Therefore it is imperative to set relevant goals and utilise money efficiently. With time being on your side, one should park money in equity mutual funds to create long-term wealth.
Remain Invested
The process to achieve goal lies in the consistency of investment, which needs a disciplined approach. As majority of life goals are long-term in nature, Systematic Investment Plans come in handy and offer inflation beating returns especially through equity plans. Further, starting early requires less corpus and helps to capitalise on compounding wonders.
Buy Term Policy And Health Insurance
There is a need to plan for the unexpected to let the dependent members live comfortably, for which taking adequate life cover is a necessity. Further, the rise in different health related disease also makes it imperative to take health insurance plan to support against any medical emergency. The health insurance plan also protects against sudden surge in medical bills without having to burn a hole in the pocket and also provide the advantage of saving tax under section 80D.
Involve And Evolve
It is important to understand and participate in the family’s financial decision making. Doing so will empower you with all the required information and knowledge to shoulder the responsibility of managing the family’s accumulated wealth.
Evaluate Strategy On Periodic Basis
After setting the goals, proper strategy also becomes vital. The process of reassessing the strategy improves the overall performance of investment, helping to attain goals faster. It also helps to reshuffle and balance asset allocation in portfolio on the basis of suitability which lowers risk of losing value. It is also prudent to take help of a financial expert to create investment plans for specific goals.
With women continuing to outclass and socially contributing in nation building, money management is no exception to master if provided with the proper platform.
The author is the VP - Digital Marketing and Brand Strategy at 5nance.com