Financial planning can be difficult for women on many different levels compared to men. Women sometimes enjoy less privileges than their male counterparts do, which can be a challenge. It is vital for everyone to acquire the necessary skills to learn money management, but more essential for women today. Here are some useful financial planning tips for women.
Start working on the basics
Financial planning is having the ability to understand and effectively manage one’s finances. This includes knowing how to budget, , and invest monies correctly. Before going on to the bigger ideas like investing, it is important to first start with the basics of financial management. Learn to save and budget monies correctly. Women generally have more items to buy monthly, compared to men, which makes it a bit rough sometimes. Start off by identifying financial goals and get to know personal core values. Recognising one’s core values will be a guide to help make financial decisions easier.
Put a monthly budget in place
When hearing the word “budget” one immediately assumes deprivation, which is not the case. Budgeting is simply having a plan of what needs to be done with money. It’s limiting spending money on things that are not important, whilst shifting that money into areas that are of more importance. Start by reviewing monthly income. Look at living expenses and group them into budgeting categories (i.e. debts, food, utilities etc). Make a list of all the must-have expenses and work out the total amount. Minus this amount from the total monthly income, and the balance is what can be used for discretionary spending and saving. Many women find that they don’t have anything left over after this. If this is the case, then it’s time to give up some “wants” and focus spending habits on buying “needs”.
Plan for the future
Financial planning can be a challenge for women as there are many obstacles that they face. In South Africa, the gender pay gap is still an issue. Women receive lower salaries in certain jobs compared to men. It’s not as easy for them to save and invest their money. Women also tend to take less risks compared to men, they are more controlled and weary when putting their money in any investment plans. While that can be a good thing, it could also prevent them from profitable opportunities for their future. Have an open mind and work towards financial freedom. One of the ways to do this is to open up a retirement fund and have a reliable investment plan that will work best for one’s particular circumstances.
Prepare for contingencies
It is always good to be prepared for the future. Life is full of surprises and we should expect the unexpected. Medical emergencies, loss of a job or a car breakdown are all types of unexpected expenses that can have a tremendous financial impact on one’s life. Be prepared for these types of emergencies by opening up an emergency fund or an insurance plan to cover these expenses. Include the contributions to the emergency fund as part of necessities in the monthly budget.
Follow up on goals
After having all the above in place, go through everything thoroughly again and review financial goals and plans. Make changes according to one’s circumstances and then follow through with it. Additionally, it is helpful to go to someone who has experience in the field for advice and guidance on financial planning.
These are some basic tips to help women become financially savvy and independent. It is about time women take control of their lives and have a foundation that they can always lean back onto. For more useful tips and advice on financial planning for women, get in touch with Remnant today.