Traditionally finances have been considered a man’s domain. Though women have managed family finances and also been responsible for savings, they have depended on a male figure father, husband or brother to take financial decisions. But times have changed. More and more women are coming into the workforce and taking charge of their lives and careers.
With the high cost of living, it is important that the lady of the house is also an earning member. Financial independence is required to boost one’s morale and also ensure that the woman is not dependent on her husband. Being financially independent means a woman can fulfil her wishes and also have an equal say in the financial matters of the family. Besides, financial independence brings a renewed sense of self esteem necessary for a healthy partnership. In this article we will look at how to become a financially independent woman.
1. Have a budget in place: The first thing to do if one wants to be a financial independent woman is to have a clear sense of one’s income and expenses. One needs to list down all expenses under various heads, add it up to get total expenses, and then deduct it from the total income to arrive at a surplus. In case there is zero or very little surplus, one needs to cut down on discretionary expenses like eating out and entertainment till at least 10 per cent of the income is saved. Having a budget in place is important to know where one’s hard earned money is going, plus also make adjustments if necessary. Only when there is a surplus can money be put away for future savings.
2. Build an emergency fund: Having an emergency fund is the basis of financial independence. Emergencies can strike anytime, they can be a job loss, or health emergency of a family member and such situations could mean a loss or income or the urgent need of money. Every woman should put 3-6 months of her monthly expenses, party in a savings bank account and party in liquid funds so that it can be accessed quickly if required. This fund should not be touched in normal circumstances.
3. Take necessary insurance cover: A key part of being a financially independent woman is to be properly insured. With medical costs on the rise, adequate medical insurance is a must. Even if medical insurance is provided by the employer, one needs to have personal medical insurance cover. If a woman has any dependants she should also buy a pure term life insurance policy after doing a needs analysis.
4. Plan for future goals: It is important to figure out long and short term goals. Short term goals may include buying a car or going on a vacation while long term goals would include education of children and retirement. Buying a home is also a major goal. Women need to carefully list down their goals and then have a financial plan in place for each of them.
5. Get advice from a financial planner: Even as one takes interest in financial planning, it is recommended to hire the services of a financial planner. A financial planner will help determine short and long term goals, save and invest smartly, get adequately insured and manage your taxes. Having regular discussions with a financial planner is important so one is on the track to financial independence.
Financial independence is the key to leading a happy and healthy life. And it is never too late to start.