To all the millennial working women on the road to self-discovery, you don’t have to choose between the occasional shopping spree or enjoying with friends while saving for retirement. With careful financial planning, you can plan for the future while enjoying your present.
These 5 go-to financial tips can help you to manage your money matters better:
Set Your Financial Goals
Setting financial goals is crucial to have a stable & healthy family life. Start with your short-term goals like planning finances for a vacation with family, higher education, wedding or planning for life after retirement.
Re-allocate your Monthly Budget
Your budget is your financial to-do list, and your late twenties are a good time to re-think budgetary allocations keeping an apartment, a car or money for a startup in mind. Create an emergency fund for a rainy day – unexpected layoffs, medical treatments of your ageing parents and so on should also be up on your to-do list.
A good mantra to live by is ‘Spend after you Save’ and not the other way around. By doing that you can channelize your money into building a healthy corpus for your retirement.
Have an Insurance
You’ve never liked to be dependent on others for anything in life – why be a dependent on your parents or husband for an insurance policy! One of the biggest mistakes most young Indian women make is ignoring insurance.
Every working women should ensure that they have taken adequate life cover to safeguard their financial dependents against any eventualities of life. Term insurance plan here, fits in providing the best adequate life cover. It acts as an instrument for income replacement. The moment one starts earning and has financial dependents, it is very important to get insured. Women should also consider getting a health insurance plan, as health plays a crucial part in achieving great heights in career and also medical expenses these days can also make a big dent in your pockets.
Create Assets over Time
Once you know how much you can spend, resist dipping into your savings for any short or big expenses. Direct your income towards creating assets for yourself and your family that appreciate in value over time such as a house. Investing in mutual funds through SIPs every month can systematically grow your savings into a sizeable amount over time and help build assets. You can start an SIP from as low as Rs 100 in most mutual fund schemes.
Invest for Retirement
You’re already putting in a lot of efforts in your career right now, don’t let poor retirement savings lead you to rethink ways to keep the money coming when you’re older and need rest. Start saving now for your retirement by investing some part of your income into mutual funds. Given 30% of your income go into taxes, a smart allocation of income towards tax saving ELSS mutual funds will serve the dual purpose of retirement planning and tax savings.