Why Women Must Prioritize Financial Planning for Their Daily Lives

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Why Women Must Prioritize Financial Planning for
Their Daily Lives
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• Introduction
• In todays world, it is essential for women to
  actively participate in financial planning to
  ensure their financial stability and
  independence. Unfortunately, many women tend to
  overlook this crucial aspect of their lives. This
  article explores the compelling reasons why women
  should handle their finances, emphasizing the
  significance of financial planning for their
  daily lives. Compelling reasons why women should
  handle their finances
• Achieving Financial Freedom A woman who is
  financially independent is not reliant on others
  for support. Thus, it improves womens sense of
  worth and respect for themselves.
• Preparing For Emergencies Emergencies are a
  part of life. Negative events abound, ranging
  from health to fatalities to accidents. Women
  must therefore prepare for these unforeseen
  setbacks by saving money in a contingency
  account.
• Marriage Parenthood Bills Two significant
  turning points in a womans life are marriage and
  motherhood. Women today no longer rely on their
  parents to pay for their weddings in two-income
  families instead, they contribute financially to
  their childrens upbringing.
• 4. Spending on Higher Education A woman may also
  aspire to pursue greater education in order to
  secure a better job position. She might also
  desire to change occupations, for which she would
  require the necessary training. Therefore,
  careful financial preparation is required in
  order to prepare for these situations.
  

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• 5. Taking Career Breaks Any lady might want to
  take a break from her job. But if she does, there
  wont be a consistent source of money. She will
  therefore need to prepare for this time.
  Additionally, taking a career hiatus could come
  with extra costs like tuition for skill-upgrading
  classes.
• Components of Financial Planning
• Setting Financial Goals Your desired outcomes in
  terms of money are determined by your financial
  goals. Short-term, medium-term, and long-term
  financial goals are the three different
  categories. These objectives could include
  acquiring a home, going on an international trip,
  or engaging in a certain way of life or activity.
  A financial plans first element is having a
  target in terms of money.
• Identifying your baseline The second step in
  your financial planning is to assess your current
  situation. To do this, determine your starting
  position or net worth. You can determine the
  baseline from which to start by deducting your
  assets from your liabilities. Assets include
  money in banks, stocks and bonds, real estate,
  jewellery, etc. Credit card debts, loans,
  mortgages, and other obligations are
  liabilities.

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• 3. Budgeting your Cash flow The next step is to
  evaluate how you are presently spending your
  money. Consider your spending patterns and your
  means of subsistence.
• 4. Emergency Fund As said before, emergencies
  can happen at any time. Ideally, you should aim
  to have enough money in your emergency fund to
  cover six months of no income. Save this cash in
  liquid assets to make accessing it simple for
  you.
• 5. Retirement Plan When making financial plans,
  women often are unaware that they live longer
  than men. As a result, they will typically need
  more money to cope with living without a salary.
  As a result, making a financial strategy must
  include retirement planning.
• Steps of Financial Planning
• 1. Allocate a budget Create a customized budget
  based on your goals and the timeframes you want
  to attain them, taking into account your monthly
  or annual income. Starting by applying the
  50-30-20 guideline is a smart idea. Spend 50 of
  your monthly take-home earnings on food, 30 on
  savings and investments, and the remaining 20
  for living like a queen.
• 2. Take charge of fixed expenses As the name
  implies, there is little chance that your fixed
  expenses will alter anytime soon. They consist of
  things like insurance, rent and EMI. Decide on a
  limit and rank your spending in order of
  significance. The majority of your budgeted
  expenses will be fixed costs. You can reduce your
  fixed expenses by moving into a home that is less
  expensive or by prepaying a loan.
• 3. Restrict variable expenses You risk falling
  into a financial hole if you dont keep track of
  variable expenses, which might include things
  like unavoidable travel, phone, and internet
  costs as well as impulsive purchases and nights
  out with friends. You dont have to forego the
  pleasure, but if you have long-term goals like
  establishing your own business or buying a house,
  you may want to consider about budgeting your
  money more carefully.

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• 4. Put technology to use There are several
  budgeting applications available today that may
  help you stay on track with your finances, reduce
  your debt, organize all of your investments, and
  even invest any extra change from your shopping
  trips. Technology may be incredibly helpful,
  especially in this day and age when practically
  everyone has a smartphone.
• 5. Optimize investments Saving money alone is
  insufficient. Additionally, you must choose
  wisely when investing. Not only must your
  investment portfolio outperform inflation, but it
  must also produce enough wealth for you to
  achieve financial independence as soon as
  possible.
• 6. Plan your tax outgo Make sure you get the
  most out of any investing and tax-saving
  opportunities that are available to you. There is
  a product for everyone, including the Public
  Provident Fund and the Equity Linked Savings
  Scheme.  You are eligible for additional
  deductions if you are a current homeowner.
• 7. Plan for the long-term You cant merely focus
  on the upcoming months or years anymore. Your
  investments must be planned such that, should you
  decide to retire, you may do so comfortably. You
  can take charge of your own future if you have
  access to a Demat Account.
• Conclusion From the above information we
  conclude that, financial planning for women is
  very important for them. A few issues and topics
  that every woman should consider were discussed.
  Every women should make financial planning a
  priority in their daily lives and put it into
  practice. The above article has been
  written by Mr. Omkar Bandivdekar (CMA Aspirant)
  and reviewed by Mr. Suyash Tripathi (Chartered
  Accountant) and they can be reached at
  mdomkarnitinbandivdekar_at_gmail.com and
  tripathi.r.suyash_at_gmail.com .
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