3 financial things every young woman should do

Nutan Gupta

03 Jul 2017

New Page 1

In today’s day and age, where women are seeking empowerment in every field, it also makes sense for women to take control of their own finances. Women are no strangers to handling finances, as they were the ones who managed all household expenditures in the earlier days. Better education, improvement in social attitude, entry of MNC’s in India are some of the reasons why the woman of today can be said to be empowered.

Women today have access to world-class education, because of which they are also able to scale up the corporate ladder or maybe even create a million-dollar business. When one is earning money, it is very important for one to be able to manage the money.

Management of money isn’t something that is gender specific – everyone needs to know how to manage basic stuff under money management, such as saving, investing, budgeting, allocating etc. Money management is something that doesn’t seem very easy, but at its core, it embodies certain simple things that one should follow. Here are three financial things every young woman must keep in mind.

The budgeting should come first:

Management of one’s money starts with management of the income itself. Ideally, the income needs to be divided for various things you need. In other words, you should allocate parts of the total income for various expenses like rent & electricity, transportation, saving, investments etc.

Money management is all about being able to set your priorities straight when it comes to money. For instance, a young woman who is fresh out of college lands a job. The job pays her well, say Rs. 30,000 a month. Now, because this young lady doesn’t manage her money well, she is out of money by the 25th of the month. What happened there? Where did all that money go? This wouldn’t have happened if she had set her priorities straight and allocated parts of her income to various needs.

Saving is not enough, you need to invest:

Women should educate themselves about investing. They should learn about various investment option available in the market not let just man of their life make their investment decisions.

Also, it is important to invest your money that you saved so as to grow it. There is one golden rule when it comes to investments – the power of compounding. Compounding investments leads to high return on investments. This is one of the incentives to start saving and then, investing it as soon as possible.

Take care of your finances even if you are not working:

Most likely, women have to leave their jobs due to the personal commitment like marriage, children, or taking care of family. In that case, it does not mean that women should stop thinking about finances. Even they need to save enough so that they spend it on educating themselves to join back the workforce in later years of life.

The Bottom Line:

Money management is necessary for both a pleasant present and a laid back, relaxed future. A well-planned investment scheme can be very useful, especially for young women. The money can be used for a lot of things, such as self-financing an extravagant wedding, or taking that expensive course in a foreign university. An early start in getting disciplined in money matters is all that you need in order to be successful.

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mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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3 financial things every young woman should do

Nutan Gupta

03 Jul 2017

New Page 1

In today’s day and age, where women are seeking empowerment in every field, it also makes sense for women to take control of their own finances. Women are no strangers to handling finances, as they were the ones who managed all household expenditures in the earlier days. Better education, improvement in social attitude, entry of MNC’s in India are some of the reasons why the woman of today can be said to be empowered.

Women today have access to world-class education, because of which they are also able to scale up the corporate ladder or maybe even create a million-dollar business. When one is earning money, it is very important for one to be able to manage the money.

Management of money isn’t something that is gender specific – everyone needs to know how to manage basic stuff under money management, such as saving, investing, budgeting, allocating etc. Money management is something that doesn’t seem very easy, but at its core, it embodies certain simple things that one should follow. Here are three financial things every young woman must keep in mind.

The budgeting should come first:

Management of one’s money starts with management of the income itself. Ideally, the income needs to be divided for various things you need. In other words, you should allocate parts of the total income for various expenses like rent & electricity, transportation, saving, investments etc.

Money management is all about being able to set your priorities straight when it comes to money. For instance, a young woman who is fresh out of college lands a job. The job pays her well, say Rs. 30,000 a month. Now, because this young lady doesn’t manage her money well, she is out of money by the 25th of the month. What happened there? Where did all that money go? This wouldn’t have happened if she had set her priorities straight and allocated parts of her income to various needs.

Saving is not enough, you need to invest:

Women should educate themselves about investing. They should learn about various investment option available in the market not let just man of their life make their investment decisions.

Also, it is important to invest your money that you saved so as to grow it. There is one golden rule when it comes to investments – the power of compounding. Compounding investments leads to high return on investments. This is one of the incentives to start saving and then, investing it as soon as possible.

Take care of your finances even if you are not working:

Most likely, women have to leave their jobs due to the personal commitment like marriage, children, or taking care of family. In that case, it does not mean that women should stop thinking about finances. Even they need to save enough so that they spend it on educating themselves to join back the workforce in later years of life.

The Bottom Line:

Money management is necessary for both a pleasant present and a laid back, relaxed future. A well-planned investment scheme can be very useful, especially for young women. The money can be used for a lot of things, such as self-financing an extravagant wedding, or taking that expensive course in a foreign university. An early start in getting disciplined in money matters is all that you need in order to be successful.

Have Referral Code?