Despite living in an era where gender parity is growing, there still is a need to transform the way women approach financial planning. As much as equality is appreciated, women do lead very different lives than that of men. Circumstances like the wage gap, income discrepancy due to marriage and maternity leave, and other life choices of women must be accounted for when planning finances.
The biggest problem for women while financial planning is that they rarely put themselves first. They fail to look at their finances as being separate entities from that of their families. Adding to this is the fundamental tactic of a man tending to accumulate, and a woman tending to preserve and grow which adds to the lack of substantial financial growth. Women tend to undersell and underestimate both their levels of knowledge and the potential of their investment. They need to be more confident, self-directed and should trust their natural abilities to manage money.
Whether they are single, married, working, not working, freelancing, divorced or widowed, women must take charge of their finances, making sure it grows and serves them as well as their families.
Don’t know where to start?
Let’s begin by working on these short acts that will lead to you to be effective at your financial planning.
Develop The Right Attitude Towards Money
Do not shy away from taking a corrective course. To gain beginner knowledge and build initial confidence, approach a financial planner to seek advice on how to manage your money efficiently. Make sure to consider your aspirations and requisites while you do so. Once you are assured enough, gradually make a shift to handling your assets independently.
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Take Account Of Your Wealth
Assess where you stand in terms of your assets, savings, income, investments, and expenses. Know what you earn and spend, and build from there towards your goals. Review, research, read up on your finances, go through your consolidated report.
Set Short-Term Goals
After setting the long-term goals, list a few short-term goals that are achievable with basic efforts. Be clear that you are not overlooking the little joys of the present.
Make Your Money Work
Apart from a small emergency fund, do not keep idle cash lying in your bank account. Paper doesn’t grow, and inflation ensures it depreciates. Invest smartly. Consider automated investing tools that are tailored to your risk appetite or adopt a structured and affordable investment approach. Let the market grow your money.
Use Google’s free portfolio tracker, Google Finance to keep a check on daily and overall performance.
Diversify Your Investments
Ensure you have both liquid and illiquid assets and investments. This can secure you from volatile economic cycles. There are plenty of options to consider from, like real estate, bullion, equity, mutual funds, insurance, debt, and bonds. Keep your eyes and ears open for opportunities that you may want to tap on.
Know Your Risks
If you’re making a risky investment, be mentally prepared for the consequences. Plan your risk tolerance levels and plan a backup that is equivalent to the risk factor.
Check out this risk profiling tool.
Evaluate Your Worth
Sit back once a year and reflect on what you were worth that year. Consider your worth in the past year and set expectations for the next. To stay focused on what you want to achieve, you need to look back on the experiences and learnings of the past.
A thoughtful approach to control your own hard-earned money is imperative. Being financially independent will empower you to self-sufficiently fulfil your wishes, such as taking a trip with friends, doing a course to enhance your skill-sets, buying things that you desire and much more.