Are you one of those women, who say “financial management is not my cup of tea” because you don’t have the academic financial background or sound knowledge about finance, investment, tax saving, money management, etc., then you need to pause and think again.
Financial management, that too for personal finance, is not as difficult as you think, and even if it is difficult, then also you must make efforts to become a pro in personal finance management because your acquired knowledge on this can be the key to many treasures of prosperity. For instance, as a financially aware woman, you will be able to define a clear and smarter path leading to your financial goals.
Materializing the dream of wealth creation will become more achievable to you. Also, you will be able to build the best protection shield against life emergencies. In short, if you take hold of your personal finance and plan it wisely, then you attain financial prosperity for yourself and your family too.
How Should Women Do Their Financial Management?
Having a sound financial knowledge, especially an academic financial background is a plus point as one will always know of financial jargons, investment concepts & the intricacies involved in the financial ecosystem. But even if you don’t have the academic financial background and you don’t understand any of above-mentioned things, then also you can comfortably acquire this knowledge.
For this, no academic background is required. Investment concepts and products are designed in a way that one can easily understand and utilize them. All one need is will and awareness!.
Here is the wireframe on what you can do for your financial management:
1. Take the Route of Investment:
If you are saving the money in your savings account, then be really careful, your money is not growing rather its value will decrease because of inflation. Thus, investment is the only way to grow your money. You need to link your investment with your financial goals so that you can easily fulfill your goals utilizing the amount earned from your investments.
2. Know Your Financial Goals:
Emergency fund for any household replacement, children higher education fund, retirement corpus, Vacation, buying a house, looking after elderly parents, you need to realize what are your financial goals?
3. Divide Your Goals:
Know clearly which are your short term and long term goals.
4. Know the Investment Options Available to You:
This information you can easily find online and the popular investment options are Fixed Deposits, Post Office Schemes, Mutual Funds, Direct Stocks, Gold, Real Estate, Bonds, etc.
5. Read up and Get Advice too:
All the investment options mentioned above have different features that you need to know in length. Not having an academic financial background is not an obstacle here, because you will definitely have many people in your trusted friends who will have knowledge on this. You can take advice from any of your trusted acquaintance.
Moreover, you live in the era of digital world, if you are ready to read then there is no dearth of information. You can read and know all about the investment products. And last but the very important, there are professional organisations available to help you on this. You can take help from professional financial advisers, who will provide you with the detailed and specific overview of each and every investment options available, risk associated and as per your short term & long term goals.
6. Diversify your Portfolio Through Proper Asset Allocation:
Once you have become aware of the investment products, you need to create an investment portfolio for yourself. Here, Asset Allocation is core to the construction of your investment portfolio as it allows you to diversify your portfolio, which further helps in minimizing the risk involved in the investments. Each of your investment is an asset. Certain investments are subject to market risk but offer good returns like equities, while some investment products are not risky such as PPF, but offers fewer returns. Thus, asset allocation let you properly diversify your investments (assets) so that you can have a balance of risks versus rewards.
7. Execution is the Key:
Everything mentioned above is a ‘Strategy’ that you need to follow to get the best out of your investments. But a strategy makes sense only when you execute it. Likewise, having knowledge regarding finance management and investment will turn fruitful to you, only if you apply it to yourself and your family’s investment matters.
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