Personal Finances
According to the Women & Power survey conducted in 2022 by LXME, it has been revealed that only 9% of women in India have personal finances to invest independently through self-learning. 55% of women are either not investing or are unaware of investments. A shocking disclosure was that 33% of women do not invest.
On the other hand, in 2020-2021, there was a hockey stick spike in the number of people opening Demat accounts. This shows that more and more people are beginning to participate in the stock market. But somehow, women are being left behind in the field of finance. Financial independence is when an individual household has accumulated financial resources. It covers living expenses without having active employment or work to earn money in order to maintain its current lifestyle.
Some of the major reasons behind non-participation in investing are nothing but mental blocks
- India is a patriarchal nation. It has been ingrained in the minds of people that personal finances are to be managed by men only.
- Investments are a rich-people thing.
- The market is nothing but a gamble. They are going to lose money.
- Unawareness about investments.
- Unwillingness to learn.
- They feel they do not have enough money to invest.
Here are 7 effective ways to manage your finances
1. Start saving:
Once you start earning, start saving at least 20% of your income. Women are known to be better savers. Yet, the personal finances survey has shown different results. 78% of the women spend less than 20% of their income.
The study shows even worse results where 56% save less than 10% of their income while 14% do not save anything. Do the bare minimum for yourself, and start saving 20% of your income every month.
2. Start investing
Once you have started saving. The next best thing you can do is to start investing. You might be fearful at first, thinking you know nothing about it. Start by investing in mutual funds. Select the top mutual fund that has been doing well consistently. There is a fund manager who will make your money work in the smartest way possible.
The next excuse that women often have is that they do not have enough money. But you can start your monthly Systematic investment plan with as low as 100 rupees. So, no excuses anymore. A mutual fund can give you almost double the return you get on traditional investments like fixed deposits. Apart from mutual funds, you should invest in gold and silver.
3. Emergency Fund
Whether you are a single lady or a married woman, set aside some amount every month to build an emergency fund. In the face of unforeseen scenarios, you would have something to fall back on.
4. Control Desires
Control your desires and do not spend all your income on material things like clothes, branded bags, or expensive salon sessions.
5. Budgeting
Budget your income and expenses. Keep track of your cashflows.
6. Financial Education
Put in some time for learning about finances. You can do so daily or weekly at your convenience. Watch YouTube videos, listen to finance podcasts, and read books to enrich yourself in this area.
7. Retirement Plan
Nothing is guaranteed in this world. Be your own best friend. Start for your retirement early on. Invest smartly to build a retirement cushion for your future.
Conclusion
They ask other women about their financial planning journeys. Start small but start with a SIP (systematic investment plan), financial independence is an essential life skill every woman should be well equipped with in order to be truly independent.