Life as a single woman provides the freedom to live on your terms. Along with the freedom, you also have added responsibilities. One of them is that you are solely in charge of giving shape to your life goals. From big purchases like a house, to wish-fulfilment like a foreign trip, you will be funding it all yourself. More importantly, in case of emergencies, you need to ensure that you have a financial back-up. Hence, you must save money to create a financial safety net that you can fall back on, in a crisis.
Besides, there’s no joy greater than achieving your goals with your hard-earned money. If you are unsure about where to start, here are some tips to help you create assets.
Create a budget
A defined budget enables you to save up money for your financial goals. You can follow the 50-30-20 rule of budgeting1 to begin with. Every month, keep aside 50% of income for essentials, 30% for extra expenditure and save the remaining 20% for long-term goals. As emergency fund, keep aside an amount equal to around six to eight months’ expenses.
Track your expenses
Effective financial planning involves being aware of where you are spending your money. List out where and how much you spend throughout the month. You will soon spot expenses that you could avoid.
Limit unnecessary expenses
In case your expenses are going beyond what you planned for, thereby affecting your savings, try to identify the non-essentials that you can spend less on. Cancel subscriptions and memberships that aren’t being used anymore, especially if they renew automatically. The ready funds of credit cards can make you spend beyond your means, piling up interests on outstanding dues. Restrict its use to emergencies and use digital money whenever possible.
Build your wealth and increase your savings
Apart from ensuring the financial safety of loved ones, life insurance plans can also be great investment instruments. They not only help in building your wealth and savings but also help in generating better returns. This will help you save for your life goals systematically while providing a life cover too.
Generate secondary income sources
Increasing your income can help you save more. If you have a hobby, consider turning it into a source of income. The internet offers several options for using your skills to earn. Research freelancing opportunities and earn an income in your free time to boost your savings capacity.
Opt for life insurance
By nature, women meticulously plan finances for meeting future financial needs. However, your family might depend on you financially. Hence, by buying a term plan, you can ensure the financial security of your family members in case of any unfortunate event. ICICI Pru iProtect Smart is one such great choice which provides you with a life cover* of up to ₹ 1 crore for premiums as low as ₹ 490^ per month.
The plan offers additional benefits over and above the life cover of the base term plan through its riders with a nominal increase in the premium. You can opt for a financial cover against critical illnesses specific to women like breast and cervical cancer, along with other critical illnesses as well.
Plan for life after retirement
Did you know that, on an average, women live 6-8 years longer than men2? Thus, you can expect a longer post-retirement life, needing sufficient funds to meet living costs.
Your retirement might seem like a distant event in the future but, starting with retirement savings early gives you greater/multifold returns in the long run.
Apart from fulfilling your dreams or ensuring financial safety and support to your loved ones in case of an unfortunate event, a life insurance plan can also help you plan your retirement well. Creating wealth through plans like ULIPS and endowment plans will help you to accumulate wealth and have a regular flow of income even after retirement.
Managing money smartly can be liberating and empowering. If you take charge of your finances and invest in the right instruments, you can enjoy financial freedom for the rest of your life.