Whether you’re building your own business, or just trying to take charge of your finances, several financial experts offer targeted advice for women. No matter which stage of life you’re in, or if you’re a novice at finances, there is a lot you can do to achieve financial security. Let’s see how:
Usually, early adulthood refers to the ages of 18 through to your mid-twenties. For many, early adulthood means either tertiary education, part-time or full-time employment. Financial experts say this is the ideal period to begin your financial journey. It is the right time to start simple saving plans – it could be for your college tuition, a vacation, or even if you’re planning to move out of your parents’ home.
The easiest way to kick-start your financial planning at that age is to set aside a small amount of money every week, which will make a massive difference to your savings in the long run. Starting a fixed or recurring deposit makes this task easier for you. You could also set up a fund for your future goals, say – an extensive travel plan to check things off your bucket list.
If you have a 3-5-year investment horizon, consider investing in a balanced fund or a large-cap fund. You can also save on income tax by investing in Equity Linked Savings Scheme (ELSS or tax-saving mutual funds).
Tying the Knot
Marriage is a significant milestone in every one’s life and not to mention, one of the most important transition periods too. With marriage, many other milestones follow like buying your first home and preparing to be a parent. When you marry, it’s not just your financial security that you have to take care of, but that of your partner and your family too. Discuss your savings, expenses, debts and investments with your partner, so you can together build a comprehensive investment plan secure your collective financial future.
Things you could do include starting a joint savings account. You could also invest in liquid funds for near-term goals or for day-to-day or monthly expenses. For longer term goals (5+ year horizon), you could invest in mid or small capequity mutual funds.
As a parent, you’ll have new expenses to take care of – childcare, schooling, higher education and maybe even your child’s marriage. With several financial goals to achieve during this stage of life, the best way forward is to start a SIP for each goal. Also remember that as your income increases, keep increasing your SIP amount as well. By planning early for your child’s goals, you not only invest comfortably over a long-term but also avoid getting into huge debts. This will benefit you in the long run.
To say that retirement planning is essential is an understatement. A safe and financially secure retirement is the dream, which can be a reality for many women. Retirement though several years away is the goal you need to start investing for very early on in life. This is because you need to build a corpus that will allow you to lead the life you want for 20+ years once you retire. Start a long-term SIP in an equity mutual fund, and as you get closer to retirement shift your investments towards assets with lower risk (debt funds). Your investments can continue to grow, and with Systematic Transfer Plans (transfer from equity to debt for stability) and Systematic Withdrawal Plans (transfer from debt funds to bank for monthly income) you can make your retirement a happy one. Read our golden rules for retirement here.
When weighing your options, be sure to contact your financial advisor so you can successfully navigate your finances at every stage of your life. It is never too early to get proactive about your finances.