Personal Finance

7 Steps For Working Women To Manage Their Finances

The aspirations and goals of working women are no different from those of their male counterparts.

Modern working women claim and deserve gender equality. Working women do not appreciate the differential treatment given to them when it comes to making financial or other decisions. The aspirations and goals of working women are no different from those of their male counterparts. Therefore, the fundamental principles of financial planning do not differentiate between men and women.

Future financial goals: financing higher education and child marriage, buying a home and car, going on vacation abroad, and planning for retirement are common to both sexes. Maintaining a certain standard of living becomes important. Let us now examine some of the key decisions that all working women must make to ensure that they enjoy financial well-being.

Steps for working women to manage their finances

Gold

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Women have a special taste for gold. The general rule of thumb to invest in gold is that you must represent more than 10 percent of your total financial portfolio, either in the form of physical gold (ornaments, etc.) or paper gold (gold mutual funds or gold ETFs and bonds of sovereign gold)., etc.)



Protection cover

First of all, if there are family members who depend on them, they should make sure they have adequate coverage in terms of disability and life insurance. It is essential to protect family members in case the winning member becomes incapacitated or disabled due to illness or accident, etc. The general rule here is that you must have a life insurance plan and total disability plan coverage equal to ten times your annual income.

For example: if a woman earns Rs 10 lakh per year, then she should have life and disability insurance coverage of Rs 1 crore to ensure that family members feel financially protected in the event of an unfortunate eventuality.

Retirement planning

In addition to providing protection to family members, working women have to plan their retirement needs well in advance. Remember that it is not common for all working women to retire at the age of 60. Retirement will depend on your profession. Sportswomen, hostesses and celebrities do not have a very long work period. Therefore, they must do special planning for early retirement and make sure that they can live comfortably for the rest of their lives by accumulating a corpus and investing in different classes of assets: stocks, debt and real estate, etc.

Limit expenses

Working women must ensure that they learn to limit their spending within their income levels and not resort to debt, loans, or overspending with credit cards at any time. Stretching your expenses beyond your limit can create financial stress and compromise your future comforts.

Document the financial plan

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It is also important to mention here that all working women must obtain a financial plan as a document and must implement it and continue to rebalance their portfolio by reviewing it at half-year intervals.

Asset allocation

All working women must be exposed to mutual capital funds through Systematic Investment Plans (SIP) to create wealth in the long term. This is also necessary to achieve financial goals such as your children’s education / marriage or retirement, etc. The basic rule of asset allocation is that 100 minus age should be the percentage allocation to mutual capital funds; 10 percent should be in Gold and the balance should be in debt instruments such as PPF, EPF, Bank FD and Bonds.

In summary, all financial portfolios of working women must include 3-4 mutual fund SIPs equal to 20 percent of their monthly income, regular contributions to the Public Provident Fund and NPS account to ensure retirement planning. Regular lifetime pension, in addition to having adequate health insurance and life / disability insurance is also important.

Doing the will

They must ensure that they do an adequate “Will” and that their total investments are distributed in the proportion desired by them. It should be done much earlier in your life and should be shared with close family members to easily claim investments in the event of a sad disappearance.

Therefore, it becomes imperative that working women are in control of their finances, are fiscally disciplined, and remain well planned.



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