This Women’s Day, seek financial freedom – Here are 5 steps to march towards it

Updated: March 08, 2021 1:45 PM

Arguably, women are better fund managers. This is because of their inherent discipline, objectivity, and eye for details.

Building wealth is essential to earn financial freedom.

Literally, economics means home management. And micro-economics is the heart of economics. It not only owes its origin to household management but in essence it is about that. Though the landscape is changing, homes are managed largely by women. Their fund managing skills never put family under scarcity, barring crises.

Arguably, women are better fund managers. This is because of their inherent discipline, objectivity, and eye for details. Women are naturally better at budgeting and allocation of resources. This naturalness is their ‘specific knowledge’. It deserves to be broadened and ‘leveraged’ to build wealth and earn financial freedom, as said by Naval Ravikant. Technology, particularly internet, has made this leverage accessible to everybody. Building personal wealth is no more the arena of finance professionals with fancy degrees in finance. Internet has made it easy and accessible.

Building wealth is essential to earn financial freedom. This does not mean you have achieved financial freedom once you have stable occupation or profession. It means that income from your reserve funds or savings exceeds income from regular occupation. And you are free to use your time not to earn a living but to do what you wish to. Each one of us should strive for that. I suggest the following five steps to march towards financial freedom:

1. Believe in Yourself – It is entirely possible to build wealth required to achieve your financial goals. You yourself are a better fund manager and you can do it with upgrading of a few skills.

2. Make Your Daily Savings Earn Money – Every woman regularly saves money, whatever be the amount. It is saved from her gifts, bargaining on household purchases, cutting on expenses etc. It is our time-tested and best habit, perhaps. These savings were stored in piggy banks and cupboard corners for long. It is time to take it out and invest. The money, if not invested, loses its value over time. The underlying value commanded by ₹100 now may get reduced in the next 10 years. This can be halted by converting your savings into proper investments so that these savings earn further money.

3. Buy Mutual Funds through SIP – Mutual funds are the safe way to take part in the financial market. Internet provides information required for investments in mutual funds. Investing a large sum at once is not easy for anybody. SIP is really a smart and efficient way to invest your savings in mutual funds. Here, the most important is selection of mutual funds and schemes. You must select this based on time horizon of investments, risk appetite and yield of the scheme.

4. Save for Emergency – We can neither guess nor know when and how emergency might strike us. For instance, the Covid lockdowns had made many families financially helpless, and nobody predicted Covid. The lesson here is we should always be prepared for accidents and emergencies. Preparedness prevents helplessness. The funds reserved for emergency are strictly meant for that. They should not be looked at for any other spends.

5. Check on Your Money Daily – We do collect good daily habits. One such is being in daily touch with the best friend or with mother. Make your money as your best friend and check on it daily. Not because there will be major valuation changes in your investments but to make it a habit. This can be done while walking or taking tea in afternoons. It’s best to check after 4 in afternoon since the stock market closes at 3.45 and in case you are to take a decision, you can base your decision on final value on a particular day. And final value of the day is known after 4 PM.

(By Sujit Bangar, Founder, Taxbuddy.com)

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