An often overlooked part of women's life is their money management skills. Women are known to run the family by managing everyday finances. They keep tabs on the income generated, spent, and saved by their family. But when taking and applying their money management tips in personal savings, credit scores, financial security, etc there seems to be a lag.
How many women know the saving schemes made available to them by the government? How many are aware of credit score (CIBIL)? How many know the difference between investment and asset? How many know to do their taxes? Or even have a pan card?
With of the labor force being women, financial literacy in women is necessary. Money management tips, especially for women, are the key to a more secure and independent future. This blog will get you started on your journey to personal financial management.
Money management basics
Before delving into tips for mastering your finances, there are some basic financial terms that need to be understood.
Budget
Keeping a note of daily/weekly/monthly expenses is very important to plan a secure financial future. It will help curb overspending and is believed to help save up to 15%.
Savings
Saving 20% of a person's income is a must, with 10 -15% going towards the retirement fund. Savings will come to the rescue during health issues, sudden layoffs, and other emergencies. Having proper health insurance also helps with saving money since it provides a safety net.
Asset
Usually, savings are viewed in the form of money. But buying a property, gold, bonds, etc is also a form of saving called assets. They are tangible, which means they can be seen, worn, lived in, rented out, etc.
Investment
Unlike assets, investments are not tangible. Mutual funds, share market holdings, etc come under this category of savings. One cannot stress the importance of investor confidence when it comes to investing.
Credit score
If you are planning on applying for business, housing, and personal loans, equated monthly installments (EMI), credit cards, etc in the future, having a desirable credit score is important. CIBIL Score is a three-digit numeric summary of your credit history. Unpaid bills, loans, and EMIs will affect this score and decrease your future loaning ability.
What now?
Now that you know the basics, start prioritizing your financial needs and apply ways to improve your financial confidence. Saving and investing is much easier than you think. A variety of apps and websites are available online to help you calculate your savings.
