10 Things Women Must Do to Become Financially Independent
Gone are the days when women were homemakers throughout their lives for the sake of the whole family! The changing global scenarios and people’s sentiments have introduced many opportunities for women to excel in professional spheres. Women are bringing a great change in different parts of our country.
However, it is equally important that they become financially independent considering investments and retirement planning for a comfortable and peaceful life. Women and investing need not be a topic hard to understand any longer. There are various aspects that a woman should consider and do to become financially independent.
How can Women Become Financially Independent?
Keep track of expenses: Spending without a plan can seem enticing. However, in the long run, it can lead to a difficult financial situation. Therefore, it is necessary to keep track of expenses and make a well-defined budget with the different sources of income and the much-needed expenditures for a basic understanding of their financial status. It is important to exclude unnecessary expenses and allocate a considerable amount of money for savings and investments.
Allocate funds for an emergency: Continuing on a savings or an investment plan is subject to a basic financial plan. Women should understand their financial status by making a budget and tracking the expenses and write down their financial goals in the short term and long term and decide on the funds to invest. Investment is the best way to create wealth for a secure financial future. While allocating funds to invest, it is necessary to set aside a fund for contingency purposes not to break the investment plan horizon.
Investment research: After a financial plan and a contingency fund are decided, women are good to go for investment research. There should be a definite fund to invest in apart from the monthly budget and the contingency fund.
Women should spend their quality time understanding the different investment options rather than completely relying on a financial expert. They can get expert advice to increase their knowledge. However, it is recommended that personal research will always help for better investment benefits.
Diversified portfolio: While considering an investment portfolio, it is important to diversify it among different sectors for maximum benefits. For example, if they have invested primarily in bank stocks, their returns or the fund value will suffer if the government announces the interest rate.
Therefore, as a primary step, diversifying into high, moderate and low-risk investments for a balanced return should be taken up. If one asset class suffers, the other can compensate to ensure financial stability.
Start investing early: The most important part of investments and acquiring financial independence is investing early. It can be as early as while starting their career. Investing early in life will be beneficial because the commitments are less, paving the way to invest more.
Also, women will get into a financial discipline and learn to continue the same even as they progress in their family commitments.
Keep reviewing investments: Investing in different financial instruments is an important action. However, with the increase in technology and development worldwide happening so frequently, it is important to review the investments and make the necessary modifications to strike the best returns for the future.
Retirement planning: Many women consider savings and investment important and do their best to accomplish a goal. For example, saving for their child's education. However, retirement planning with the best pension plan is more important compared to other family commitments. It is primarily because a financial reserve should support the women, letting them stay financially independent even after retirement. Dependency on another person can affect their self-esteem.
Savings insurance plan: Life cover is a responsibility if women hold a financial stake in the family and even otherwise also taking into consideration the contribution they make to manage the well-being of the family.
Single women having children to raise and parents to be taken care of must consider life insurance with guaranteed1 returns. Tata AIA life offers different types of savings and guaranteed1 returns plans with various features that can be modified according to individual preferences. You can buy a life cover with add-on riders# if necessary and, additionally, guaranteed1 returns.
Guaranteed1 return plans in India offer flexible features to benefit different types of people. For example, it provides different payout options such as receiving the maturity benefit as a lump sum amount, a combination of a lump sum and a guaranteed1 annual income and regular monthly income.
Choose a longer time horizon: Every savings and investment for women should extend for a longer time horizon. The longer they stay invested, the better is the fund accumulated in the plan, and the higher are the returns. If they invest in financial securities and there is market volatility causing price fluctuations, a longer time horizon will correct the market and nullify the risks involved.
Feel confident and execute the plan: The last and the most important aspect is to feel confident about the financial plan and boldly execute it for the best returns and contribute sufficiently to financial independence. When there is slight neglect or lack of confidence, staying invested becomes an issue, and the whole purpose of the financial plan will go in vain.
Financial independence is a prerequisite for women to have a good standard of living at different stages in life. An effective financial plan with a diversified portfolio, a fund for contingency and a savings insurance plan will streamline the way for financial independence. Starting to invest early, reviewing the portfolio regularly, and being confident to execute the plan are certainly the final keys to success!