Women today are so busy in juggling family responsibilities, household chores, and their careers that they often forget to think about their future. Although family and career are important but so is taking care of yourself, thinking about your retirement and planning for your financial security. Considering inflation and other future vulnerabilities, ignoring financial planning now may hurt you in future.
Hence, women whowant to be financially independent must begin financial planning now before theyare left with only regrets. Here are five financial mix-ups that women should maintain a strategic distance from to lose less and spare more for future.
- Leaving Money Related Decisions on Your Partner
Despite earning money, many womenleave financial decisions entirely on their partner. Hence, they get minimal experience in handling their investments and overall finances.
Another surprising thing is that some women even give their entire salaries to their spouse to manage. Although this decision denotes that women trust theirpartner but giving the entire income tothe partner leaves them with nothing in the end.
Women need to start managing beyond household budget and take charge of their personal finance. This means handling their income on their own, taking aninterest in family’s financial decisions and so on.
If you want to get knowledge and understand finance better, discuss it with your partner or consult financial experts.
- Compromising Career Goals
If you wish to take a short breakto take care of someone sick in your family or your newborn child, there is nothing wrong with it. However, such breaks should not be the reason to end your career.
More often, women quit their jobs for the sake of their children and family, which not only causes a dent in their confidence but also snatches their financial independence and future security.
In some cases, the reasons for quitting the job may be unavoidable, but it is still advisable to not give up yourjobseasily. It’s better to find a solution that allows you to fulfilyour family commitments while continuing your job. Consider work-from-homeoption or opt for freelance work.Remember that your jobwill empower you financially to deal with a monetary loss, demise or divorce.
- Staying Away from Decisions on Investments
In many cases, with regards to making investments, women put their money in safe avenues like fixed deposit and PPF. Although there is no problem in making investments in safe avenues, but while trying to be safe women lose opportunities to generate higher returns.
If you want your money to grow, invest in equity-linked investment options such mutual funds instead of PPF and fixed deposit. The former option can give you better returns than latter. Additionally, you can opt for long-term investment strategies.
- Being Unprepared for Emergencies
Since future is unpredictable, womenneed to be always prepared for the worst. To ensure that unforeseen situations do not negatively affect the overall financial well-being, women must have the cash to tackle suchsituations.
Creating an emergencyfundis a good idea. Women must take a portion out from their salaries every month and add it in the emergency fund. Moreover, this fundmust cover at least six months of your monthly expenses. Doing so will take you closer to smart financial planning.
- Delaying Retirement Planning
Financial planning for your retirement is crucial, irrespective of gender. Hence, delaying retirement planning can prove to be a big financial mistake. As a wife or a mother, you might want to save money for the betterment and security of your family. But you should likewise think about your ownsecurity and how you are going to spend your life in your golden years.
Hence you need to start investing for your retirement as soon as you start earning. Long-term investing in equity mutual funds via a SIP route can be a good option as it will give more time to grow and compound your money.
By indulging in financial planning for your retirement, you can have money of your own in old age, thus, giving you the freedom to use it wherever you like. Moreover, with an effectivefinancialplanning, no matter what lies in the future, you can become financially prepared for the worst financial conditions.
The Bottom Line: Every woman must commitherself to avoid these money mistakes and take control of her financial future. This is not a difficult task to implement. Making adjustments in your current financialbehaviour can make all the difference!