There is one aspect where Indian women still need to catch-up it’s managing their finance independently. There is still a dependency, especially among Indian women, on their father or partner to manage their finance, mainly due to the failure to break away from the age old traditions of men taking all the financial decisions.
Like in all other things, women should also take charge and control of their finances and manage it on their own. And, following are the list of basic mistakes they should avoid.
1.Investing too conservatively
A study says more than 70 percent of women surveyed favor a “balanced or conservative” investing approach. Other surveys have found that women have better long-term investment performance than men because they don’t act as rashly. However, investing too conservatively such as keeping a large portion of savings in cash or bonds can hurt your long-term performance.
As you go swiping your credit card, you will keep feeling that you never have enough to call your own and you will never feel the financial strength. There is always a feeling of imbalance and this happens to women because of the imbalance in their emotional and financial strength. The emotional strength is generally much higher than financial strength. Ideally must be equal.
3. Not creating Liquidity
In addition to starting early, you need to have an emergency corpus. Ideally, you should start saving from the day you start working. When you are earning a steady income, it is easier for you to set up a liquidity margin or buffer. All you have to do is save first and spend later. Setting aside a certain amount will help you prepare for unforeseen expenses.
4.Falling for Offers
Generally prevent, else try to refrain as they might be more expensive or just old stuff in different packaging be it insurance or credit cards or anything else. Also don’t forget to look for the fine print. And if you strongly feel about something, just ask the question however silly you may think it might be.
5. Saving instead of Investing
Not only women, but men too misinterpret saving and investment as similar terms. Saving is merely parking your idle money in your bank account, without the motive of generating much return from it. However, investing is when you put your surplus money to use, by parking them investment avenues such as Fixed Deposits, Mutual Funds or PPF. When you invest, instead of being kept idle, your money works for you by generating returns during the investment period. No matter what the investment horizon is, investing enables you to achieve every financial goal, such as building retirement corpus, child’s higher education and marriage, along with your own aspirations like a holiday abroad or owning your own car.
6. Leaving financial decisions on Partner
Many women in India despite earning money are not financially independent. This is because they leave financial decisions entirely on their spouses. As a result; they get no experience in handling their finances or investments. Some women even give their entire salaries to their partners to manage. It is good that you trust your partner but giving your income entirely to your partner leaves you with nothing in the end. If this is not enough, women are not even actively involved in monitoring or handling financial assets of their family. They know nothing about their family assets, or investments.
7. Control Spending
The easy availability of credit these days makes it easy for us to spend the income accruing to us at a later date. Do not go spending limitlessly on items that can be purchased now and be paid for later. Ask yourself if you really need the item, and can you defer this purchase or is it an emergency. Events such as buying a home are exceptions because investing in a house will save you other recurring costs like rent; it is one of the most basic needs. It is a primary need for which mortgaging your future income is justified. But in other cases, think it through and think hard.