This year we had both ups and downs in our lives, due to the pandemic. Our finances were impacted in more than one way \u2013 job losses, salary cuts, no increments and no festive bonuses. In this article, we will discuss about five ways on how women can manage similar situations effectively in future.<\/p>\n\n\n\n
But before that, Women are naturally gifted with<\/p>\n\n\n\n
a) Discipline<\/strong> \u2013 Both at home or at work. They get up early, do the work diligently and balance most aspects of life. <\/p>\n\n\n\n b) Handling Crisis <\/strong>\u2013 Ex: When there is not enough food at kitchen, they bring out the creativity and manage situations<\/p>\n\n\n\n c) Communication<\/strong> \u2013 They reach out to people when needed. <\/p>\n\n\n\n Many women think money management is very difficult<\/em>, as it involves maths, complex calculations, different products etc. In reality money management can be very easy if one can adopt the following five principles<\/p>\n\n\n\n 1. Save first, before spending.<\/strong> Once the money is credited to the bank account, suggest saving at least 20% of the amount received. You should start investing from your first salary (Early 20\u2019s)<\/p>\n\n\n\n 2. Do a budget<\/strong> on a monthly basis for the remaining 80%. Put money in 6 or 7 envelopes \u2013 Example \u2013 <\/p>\n\n\n\n a. Family Needs – Vegetables, Grocery, utilities, mobile, DTH, Transportation, Maid, Driver etc<\/p>\n\n\n\n b. Kid\u2019s Education, Tuition, Self-Development<\/p>\n\n\n\n c. Parents medicines, <\/p>\n\n\n\n d. Unknown expenses – Repairs<\/p>\n\n\n\n e. Entertainment <\/p>\n\n\n\n f. Donations \/ Charities and<\/p>\n\n\n\n g. All others \u2013 EMIs, SPA, Gym, Pets<\/p>\n\n\n\n 3. At the end of the month do a quick reconciliation <\/strong>\/ introspection on budget vs. actuals. Cut down unnecessary expenses. Delayed Gratification does wonders.<\/p>\n\n\n\n 4. Invest 2% to 5% <\/strong>of your salary to upgrade yourself to stay relevant in your employment \u2013 Get certifications, learn technology, upgrading gadgets<\/p>\n\n\n\n 5. Save the 20% prudently <\/strong>and aim for returns which is 2% or 3% above inflation. Never invest in products which you don\u2019t understand (or) which promises huge returns. High returns mean high risk!!!<\/p>\n\n\n\n Next obvious question is what should I do with the 20%?<\/strong>. Where should I invest?<\/p>\n\n\n\n 1. Create an emergency fund <\/strong>which is equivalent of 3 to 6-month expenses. So, during pandemic time, even if there is a job loss, you can manage well. Best is to invest in a Bank Fixed Deposit (or) Liquid Mutual Funds.<\/p>\n\n\n\n 2. Buy a Term Insurance<\/strong> for the bread winner. For a 30-year-old non-smoker it should cost Rs. 25 per day for 50 Lakh cover. <\/p>\n\n\n\n 3. Government <\/strong>has come up with good long-term savings schemes like Public Provident Fund, Suganya Samriddhi Scheme, National Pension Scheme etc. If your employer has Voluntary Provident Fund, you can invest there. Lending money to Government at interest rate above inflation rate is the best way to protect the value of money.<\/p>\n\n\n\n 4. After doing all the above if you are left with money, you can invest in Index Mutual Funds <\/strong>\u2013 Especially Nifty ETF or Sensex ETF<\/p>\n\n\n\n 5. A small portion of the money can be invested in Gold<\/strong> \u2013 Say 5% of the 20% through Gold ETFs or Sovereign Gold Bonds, which gives 2.5% annual interest.<\/p>\n\n\n\n After doing the above if you have lots of money to invest<\/em>, then suggest meeting a Certified Financial Planner to do a financial portfolio health check-up and invest in right products, based on your risk profile, market opportunities.<\/p>\n\n\n\n Investing on a monthly basis, periodical reviews, aligning investment to goals<\/em>, will help you to achieve financial freedom by mid-40\u2019s (or) early 50\u2019s through power of compounding. <\/p>\n\n\n\n Top 8 mistakes done by many family households<\/strong><\/p>\n\n\n\n 1) Borrowing money and living lavishly<\/strong>. Example paying only the minimum amount due in the Credit card (or) taking personal loans.<\/p>\n\n\n\n 2) Keep buying gadgets (or) unnecessary things<\/strong> especially during festive times like Diwali or Online Sale promotions<\/p>\n\n\n\n 3) Thinking that expensive education <\/strong>for children is great education \u2013 In few countries, Public schools deliver better results than private schools<\/p>\n\n\n\n 4) Buying endowment, pension, ULIP policies <\/strong>from Insurance Companies. Most endowment policies give around 5% returns.<\/p>\n\n\n\n 5) Investing in products due to the pressure or influence of bank relationship manager<\/strong>s (or) relatives (or) friends <\/p>\n\n\n\n 6) Keeping the money in Saving Bank account<\/strong> (or) Bank Fixed Deposits<\/p>\n\n\n\n 7) Buying apartments for rental income<\/strong> (or) investing in plots <\/p>\n\n\n\n 8) Not buying term insurance<\/strong> at right time (Ex: after marriage (or) children\u2019s birth (or) after taking home loan) and health insurance <\/p>\n\n\n\n Women bring smiles at home. They help the family members in two key aspects \u2013 Health and Relationships. By adopting the above five principles <\/strong>they can bring smile on the third aspect – Wealth – Achieve financial freedom by mid-40’s!<\/p>\n\n\n\n Happy Earning, Happy Saving, Happy Spending, Happy Investing and Happy Life, going forward. For questions you can reach us through WhatsApp<\/a> or Email<\/a>. <\/p>\n\n\n\n WhatsApp : 98416 71678<\/p>\n\n\n\n Email : cgo@avsenthil.com<\/p>\n","protected":false},"excerpt":{"rendered":" This year we had both ups and downs in our lives, due to the pandemic. Our finances were impacted in more than one…<\/p>\n","protected":false},"author":1,"featured_media":37,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,3],"tags":[],"class_list":["post-10","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all","category-financial-planning"],"_links":{"self":[{"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/posts\/10","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/comments?post=10"}],"version-history":[{"count":2,"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/posts\/10\/revisions"}],"predecessor-version":[{"id":14,"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/posts\/10\/revisions\/14"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/media\/37"}],"wp:attachment":[{"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/media?parent=10"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/categories?post=10"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/avsenthil.com\/blog\/wp-json\/wp\/v2\/tags?post=10"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}