Financial planning is a step-by-step process for achieving your life goals through effective money management. A financial plan serves as a road map as you travel through life.
Essentially, it helps you keep control over your income, expenses, and investments so you can manage your finances and reach your goal.
Financial planning is extremely important for every individual, regardless of whether they are male or female. It is a little more important that women know how to manage money and learn to save, invest and spend it carefully.
How does it play an important role in keeping your mental health?
Financial problems are one of the main causes of stress or mental health problems for an individual. The quality of a person’s life totally depends on the money decisions they make.
Therefore, it is wise to make wise decisions regarding your hard-earned money and not let this important aspect ruin your peace of mind and health.
Financial planning, money management and investments have traditionally been male-dominated and male-oriented. Women have not been encouraged to actively manage money as the ecosystem has predominantly targeted men.
Therefore, a step toward learning and taking charge of your money can bring a lot of clarity and positivity into your life. It also builds confidence and provides peace of mind.
Women are natural managers of money. When armed with the right attributes of being risk-aware, disciplined, making informed decisions, and staying calm under stress, women can go from managing household budgets to being savvy investors.
What can you do to lead a stress-free life?
Effective money management relieves stress, worry, and insecurity, allowing you to enjoy every moment of your life.
1) Create a budget so you don’t end up making impulse purchases.
2) Save regularly to avoid living paycheck to paycheck.
3) Strive for more than one source of income: Multiple sources of income protect you from a financial crisis and provide a flow of money for investments.
4) Having a fair understanding of where your money is going and gaining insight into the financial instruments in your portfolio will help you assess risk and reward scenarios. This will help you avoid unwanted risks and have a peaceful sleep.
5) Set financial goals and start investing.
6) Create an emergency fund to build a mattress to protect you and your family against any contingency. It can be equal to 6–8 months of your monthly expenses.
7) Build a retirement fund – Your expenses will continue but your income will stop, so you’ll need a good financial cushion to support yourself through the retirement of your dreams and ensure you live independently during your retirement years.
8) Manage your debts effectively and borrow based on your affordability.
9) Prioritize health and term insurance: Uncertainties don’t knock on the door, they are sudden and disruptive, emotionally and financially! Our study indicated that 58% of women do not have health or life insurance in their name. So cover yourself and your loved ones with health and life insurance to ensure your family’s financial stability!
10) If managing money seems overwhelming at first, talk to other women, let the experts guide you, and take baby steps. But the most important thing is to start the journey so you can get used to driving it.
11) Financial planning is a family strategy: have regular meetings with your family to discuss financial matters to make sure everyone is informed and there is no stress should the need arise.
Good financial health leads to good mental health!
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