In today’s era, everyone should be financially independent. Then whether it is male or female. People feel that financial freedom is only meant to earn big bucks, but this is not true. To remain financially independent throughout your life, you need financial planning, investment and management. This is even more important if you are a young woman. Every young woman needs to know that financial freedom comes from good education, sound financial planning and smart investment. To maintain your financial freedom and to maintain it for a long time you need to focus on three things-
1. Quality Higher Education
Higher education is necessary for employment in the organized sector of the economy and for earning a stable and high income. Therefore, women should invest in college education and try their best to study in a quality education institution to start their career. Financial Literacy is required to manage your finance. Without basic education and elementary knowledge, it would be difficult to do finance management. Because of this, a young woman needs to educate herself about basic financial management.
2. Financial Planning
First of all, you have to be clear about your financial goals, whether it is for children’s education or post-retirement lifestyle. It is very important to keep inflation in mind while doing financial planning. If you want, you can consult a qualified financial planner, but it is also important to do research at your level. You can go to authentic websites to get information about financial instruments.
Keep in mind that one should not get confused about choosing the same financial planning that other people are choosing. You need to choose your customized financial plan according to your risk appetite, financial goals and needs of different stages of life. Apart from a realistic assessment of your financial goals, you also have to plan for unexpected crisis situations like divorce, death, etc. It is important that you maintain financial freedom even in the unfortunate case of unexpected tragedy or crisis.
If you have just started your career, then you have to start investing for both short term and long term goals. You need to make sure that you do not have to borrow excessively to invest in the instruments that you are choosing to invest. For smart investment, you have to make sure that the risk is divided between different instruments. A high-risk volatile instrument such as bonds to replenish equities should be a stable income source in your portfolio. Your investment fund should be a judicious combination of equity, debt, life insurance, real estate etc.
Equity is a good investment option. It would be even smarter to select equity mutual funds (EMFs) through a systematic investment plan (SIP) for long-term needs such as planning for retirement finance. You should also invest in a good health insurance plan, even if you are young, health issues can also come at a young age. To be prepared for emergencies, you should also invest in creating liquid funds.
To meet your short-term needs, it is advisable to invest in options like FDs, post office deposits, debt funds and fixed maturity plans (FMPs). Another good way is to periodically transfer it to FD or Recurring Deposit once the savings account exceeds a specific limit. Also, keep in mind that you earn more profit by saving liquidity for emergencies.
Article By: Prabhakar Tiwari, CMO, Angel Broking