Too busy playing multiple roles and don’t have time to read this in full? Here’s a quick summary:
– As women, we should take care of our finances just as we would our physical appearance with a rigorous skincare or workout routine! This will secure your independence and allow you to pamper yourself at any stage in life.
– Make sure to track your expenses, invest to grow your money, leverage on digital tools and insure yourself and your family against unforeseen events.
CHALLENGES FACED BY THE MODERN WOMAN
The modern woman is expected to play several roles-caring partner, loving mother, selfless caregiver, a capable employee and empowering boss. She not only has to break the glass ceiling, but also take care of her family.
With so many responsibilities, it may be challenging to think about personal finances. But financial independence is not just about how much money or assets you have accumulated.
It is about making smart money decisions to secure the lifestyle you want in the future.
WHY IT IS IMPORTANT TO TAKE CHARGE OF YOUR FINANCES
If you’re not already convinced, here are some other reasons to take your finances seriously.
1. You need to treat yourself
Being self-sufficient can bear many fruits. This applies to both single and married women.
Having full control of your finances allows you to pamper yourself, splurge on the occasional luxury item, go for fine-dining experience, or relax on a well-deserved spa/staycation. It can also enable you to support your elderly parents or donate to a meaningful cause.
2. Your financial behaviour impacts others
Managing your money well can have a positive impact on your friends, kids and those around you. Children learn by example, friends may feel inspired and influenced too over casual dinner conversations.
So by being financially responsible for your own expenses, people around you will learn the importance of managing their own money and being self-sufficient.
HOW TO TAKE CHARGE OF YOUR FINANCES
If you are ready to finally take charge, here are a few handy steps that will help you on your financial journey.
Step 1: Track your earnings vs expenses
The first step to balancing your finances, is to know how much comes in and how much goes out. Review your latest bank statements and track how much income you had for the month, and how much and where your money went. Then you need to come up with a written budget so you can manage both your desired lifestyle and financial goals.
The 50-30-20 Rule is a great way to allocate your money. This rule allocates 50 per cent of your monthly cash on needs, 30 per cent on wants, and 20 per cent as savings.
Your needs include bills such as rent, utilities, Internet and groceries. Wants include things that are nice to have but not very necessary such as shopping or eating out.
For savings, this money would go to your emergency fund and long-term goals like retirement.
Step 2: Make your money work harder
It’s not good enough just to leave your money in a savings account. With low interest rates, and an average inflation rate of 2.50 per cent from 1962 to 2021, inflation will slowly erode the real value of your money over time.
Consider putting your money to work by investing them. Investments take many forms, and it can take the form of company shares, real estate, bonds or unit trusts, depending on your risk tolerance financial situation and financial goals.
If investing seems daunting to you, you might want to consider unit trusts which is managed by a professional fund manager or a team of managers. It is made up of money pooled from multiple investors, and invested in a variety of assets to meet an investment objective.
In addition, you can remove the risk of trying to time the market by setting up a Regular Savings Plan (RSP) and invest a fixed amount every month.
RSP takes advantage of the concept of dollar-cost averaging, enabling you to spread out your investments over a longer period to mitigate timing risks and emotional decision-making.
RSPs generally help investors accumulate their wealth over time and are typically more affordable for those on tight budgets because you can start with a monthly amount of BND100.
And if you’re interested in any specific causes such as environmental or social causes, there are thematic funds that can align to your interests while helping you grow your money. For example, ESG (Environmental, Social and Governance) investing allows you to support businesses committed to driving positive changes in society as well as the environment.
Once your plan is set, use your savings to build up your emergency fund to cover at least three to six months of living costs. This fund will help to cover unexpected expenses such as losing your job or being in a car accident.
Step 3: Insure yourself & your family
We have emphasised the importance of saving and investing. Remember that it is all to help you achieve your financial goals. But all the efforts you place into growing your wealth may be fruitless if you and your family are not properly protected against unforeseen circumstances.
Without proper insurance coverage, hefty bills can place a strain on your finances. It is important to consider private insurance for higher and wider coverage, with some insurance plans provide cash pay-outs when you are hospitalised or unable to work for a prolonged period.
Additionally, do not rely entirely on the insurance provided by your employer as it will no longer be available once you leave the company. As a woman, you wear many different hats – a career professional, a mother, a spouse and/or a caregiver.
Financial independence enables you to pursue an enriched life, without having to make unnecessary sacrifices to make ends meet.
Take charge of your finances by equipping yourself with the right knowledge, tools and resources.
This article is for general information purposes only and whilst the information in it is believed to be reliable, it has not been independently verified by us. You are advised to exercise your own independent judgment with the contents in this article. – Standard Chartered Bank
