Top 6 Financial Planning Tips for Women: A Guide for the Start of the New Financial Year
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The start of a new financial year provides an excellent opportunity for women to evaluate their financial planning journey and progress. With that in mind, here are six essential tips to help you get started:
Firstly, create a budget that helps you allocate your income towards expenses. You can adopt the 50/30/20 budgeting method to balance non-negotiable and discretionary spending and savings and investments. Break the annual budget down into monthly, quarterly, half-yearly, and yearly expenses.
Secondly, maintain an emergency fund equivalent to at least three months of expenses to handle unexpected situations such as job loss, salary delays, or hospitalization. You can maintain the fund in a separate bank savings account or debt mutual fund.
Thirdly, ensure that the family breadwinner(s) have an adequate term life insurance plan to handle financial liabilities such as home and other loans and financial responsibilities such as the child’s higher education, spouse’s retirement, and family’s monthly expenses.
Fourthly, secure your family’s health by having your own health insurance coverage, even if you have health insurance coverage from your employer. Evaluate your cover amount annually and purchase a top-up plan if required.
Fifthly, goal planning is essential for short-term, medium-term, and long-term goals. Consider investing in fixed-income instruments such as debt funds for short-term goals, hybrid mutual funds for medium-term goals, and equity mutual funds for long-term goals.
Finally, ensure that the investments you make for your financial goals are tax-efficient. Utilize deductions from taxable income under Section 80C, 80D, and other sections of the IT Act, depending on whether you file returns under the old or new income tax regime.
By following these six financial planning tips at the start of the new financial year, women can progress smoothly toward their financial goals.
Re-reported from the story originally published in. Mint Genie
