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My Journey And Lessons From Personal Finance

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My Journey And Lessons From Personal Finance

Author Shikha Dhanuka
Published May 9, 2021
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Reading Time: 4 minutes

A rupee saved is a rupee earned.

Not unlike any other typical Indian household, savings was an undebatable topic in mine and my pleas to get a new Walkman, or go on a school trip were heard, only if the budget permitted. I can safely say that my journey into personal finance began early.

When I talk to elders, I realise how far we have come as a society when it comes to money management. Earlier only men would make the investment decisions; the women were merely responsible for running the household on the stipulated budget. Well, they did do a marvelous job while at it.

With changing times, more and more women started to enter the world of money and employment. Along with the jobs, came money and the confidence to make informed financial decisions. Today, women are at par with men and have transitioned from saving to investing. 

From my own working experiences in the financial space, I can say I have learnt a lot. I have also realized that women are equally capable of making sound financial decisions, unlike previously preached. I have come across women who are skilled at investing in stocks, contrary to popular opinion that it’s a man’s arena.

Here are a few tips and tricks that I bring from my personal journey with money, for those who are struggling to find their feet in the world of finance and who would like to take money matters into their own hands.

Build Financial Discipline.

As a child, my mother would insist that I save a portion of my pocket money, or money received during birthdays, festivals in the piggy banks. As much as I hated it then, I can’t thank her enough today. It has instilled a savings-inclined mentality that has led me to my financial independence.

The very first step in personal finance is to be able to save a portion of your salary. Experts peg this number at 30% of your monthly income. You may find it challenging, but the practice of saving before spending can get you there. All you need is some will-power and the strength to make lifestyle adjustments. You can start gradually and work your way up.

Alternatively, you can transfer a designated amount to a different bank account if you would like to maintain liquidity. Also, consider the option of recurring deposits that require you to add a pre-decided amount every month.

With Money, You Can Grow More Money.

Letting your money sit idle in your savings account is not going to accumulate into wealth. The whole point of saving is to ascertain security for your future self. In the absence of a pension, you will need a steady source of money to maintain your lifestyle. 

The magic word here is investments. When you invest your money, you allow it to grow by manifolds. Did you know that every single rupee you save today can turn into a hundred after a decade? Of course, it will depend upon the investment tool that you go with. 

You can choose to explore multiple investment instruments like the stock market, mutual funds, deposits, bonds and gold etc.

Spread Your Risk.

When it comes to investments, it is not advisable to lay all your eggs in one basket. That is, instead of putting all your money into one bucket, use multiple options to optimise your returns. 

Diversification is a strategy that will protect your interests.

In the world of finance, risk is a function of an individual’s personality. If you are someone who is content with slow and steady returns, you can consider fixed deposits and bonds. However, if you are comfortable with uncertainty and losing money, but with a possibility of much greater returns, you can consider stocks. In the long run, stocks tend to give good ROI, but patience is key.

Work Out A Financial Plan.

The answer to how much you need to save, invest and accumulate, depends on your financial goals. You can divide them into short-term and long-term goals, for clarity. The former will comprise what you want to achieve for yourself or your family in the next couple of years. For instance, buying a luxury watch or throwing a lavish 60th birthday party for your father.

Your long-term goals are what you would want to accomplish in the long run, in say 10 or 20 years. Buying a house is the most relatable example of a long-term financial objective.

With these goals, you will know how much you need to save and invest today.

Always have an Emergency Fund.

Life is full of ups and downs, and it is the challenging situations that can test your financial independence. For instance, a health emergency can stress you financially, or the loss of your job can throw you off the rails. 

In such scenarios, your emergency fund can be your saviour. In simple terms, it is a fund that you keep to manage your tough times. Most experts say that you should have at least 3-6 months of your monthly income in your emergency fund. 

Don’t worry if you hadn’t thought of this before. It is never too late to start. 

In Conclusion.

Being nurturers, women have a natural instinct to protect their families. It is also the reason they can make smart money decisions for their own wellbeing. With the information shared above, it’s important to understand your own financial goals and plan accordingly. All you need is a little confidence! You can do it!

Author

  • Pujit Bhutoria

    Writing for Windmill Capital in an attempt to make investing as simple as it is.

    View all posts

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Shikha Dhanuka

Walking on sunshine!

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