Gone are the days when the man was expected to be the breadwinner of the family and the woman was expected to stay at home and look after the household. Today, men and women are economically and socially equal.

Key Takeaways

• Set SMART goals to better plan your investment.
• Budget and save to invest in a diversified and tax-efficient portfolio of assets that matches your risk and return expectations.
• Efficiently manage your debt and protect your family's financial future with a comprehensive life cover. 

There was a time when women were viewed solely as nurturers and caregivers. Today, this idea has been dispelled largely, with women playing vital parts outside their traditional home-bound roles of a wife and mother. Women are now equal contributors to the economy and play a crucial part in the growth of the country.

With more women entering the workforce, learning how to manage your finances becomes crucial. To take charge of their finances, women need to understand how to plan for the future starting today. Thus, regardless of whether you are the sole breadwinner in the family or a co-earner, learning a few financial planning tips for women can help you master your finances.

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Understanding the core tenets of financial planning is essential for all women to fund their goals and lead an independent life. Here’s a list of the top 8 financial planning tips for women you can implement to prepare for the future

What’s more important than investments? Crafting a plan or strategy and investing regularly. A regular and planned investment strategy is crucial for fulfilling your goals. Planning your investments means identifying your goals, estimating the money needed to fulfil these goals, and the time frame for their fulfilment. All this helps you choose the right investment tool that meets these criteria. SIP or Systematic Investment Plans are a great way to cultivate disciplined savings and investment habits. Tailored to meet the needs of different women with equal ease, SIPs help you make regular and planned investments to meet different goals. Since SIPs are automated, you can decide on an investment amount, which will be auto-deducted from your account every month.

Set your financial goals (set them high)

Setting financial goals is one of those basic financial planning tips for women that you must be familiar with. Identifying and setting goals helps you understand how much money you need to accumulate to meet those milestones. Depending on when you wish to achieve the goal, your goals can be short-, medium-, or long-term in nature. Financial goals like planning a vacation or buying a car are short-term goals since they can be achieved within the next 1-3 years. Long-term goals are goals you plan to achieve over the next 5 years or more. These may include purchasing a home, planning for your child’s education, or building a retirement corpus. Medium-term goals fall in between short and long-term ones. Regardless of the timeframe in question, your goals should be SMART–Specific, Measurable, Achievable, Relevant, and Time-Bound. Using the SMART metric to evaluate and set goals can help ensure a disciplined investment approach.

Save, save, and save a little more!

This financial tip for women is a no-brainer. Savings are the stepping stones to a well-planned investment strategy since you cannot invest unless you save. Instead of following a strict saving regime, most women end up saving only the funds left over from their monthly expenses. This can eat away at your investment potential. Therefore, it is essential to draw up a personalised budget to better understand your income and expenses. Once you have a budget, you can follow the 50-30-20 rule, where you keep 50% of your income for expenses, 30% for things you want, and the remaining 20% for savings. Remember that you can always tailor these percentages to suit your needs. At the same time, you can go the extra mile and save a bit more by curbing unnecessary expenses. While you don’t need to compromise on living a queen-sized life, you can curb some impulse spending to ensure you’re aligned to meet your long-term goals.

Idle savings is a workshop for financial disaster

The next financial planning tip for women is simply an extension of the previous tip. Extra funds in your bank account don’t bring you any closer to your goals. Make sure you invest them in lucrative investment avenues to help your money earn more money. When it comes to investments, you can choose where you wish to park your funds. From large-cap stocks to gold and real estate, you can choose from different asset classes based on your risk appetite, return expectations, and goals. Women aware of smart investments know the value of a well-diversified portfolio. Spread your investment across different asset classes, including equities, mutual funds, fixed deposits, and government schemes like PPF and NPS. Build a portfolio with ample risk-to-reward balance to optimise returns while hedging excess risks.

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Manage your debt

Debt management is an essential financial planning tip for women. We live in an era of credit cards, where a simple swipe gets you what you want without a penny being debited from your account. However, credit cards and the allure of deferred payment can encourage overspending. If you love to shop with credit cards, credit card debt can have a crippling impact on your finances. However, credit cards are not the only type of debt women have to consider. Your debts may include an education loan you availed to study abroad, a home loan you took to buy a home for your parents, or a personal loan you availed to finance your sister’s wedding. When it comes to credit cards, it is important to recognise and curb unnecessary spending. Various smartphone budgeting apps now help minimise expenses and send reminders to ensure no missed payments. With long-term debt, like home loans, you must factor your EMIs into your budget as non-negotiable monthly expenses before you start investing.

Life insurance (Be insured, be certain!)

No one can predict life’s course, and therefore, planning for the future must ensure investing in a good safety net. That’s why financial planning tips for women also include guidance on insurance planning. Life insurance policies act as a financial safety net for your loved ones. Many women act as the sole breadwinners for their dependent siblings and ageing parents. The life insurance payout keeps your family financially secure in your absence, offering you peace of mind. In fact, investing in a life insurance policy should be one of the first investments you make once you start earning. Starting your life insurance policy early ensures low premium costs, helping you save more and invest more in other avenues. From pure-term life plans to endowment plans that come with a market-linked return benefit–you will find several different types of life insurance products available on the market. Choose your plan wisely to ensure you have adequate coverage.

Pro tip: Once you have invested in a life insurance plan, don’t forget to get health insurance coverage as well!

Tax savings are important

Tax planning is a crucial financial planning tip for women, especially working women. Remember that you can save a ton on taxes if you simply invest wisely. Investment options like ELSS, PPF,  ULIPs, NSC, and term life plans can help you lower your outstanding tax liabilities while earning returns. By investing in tax-efficient investment instruments, you can claim tax deductions of up to Rs. 1.50 lakhs u/s 80(C) every fiscal year. Therefore, make sure to factor in tax planning as a key criterion when plotting your financial journey.

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Why should you plan your financial future?

Financial literacy and planning are crucial for women, regardless of their marital status. For centuries, women have mastered the art of saving. Now, all that’s left is to invest these savings wisely. With the financial planning tips for women outlined above, you can learn to do so and streamline your strategy to achieve your goals on time. Remember that the key to a successful financial plan is starting early and investing wisely.