It is necessary for every woman, as it is for all folks, to take control of their money. Here are a few things that every woman would do well to remember when it comes to money and personal finance.
Have you own bank account
If you were working earlier or are still working, it is good to keep your own savings separately in a bank account in your name and contribute to the family kitty from it. While you may choose to have at least one account jointly with your partner, your primary savings can remain in your account. Similarly, if you choose to have a credit card, have one on your own. It helps build your own credit score and thus helps provide a quick record of your credit when you choose to borrow at any point.
Sit for the big decisions
Women have a tendency to outsource all money and investment related matters to their partners or father. If you choose to have somebody do it, then you must be aware of what is being done to your money. Faith is good but awareness is necessary. Whether it is for buying a house or taking an insurance policy or simply a discussion with your financial advisor or auditor, make sure you are present with your partner in all of these meetings and provide your views.
Know your money trail
It is important for you to know your income and your expenses and track them every month to keep tab of your spending. You can do this even with a mobile app! This way, you will know how much you can save and can also keep a tab of your expenses, if they seem to cross your monthly average spending.
Save up for kids early on
If your partner is not already doing it, you need to have a talk about saving up for your kid’s education and start as early as possible and keep it going regularly. Thinking about saving for your kid’s higher education when he/she is 15 can be a case of too little, too late.
Don’t forget retirement
While you may be busy running household, do not forget that you need to put your feet up sometime. Make sure you and your partner are saving up enough for retirement. Consult an advisor to know how much you would need to save up. Do not forget that you have to race against inflation and therefore save up enough to ensure that you are able to meet the rising cost of living in your retired life, independently, without anybody’s help.
Not enough to save; invest well
Women can be good savers, stashing surplus left after every month’s expenditure. But your money will not multiply unless you invest them in sound, tax efficient wealth building options. Otherwise, your money might just lie in your savings bank account yielding a measly 4%!
Know about contemporary investment products
The traditional bank deposits and post office schemes or gold may be your favourite investment options but remember, there are more contemporary, regulated and far efficient wealth creating options such as mutual funds, bonds and equities to help multiply your money with lot of tax perks as well. As there is sufficient information available on these in the web, make use of it to do your bit of homework and explore these products to diversify your investment options.
Do not be in a hurry to buy a home
Most folks believe that buying a house signals settling down in life and are hence keen to buy one. However, whether they have got a house that suits their need and whether they can comfortably service the loan for the next 10-15 years is not something that they give a thought to. Do take into account that you may take a career break and the income generated in the family may go down. Also, ensure you have marital stability before you decide to buy a house together with your spouse.
Every earning member in the family as well as the homemaker should have a basic term cover. Check with your spouse if he has one and ensure you are also adequately covered. Know what the terms of the policy are and ensure that at least 8 years’ of income is covered, to help tide over any such unforeseen event.
Manage your finance online
When you have a family to care for, the often used excuse is that you do not have time to manage your money. Using online ways to invest, track and redeem makes your investing life hassle free. Adopt such online ways that come tagged with advice through mails/chats or calls. This can immensely reduce your effort and yet have a super smart way to stay invested all by yourself.