Essential Financial Planning for Women

Posted on by

How to plan your finances as a women. As a personal finance blogger, this is an important question I am frequently facing from housewives and female friends. Personal financial planning or money management has no limits to anyone. It is open for all including children, college students, teenagers, youth, women and housewives, couples and so on. As a women, do you like to have control over your income and expenses or like to save and invest money and create additional income through side hustles? Then read this article, essential financial planning for women.

What are the essential financial planning for women and how to plan your finance

It is proved, when educated, women are far netter than men to manage their finances! Keeping this truth in mind, I am discussing about 20 magic personal finance and money management ideas for women to become more practical and serious with personal finance, money management and investing. I am sure, it would be best read for all.

1. Educate self about financial planning

Start educating yourself about personal finance and money management. Having decent knowledge on personal financial planning would help to avoid critical money management errors. There are several methods to get enough wisdom on money management. There are lots of resources available on the subject and also can find number of best materials in the net.

2. Set personal finance goals

The best way to plan your finance is through setting financial goals. It can be long, medium and short terms. For example, if you want to buy a house within five years, it is an important mid-term goal. Having a realistic goal would give focus to achieve that goal by leveraging savings and investment habits.

3. Learn about saving

“Spend less than what you earn”. Learning and practicing good money spending habits put the people into the comfort zone. Know the difference between saving and investing. Saving meant to set aside money for immediate requirements. This can be parked in a savings account.

Investing is to leverage maximum profit from the saved money by investing in multiple assets i.e. stocks, that is suitable to the individual as per their goal, risk tolerance and investment duration.

Simple tips to save money daily

  1. Define and follow budget
  2. Prefer purchasing seasoned vegetables and fruits.
  3. Borrow/rent items for short usage
  4. Never purchase anything because you just ‘want’ that
  5. Electronics are best to purchase after few months after its launch.
  6. Seasonal items such as cooler, heater etc. should be purchased well in advance before the season starts
  7. Never purchase anything with borrowed money
  8. Extend few days to buy any costly items. You may sometime change your mind and leave that purchase interest.
  9. Items with resale value are best to buy.
  10. Purchasing anything that you already have, need more attention on the durability.
  11. Branded items are always costly. Customer paying for brand and not for quality. There are even better items available than branded one.

4. Set an emergency fund

Emergency fund meant to deal with unexpected situation such as job loss, hospitalization etc. Creating and having an emergency fund is the important step in personal financial planning. Thus having an emergency fund is necessary.

Advantages of having an emergency fund

  1. You are able to financially back away from the edge of a cliff
  2. Helps you prepare for life’s unpredictability
  3. The emergency fund saves you money
  4. Emergency fund protects your investments from stopping it prematurely
  5. An emergency fund gives you the chance to be involved in other people’s emergencies
  6. Emergency fund also stops you from borrowing high interest loans.
  7. Psychologically, you will feel safe and can lead a peaceful and happy life.

5. Involve to day-to-day money planning

Housewives have right authority to take money management decisions at home. An average person anyway makes between 1 and 6 financial decisions a day. That’s a lot of financial thinking. Ensure you are playing fair part on such financial decisions to understand better on what is happening.

6. Never be a guarantor or take responsibility of others debts

Regardless of who are, never take the responsibility of their debt than just morally supporting them to come out of debt. Never ever be a guarantor for anyone who are taking loan from banks or from any financial institutions. Its a killer mistake.

7. Always set aside a part of earning

Never contribute entire earnings to the family fund or to someone. Instead, set it aside to work as an emergency fund. This would be helpful to make investments or future focused investing decisions.

8. Always have a budget handy

Think and create a budget and be disciplined to follow. Read this article to know how to create a family budget. It discuss the process from start to end. Make necessary changes to suite with your needs.

Major advantages of having a budget.

  1. Budgeting gives control over money to a great extent.
  2. Keep focused on your financial goals
  3. Makes you aware what is going on with your money
  4. Helps you organize your spending and savings
  5. Makes you decide things in advance
  6. Enables you to save for expected and unexpected costs
  7. Provides you with an early warning for potential financial problems
  8. Helps you determine if you can take debt and how much
  9. Enables you to produce extra money by avoiding late fees, penalties etc.
  10. Budgeting also makes you to take control over your debts
  11. Quality of your life and financial status would improve to great extend

9. Spend some time each day for money

Women should identify and spend some time in each day to make money management decisions. If you don’t allocate time to manage your money, you won’t have any money to manage.

10. Learn and practice money saving tips

With the help of internet, collect money saving tips and practice the most relevant tips. This would let one to save lots of money slowly but steadily. There are many money saving tips available in this blog to search and read.

11. Never lend own items

A car is a best example for it. Others never care like the owner cares. So it is better to not give or lend such to anyone.

12. Never miss any investing opportunities

Investing do not required huge money ready in hand but can start as little as possible. Investing should have right goals with time frame. This would help to select the right investment instruments to create an investment portfolio to achieve the goals.

What are the major advantages of investing

  1. Anyone can start investing with little money
  2. Having a portfolio with right mix of investment instruments capable to achieve the goals
  3. Investing not limited to age and risk tolerance. Products are available for people with any age and risk tolerance
  4. Investment increase wealth through the power of compounding interest
  5. You will be a step ahead from everyone on financial independence
  6. You will get benefited from tax free advantages such as dividends, tax free gains etc.

13. Be your own boss

Advises available free from everywhere. Each and everyone around us have advise and suggestions about money and its management. Can listen to such people to a certain extend and should not allow to involve personal money matters.Never take advises and suggestions blindly from others, but be careful to choose the best and avoid the rest.

14. Don’t lend money to others

Never be available for anyone to approach you easily to lend money. Should have the gut to say a ‘no’ if someone approaches to ask money from you unless it is necessary. Have a habit of never lending and borrowing money.

15. Never co-sign with any documents.

For an example, if a friend, relative or a family member approaches you to request co-sign with them for a loan, fearlessly say a big ‘no’ to them. If not do so, when he default the loan repayment, you would be responsible to repay! Do not take unnecessary headaches. Remember, being a social animal must should hold individualism on personal finance matters.

16. Never fall in debt.

Control credit card usage to avoid money loss and penalties. This would also affect credit score. If you are having debts, prefer to get out of debt first. When a person having debt, it will affect the financial planning allover. Debt free life is beautiful.

17. Always consider bargain

Study shows women are 10 times better than men to bargain (barking too)! If you are one among those not willing to bargain, learn and that would save lots of money.

18. Be a mentor to others

Educate members in family about money management, especially children. Share experience and educate others to enhance self money management skills.

19. Generate additional income

Identify the ways to generate additional income during free time. Play home, beauty parlor, home tuition, meditation such as yoga, are best are the friendly business of women. Read the best business ideas for women.

20. Learn from mistakes.

No one exempt from mistakes. It is common and can happen at anytime especially when dealing with money and personal finance. However, don’t let them hobble you.

This is a guest post edited by Sherin