Women perform a variety of roles, such as that of a devout wife, mother, and daughter. Apart from this, a lot of them are succeeding professionally, leaving their mark, and providing for their families. International Women’s Day is celebrated to honor women’s accomplishments and acknowledge their courage. Women are overcoming social barriers and breaking free from patriarchy because of education, skill development, and most importantly, a strong desire to make a difference in the world.
Having said that, I find it troubling that the majority of women rely on their father, spouse, or brother(s) to manage their finances. They don’t have much influence on the family’s finances and/or have little control over the money made. I want to assure all the ladies who are reading this that you are independent and fully competent in making financial planning decisions.
This year’s official theme for Women’s Day 2024 is “Inspire Inclusion”. The goal of the theme is to “inspire everyone to understand and value women’s inclusion” in every aspect especially in financial decision making and let them be financially independent.
Real Meaning of Financial Independence
The freedom to make financial decisions that enable you to live the life you choose and reach your desired financial objectives is the true definition of financial independence.
Having financial independence will support you in making decisions and navigating through difficult situations, such as when your family’s primary provider becomes disabled, has a serious illness, passes away, or loses their job. Here are some pointers to guarantee your financial stability and independence:
Establish SMART financial objectives
Everyone has ambitions and desires, such as purchasing a dream home, vehicle, or expensive electronics, traveling abroad, saving for our children’s futures, and retiring comfortably. Setting SMART goals is necessary for a lot of things; they can’t be ambiguous. That is to say, the objectives you establish ought to be Time-bound, Realistic, Specific, Measurable, and Adjustable.
Additionally, group them into short-, medium-, and long-term categories based on the amount of time left to accomplish them. Make your asset allocation and wise investment decisions based on this.
Invest in profitable investments
A bank savings account is insufficient during periods of high inflation or growing living expenses. To combat inflation, you must spend your hard-earned money on profitable asset classes and investment opportunities. The long-term pattern of gold and stock markets indicates that these asset classes are the best for hedging inflation and accumulating wealth.
Having said that, to make the best decision, thoroughly assess your risk tolerance, financial status, longer-term investment goals, financial aims, and the amount of time available to reach those goals. Additionally, consider investing through a Systematic Investment Plan (SIP) or making recurring lump sum investments.
Spread your assets, or diversify across asset classes
A must-do to build a robust portfolio that can sustain in the different market cycles. You may take into consideration the well-considered and tried-and-true 12-20-80 Asset Allocation approach. Put away, for example, twelve months’ worth of normal monthly costs (such as loan EMIs) in a liquid fund, which you can use in an emergency, twenty percent in gold, which often has a negative relationship with stocks, and eighty percent (the growth portion) inappropriately diversified equity funds. You can safeguard your downside and get risk-adjusted returns that outpace inflation by using this strategy.
Optimally Insure yourself
In addition to making wise investments, remember to insure yourself as much as possible for both life and health. You know, we are more exposed to certain medical issues including diabetes, immune system disorders, arthritis, severe illnesses, and irregular blood pressure because of the stress we endure. Ignoring your health might end up costing you a lot of money. Having the best possible health insurance coverage is crucial during periods of high medical inflation so that medical expenses can be covered without any additional burden to your pocket.
Combine tax planning with investing, saving, and insurance
A penny earned is a penny saved from taxes! Thus, always do your hardest to arrange your taxes wisely. Make a thoughtful decision between the Old Tax Regime and the New Tax Regime based on your annual gross income.
If you don’t know enough about finances to handle your hard-earned money, try to develop that skill. When in doubt, seek the advice of objective financial professionals who can support you on the path to accumulating money.
Commit to start the path to financial freedom on Women’s Day.