Women's Day Special: Ladies, here's how you can plan your finances at every age

This Women’s Day, here is brief introduction to the right way of approaching money matters at various ages to ensure your fiscal resources are in order and you can build a robust corpus for your use today and tomorrow.

Mumbai: Financial planning isn’t about allocating random amounts to various investments. Your financial health can take a beating if not planned prudently and constantly revised to suit your needs.

This Women’s Day, here is brief introduction to the right way of approaching money matters at various ages to ensure your fiscal resources are in order and you can build a robust corpus for your use today and tomorrow.

From your 20's to your 30's

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1. Get used to budgeting. Pay attention to your income and expenses and start thinking of your goals
2. Apart from a decent salary, make sure that your initial jobs also offer Employees’ Provident Fund. This way you start saving for your retirement by default and enjoy the compounding benefits throughout your career. Level up your retirement savings by exploring other options like PPF and mutual funds
3. Start, maintain, and enhance your emergency fund as your salary and responsibilities increase. Use your bonus and pay hikes with care to build this corpus or use them to invest in safe instruments
4. If you have education loans to repay, start paying your EMIs from your income without any delay
5. Apply for a credit card or two and pay your bills in full and on time to build your credit score and prove your credit worthiness
6. Consider getting your financial planning done as early as possible. Seek professional financial help if necessary
7. Consider investing in property to strengthen your net worth. As a woman, you can get a home loan easily, and take advantage of the interest subsidy offered via PMAY. You can also benefit from lower interest rates and stamp duty concessions offered by certain states
8. Irrespective of your savings and expenses, invest fair amounts towards various goals like taking a vacation, contributing to your wedding expenses, and saving for your kid’s education
9. Diversify your investment portfolio as per your risk tolerance. Don’t hesitate to expose your funds to equities to gain capital appreciation. If you’re not well-versed with markets, you may take the SIP route to maximise returns and minimise risks
10. For the debt portion of your portfolio, start a PPF account and invest regularly for 15 years. Use the maturity proceeds to achieve long-term goals like repayment of home loan, meeting medical expenses or just adding to your retirement corpus
11. Insure your life, health and assets to protect your loved ones and prevent untoward events from draining your savings

From your 40's to your 50's

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1. If you have taken any loans, continue repaying your loans on time. In case of increasing credit costs, consider refinancing your loans with lenders offering lower interest rates. Plan to get out of debt well before retirement
2. If you have sufficient income via salary and investment returns, consider prepaying or foreclosing loans
3. Though you may have financial responsibilities towards your parents and children, don’t compromise on your retirement. Make the most of your peak earning years and focus on your retirement savings and in bolstering your emergency fund
4. Learn from past investment mistakes and revisit your portfolio to make necessary changes
5. Reinvest the investment maturity proceeds by recalculating your risk tolerance and evaluating your needs
6. Draw up a will and don’t forget to add beneficiaries to all accounts and investments. This will make sure that your money goes in the right hands should something happen to you

In your 60's and above

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1. Now is the time to manage all your savings to ensure that you receive a regular source of income to meet your retirement expenses
2. If you abide by all the above tips, you shouldn’t face any major financial issues. In case you face any, downsize your living standards. Shift into a smaller home or consider staying with your children. You can also sell your home or pledge it in a reverse mortgage arrangement to bridge the financial gap
3. Give a final look at your will
4. The way to financial freedom may seem challenging but is totally worth it! With these tips, you can plan your finances at every stage of life and work towards financial and emotional well-being

(Written by Adhil Shetty, CEO, BankBazaar.com)