Why every woman should know money management?

Men usually do well at the money management but women should also take keen interest in knowing more about it. I personally feel that every woman should be financially independent and they need to earn their own money which means that they need to have good education, career and also should know how to manage money. If a girl is smart enough to earn her money than she is definitely wise enough to invest it.

Young working women, as soon as they start earning, should get into the habit of savings. Get into the habit for getting financial knowledge which means knowing about financial products like FD, RD, PPF, Mutual fund, Life Insurance and start investing because in the early stage of your career, the are earnings are less and if you make a mistake by investing a very small sum in the wrong place, the overall effect of that mistake would be minor as the sum invested will be less as well. But you will learn from your mistakes so that when you get into 30s and 40s and earn more than you don’t repeat such mistakes like in your 20s.

One has to invest roughly 25-30% of the earned money for your future need or else you will get into the habit of spending. You need to follow the formula which says your total income minus your saving should be your expenditure. 

Monthly Income – Monthly Saving SHOULD BE Your Expenses.

As you move in the middle age, you will have a family to take care of and have higher financial needs of buying assets like a house, car, child education, retirement etc. You will have to chart out your financial goals can categorize them into short term, medium term and long term goals. You can then decide on the products that you want to get into, to build your financial portfolio depending on your risk appetite.

MOST IMPORTANTLY MEN MUST CONSIDER THAT ALL FINANCIAL DECISIONS SHOULD BE FAMILY DECISIONS INVOLVING YOUR SPOUSE SO THAT WHOLE FAMILY IS ON THE SAME PAGE. Irrespective of whether your spouse is an earning member or a homemaker, it doesn’t matter, she should also be a part of these financial decisions.

Retirement planning is also a very important phase of life as you might have no income or less income post retirement. So it has to be planned in the accumulation phase or working phase where you have active income and can accumulate a corpus which will help to give you regular income in the retirement phase or the distribution phase and you are financially independent.

Why women should know your finance well and be involved in family financial decisions because;

  • Normally women outlive their spouse so they need to plan for longer life
  • Might have longer retirement life and the need for regular income will be longer

An important thing to do is to get sorted on your financial portfolio is to get involved in financial decision making, declutter your portfolio if you have too many assets and simplify it so that you have better control over it. Also get your paper work up to date like all your financial instruments should have nominations, latest address and contact details and most importantly PREPARING A WILL so that your family has clear cut understanding on the distribution of wealth.

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