In today’s world women are equally contributing to the economy, when it comes to financial planning. Those days are bygone when we think finances was a men’s job. Today we think women should understand the importance of financial planning & not depend on others to plan their investment.
With the rising trend for taking up jobs these days for women it is very necessary for them to manage their finances. Once they start making a rational decision, they may be more successful than men because historically, women are considered as more disciplined, patient & rational investors.
So, these are the 5 tips to start their investment journey.
- Save 20% first, and spend later.
The thumb rule of basic investing says one has to save at least 20% of their income each month to be in a better financial position.
- Less debt creates more wealth.
The second tip from my side is to stay away from excessive debt. Manage your credit cards wisely and pay as little EMI as possible. My rule is to take only up to 25% of your monthly income as EMI.
- Reward yourself from Shopping
As a trend, women’s love to shop more frequently and sometimes overspend, which disbalances their financial management. So, as a wealth manager, I always give the tip to reward yourself, but how?
Everytime when one shops, of that total amount reward yourself 5%, 10% of that amount & invest the same in your MF’s or Index. It will help to increase the process of compounding in your portfolio.
- Start investing in Equities
Women are generally afraid of investing, but it’s very necessary to allocate upto 40% of income in mixed equities is the only asset which provides inflation beating return. At this time when inflation is rising globally. It is very important to allocate 10-20% income to equities.
- Prepare an Emergency fund
As a wealth manager, I always advised investors to set aside an emergency fund that could cover all of their expenses for at least 12 months. The first thing we learned during Pandemic 2020 was to be prepared.
So, these are the wonderful 5 Tips for women to become financial planning independent and it will help them with their financial planning. Thus, by doing & following these tips, women can avoid some hazards in life & maintain a towering standard of living.
Views expressed above are the author’s own.
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