We all want to live a happier, healthier, financially richer life. And as a woman, it is all the more important to be aware of money and finances. Principles of personal finance management are gender neutral but a woman faces situations in life that men don’t such as relocation due to marriage, career disruption on childbirth, re-entry into corporate rat race or a complete career switch to achieve work-life balance. A woman also has to prepare for mishaps such as divorce or loss of a spouse. Try these simple, strategies that can accelerate your progress toward personal finance victories throughout the year. In Jan 2019, Femina India published our article on 7 Money Resolutions.

 

Go to the gym every day, Lose 10 kg, get a handle on money, save more, spend less! Along with the new year comes the same old resolutions. Cut back on coffees, pizzas, dresses, vacations. What is the use of money if we’re not allowed to spend it? Trying harder does not work for we can resist everything but temptation.  And as February creeps in, so do the fries and pizzas and spendings and credit cards. Why do we have to continue the practice of New Year Resolutions started by ancient Babylonians some 4000 years ago who at the start of the year promised their Gods that they would return borrowed objects and pay their debts?

First Step for Women and Finance: Take control

Taking control of your money is probably the most important thing you can do. Managing finances has been a male agenda due to the gendered division of household duties. And women often overestimate the men’s ability to do it right and underestimate their own ability to manage their financial life.

Ladies, it’s 2019 and that means that it’s time to stop delegating the management of your money to the male members in your family.  This 2019, resolve to be aware of where every rupee of your salary is going, whether it’s expenses, taxes or investments.

If you’re married, you need to know how your partner is using his salary. Schedule a monthly money meeting with your partner to talk about money. Even if you’re a homemaker, you still need to have this conversation.

When you know you know how much money is coming in and out of your bank account, you will be equipped to make better money-related decisions.

2 Know Thy Money

The thought of keeping account of my expenses makes me want to run the other way. But I hate to budget.  Recording purchases like my mother are just not my cup of tea. It’s like having a selfie uploaded which has got no likes or going to the dentist or public speaking

But the issue is not of tracking expenses, but understanding how your money interacts with your emotions, moods, values and priorities. If you don’t understand your relationship with money, then this is the single best step you can take to improve your life! I did the following two things:

• Found an expense tracking app which could figure out my expenses through the SMSs.
• Scheduled weekly meeting with myself to review my spendings, the credit card sweep, the balance amount.

And if you can’t do that try the envelope approach with breakup which doesn’t break your heart, like 50/30/20 rule: 50% for essentials, 30% for desires, and 20% for investing. Once the money in an envelope is over it’s over, done with for that month Period!

This 6 minute video from Filtercopy shows what happens to salary when you don’t take care of it!

3 Stop, Think and Spend

You see your friend’s vacation to a tropical beach or a new car on Instagram or Facebook and you start comparing your life to theirs. Comparisons steal your joy and then your money.

Forget the FOMO, Focus on living your life not someone’s else.  Spend on the things you love, and cut costs on the things you don’t.

You want that thing Ok. Don’t purchase it now, cool off, postpone the decision by at least a few hours.  Then revisit your decision to buy. And then if you are still convinced that is the best thing to happen after Deepika-Ranveer marriage, Go ahead and buy!

4 Use Credit card Properly

A credit card is one of the best financial tool at your disposal provided you use it properly. And How does one use their credit card properly? By swiping judiciously, by not withdrawing cash using your credit card, by being aware of the billing cycle, by avoiding the minimum due trap and paying your credit card bill in full and on time. Yes, I repeat the credit card bill in full and on time. No cheating here!

5  Have a Good Credit Score

You might want to borrow money for higher studies to buy a car or home. The lender will check your credit score to access risk when they are evaluating your loan application.  A Credit Score is a three digit numeric ranging between 300-900 which is summary of your credit history. Keep a credit score above 750.  Higher credit score will help you in getting the loan approved and also get a better interest rate.

From 1st January 2017 Reserve Bank of India (RBI) has made it obligatory for all credit information agencies in the country(CIBIL, Experian, Equifax etc ), to give on request once a year a full credit report free of cost. Request one Today.

Have a good understanding of your credit score. If there are some troubled spots work on them to improve it. Avoid late fees, pay your bills on time, don’t take loans unnecessarily and don’t become a guarantor of the loan.

6 Automate your finances

It’s time for Automation, for putting systems in place, rather than continuously having to choose how much to spend or save, leaving you to focus on the things that really matter

Automate payment of bills to eliminate worrying over whether you paid a bill or not, which includes rent/EMI, credit cards, memberships etc.

Automate your Savings. A predefined amount to be saved for Emergency funds, short-term plans such as vacation or a new dress. You can open another bank account which is Touch me not account, till its time.

Automate your investments. Start with small steps. You can start with as little as Rs 500. Invest at a predetermined amount into Recurring Deposit/Fixed Deposit/Mutual funds/Stocks. Everything is just an app away now!

7  Be Money Aware

Money jargons, financial terminologies puts off many people and especially women. Remember no one was born with financial knowledge, one needs to start from basic like ABC or Do re me. Start by reading one money article a week. Subscribe to good YouTube finance channels.

Your resolutions are about the life you want and they begin with you. Your New Year’s resolutions should be your goals, not someone else’s hopes for you.  The changes will be difficult but not impossible.  Taking small steps is key and these small steps will lead to big progress.

Here’s to a fantastic life ahead and a financial independent you. A poem from book Unfinished by budding young journalist Kamakshi Gupta,

Flip the page

Turn over to a new chapter

Plant a different seed

Because you honey

You deserve every new opportunity

That knocks on your door

You deserve every new beginning

That you wish for

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• Oh you are only a housewife!
• Women and Financial Planning
• Can Women Have It All : Indra Nooyi, Anne-Marie Slaughter,Sheryl Sandberg
• Changing Name:What to do?

How do you approach Personal Finance? Is the approach of Women towards money or personal finance different from that of man? What is the most difficult part of managing money?