Perhaps the primary reason 30s are often thought of as a death warrant to having a carefree life is all the financial responsibilities that come with it. For instance, just a couple of years ago you could rush to Sarojini Nagar and pick multiple dresses without a care in the world, followed by a hearty meal, but now, not so much. Somehow, 30s come pre-installed with all the worry of the future. Is buying that dress a good idea now, when you can save those extra bucks for your contingency fund? Should you buy that expensive phone, when you can put more than half of it in your retirement fund and still manage to buy an equally good phone?
Responsibilities may suddenly feel like a burden. However, financial planning is the only way one can plan for their present as well as future expenses.
Here are some financial tips, especially if you are a working woman in your thirties:Re-allocate your budget
It's time to re-think your budgetary allocations. Budgets that are followed in late twenties needs to be altered keeping in mind future expenses such as buying a house or accumulating capital for a business idea that you always wished to start, or marriage. Rethinking spending on the latest gadgets or home decor products is a good idea for now. Instead, channelise spare money to fulfil your financial goals.Increase insurance cover
Insurance provides much needed financial security for your dependents, who could be your ageing parents or your children. With time one should increase their insurance cover so as to cover all their dependents. Also buying insurance early in life would be cheaper as compared to buying it later in life. Ideally the insurance cover should be 10 times your annual income. Additionally, women also get insurance at cheaper rates as compared to men because women have higher life expectancy rates. For instance, premium for a 31-year-old male and a 34-year-old female would almost be equal!
Pay off debtPay off debts that drain away your income in the form of monthly EMIs. Paying off such debts would also result in lesser interest being paid and prevent the huge hole in your purse.
Build contingency fundThinking ahead of hard times such as loss of job or immediate medical treatments and creating a contingency fund is one way of ensuring financial stability. Ideally one should have six months living expenses as contingency fund. Start building such a fund and keep it in a separate account to maintain liquidity. So you can withdraw this money immediately in case of an emergency.
Invest a portion of income for retirementYou would not want to consume your time during retirement thinking of ways to keep the money coming. The best way is to plan early. Start by investing some part of your income to fund your retirement. We often miss factoring in inflation while thinking of retirement. Consider inflation and you would realise how expensive retirement would be. As a woman, you'll also need a bigger retirement corpus than men, as women have higher life expectancy. Moreover their number of years worked is also less as compared to men. You can start by investing in retirement plans provided by various mutual fund houses and gradually increase the amount of SIP with an increase in income.
Take calculative risk while investingInvestment is the only way to create wealth through small investments over-time. Do not fall for ponzi schemes which offer high returns in a very short time span. For those lured by quick gains, follow what Warren Buffett has say - "When promised with quick profits, respond with a quick 'no'." Also, remember to invest by diversifying your portfolio. This would minimise risk.
Create assets not liabilitiesIn present times, it is very easy to secure credit. Limit your borrowing. Do not create liabilities for yourself that you would end up paying high interests for. If you have been planning to buy that pure leather purse for a while now, avoid paying for in credit. Instead focus your income towards creating assets which appreciate/hold their value in future such as a house. Did you know many banks offer lesser interest rates on home loan to women? Moreover, many state governments also offer concession on stamp duty of up to 2 per cent for women.
Discuss your financial position with your partnerIf you are married, discuss your finances with your partner in detail. This would help both of you manage your income and expenditure better. Discuss your financial goals and timeline to accomplish them. Take collective financial decisions.
Regularly review your portfolio of investmentsIt is very crucial to review your portfolio of investments from time to time to ensure best returns. Review your portfolio at least once every quarter. Don't panic if the fund you invested in does not give you high returns in the first few months of investment. Give at least a year for mutual funds to grow your invested money.
Avail benefit from government schemesNot only yourself, you can also plan for ahead for your daughter. Sukanya Samridhi Yojna was launched specifically for the welfare of the girl child. You can deposit a maximum of Rs 1,50,000 per year while earning a fixed return of 8.60 per cent with triple tax exemption benefits under secitin 80C i.e. there will be no tax on the amount invested, amount earned as interest and amount withdrawn.