With cash flows likely fluctuate for most working women, it is important to start early and save more.
Shreya, a 26-year-old techie, moved to Bangalore to join an IT company two years ago. Living on her own, going out with friends and merry-making aplenty left her with little money to invest.
Today, newly-married Shreya regrets that she didn’t save any money from the initial years of her career. Looking back she says, “I now realise how important it is to strike a balance between savings and spending. Its good to have fun, but saving for the future is essential too.”
The sudden flush of money, when you just start working, may tempt you to spend freely on luxuries.
But here are three factors that working women must keep in mind in planning their finances.
Do it yourself
Women may need to save more than men in the early part of their career. This is because there are chances that their cash flows may fluctuate during the initial stages of their professional career.
Many women choose to make a career shift or take a break soon after marriage. That may interrupt their income or cash flows.
This is why it is best to fight those battles with shopping urges early in your career. Early investments also deliver immense benefits from the power of compounding.
This can also help you enjoy the liberty of pursuing your other hobbies full-time, without the worry about financial security.
Also choose to manage your money yourself. Being on your own will help plan your finances better and instil financial discipline.
Stick to instruments and assets that you understand thoroughly and which suit your risk appetite.
If your broker-friend insists that you open a broking account and invest directly in stocks, don’t give in to such pressure unless you are convinced of it.
No big-ticket liability
Apart from avoiding instruments you don’t understand, there are other important no-no’s.
Refrain from taking up any long-term financial commitment during the initial years of your career. It may be prudent not to take up a big-ticket liability such as housing loan.
It could hinder your ability to save anything at all, robbing you of the benefits of saving early. It could also land you in trouble if your cash flows dry up for whatever reason.
Avoiding large liabilities can also make it easier for you to relocate for a better job or marriage.
If you had purchased a home in Hyderabad and if your job warrants you to relocate to Bangalore, finding a tenant or disposing of your house may not be an easy proposition.
Not taking a long term loan can also give you freedom to choose a more flexible career option - say work-from-home. .
Lastly, when choosing between investments, give liquidity top priority.
Locking all your money into gold jewellery for instance, may prove problematic.
Liquidity is key
Liquidating it to meet contingencies may not be easy as jewellery seldom allows you to cash in at full value. Plots of land too can prove similarly tricky, as they cannot be sold at short notice. In illiquid options, you may also wind up losing a portion of the gains made. For instance, if you think gold to be a good investment opportunity, go for ETFs instead of the physical goods.
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