My 7 Steps To Ensure I Never Say “I’m Bad At Such Things!” When It Comes To Managing Money

While more and more of Indian women are becoming financially independent, a lot of us are still laid-back when it comes to managing our money.

Many of my (women) friends are extremely talented and successful at their work — analysts, coders, team leads, managers, freelancers, home entrepreneurs; yet, if you ask them how actively they manage their investments, several of them falter. Typical responses vary from “I never studied finance“, “My Dad takes care of it“, “Am bad at such things“, “I started researching a bit but then…” and so on.

I am guilty of this too. Until a couple of years back I used to leave it all to my Dad, bothering myself with these matters only around the time of the year when we needed to submit the 80C investment proofs.

Start with a list

The first step is to list down all your current investments, your salary/equivalent recurring income, and all your ongoing and upcoming (known) expenses. Make a note of all the details such as frequency, maturity date, interest rate etc. since this same list can be used later to organize/set up your monthly financial reviews and reminders (see point 4 below). The benefit of this exercise is that it will immediately give you a high level picture of your financial health and prod you into action.

Avail tax benefits

Make sure that you have made the investments necessary to avail exemption under Section 80 of the IT Act. While many are aware of the 80C deduction of Rs.1.5 lakhs, there are other deductions available too which might be relevant for you.

Build a portfolio/diversify

There is certainly no one-size-fits-all approach to building a financial portfolio. However, at the very least, it’s good to have a mix of investment types. Many women tend to stick to the conventional FDs and some Gold jewellery.

PPF, endowment insurance plans, and mutual funds are options worth considering too, especially for long term investment (>5 years).

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Set up a monthly review

It really helped me to have a fixed date in the first week of every month when I revisit the list (see point 1 above). Thanks to online banking and auto-debit features, most of us are prompt in making utility/card/EMI payments but tend to skip regular monitoring of our investments.

Doing a monthly review helps to evaluate and undertake any renewals of investments and/or reallocation of funds. This exercise is also an excellent way to line up and complete any pending miscellaneous financial chores such as passbook updation, nominee inclusions, IT returns filing and so on.

Start planning for the long term

Most people approach their investment planning from the viewpoint of annual tax saving or participating in the latest investment trends. In fact, jumping uninformed into the latter might be quite detrimental.

Give some thought to the timing and type of milestones/major expenditures you anticipate such as retirement, foreign travel, child’s education and start investing for the same. While these might seem quite distant in the future, from an investment point of view, the earlier you start, the better it is. This way, you can make smaller contributions and also safeguard your money from market volatility/broader economic fluctuations.

Stay informed

Make an effort to research and compare the different types of investment avenues. Financial websites, newspapers, news channels are a good source to read/watch and understand which options would be suitable to your income capacity, risk appetite and long-term needs. If this seems too much, then just talking with some of your friends/colleagues/parents/spouse about how they handle their investments is a good starting point.

Hire help if you need

Lastly, there’s always the option of hiring professional wealth advisors. Even if you do that, it’s wise to stay involved closely and have a thorough understanding of how they are managing your money.

So go ahead and take charge of your financial matters!

Image source: shutterstock

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