Financial habits of Successful Women
Behind every successful woman are their financial practices that they strictly abide by to sustain and grow financially. These habits keep their portfolio healthy and in line with their life goals.
Let’s look at some of these habits that you must inculcate to stay on top of your finances-
#1 Set Financial goals & plan
First and foremost, it's important to set financial goals & have a fool-proof action plan to achieve them.
Goals can be short-term, like what you want to attain at the end of the year, or long-term defining goals for the next decade. What’s more important is for you to plan out how you are going to reach them.
Remember that nothing is unachievable in life so don’t short sell yourself while writing down your financial goals.The sky's the limit.
#2 Protect your credit
Most women are scared to use credit cards because of the persisting myths about credit cards. But there’s always another side to the same coin. There are many advantages of using credit cards these days. Firstly, credit cards often offer rewards in the form of discounts, points and cashback..
Next, credit cards help you build a good credit history.Paying bills on time can get you a good credit score which in turn, helps you to seek future credit at lower interest rates.
And lastly, credit cards are safer than other forms of payment in terms of theft. An incorrect transaction on a credit card can be reversed and a claim can be raised. Whereas, in other forms of payment, fraud transactions are more often than not irreversible.
#3 Always make a budget before spending and stick to it.
Women are assumed to be over-spenders and to keep your expenses on track with your set goals, budgeting is important.
Learn your finances. How much do you earn and how much do you have to pay out towards your living expenses, debts and credit card bills? The balance money needs to be then budgeted wisely.
Always make a budget before you go out for a vacation or shopping to avoid impulsive expenditure. Ensure that you are investing enough of your income before you make such expenditures.
#4 Always have a plan to increase your income
Covid19 has taught us that any business can collapse and only the ones with multiple sources of income can survive in hard times. The simple idea is that if you want sustained and steady inflow of money, have more streams of income.
The most common and easy way to have an extra source of income is by putting your money to work in investments.
Nothing is certain, whether you are employed or are a business owner. You never know when having several revenue streams may come in handy.
#5 Don’t be an impulsive buyer
Don’t be an impulsive buyer. Question yourself before buying something. Is this what I need right now or can I do without it? If it is not an immediate necessity, there is no need to buy it.
Just Because You Can Afford It, It Doesn’t Mean You Should Purchase It. Make a proper plan before buying a luxury item in such a way that this expense doesn’t compromise your other expenses.
#6 Start investing early
The earlier you understand the importance and perks of investing, the better the returns will be. Wouldn’t it be better if you could make your money work for you rather than the other way around?
A woman's best friend is what we call the compounding effect. So, compound interest is the concept of your money creating money (interest) and that helps your money grow exponentially! In short, the younger you are when you start the investing process, the better the chances you have of reaching your money goals. We have talked in detail about the power of compounding in our previous blog which will help you better understand the topic.
Power of Compounding
#7 Have an emergency fund and plan for retirement
A sign of a successful woman is that she has a plan for everything. They plan for the worst situation and hope for the best. Your emergency fund acts as a roof on a rainy day. Money that is liquid and accessible in case of mishaps. It may be a layoff, a broken heater, or unforeseen auto repairs. Whatever the situation may be, having some ready cash to fall back on is always a good idea.
Read more in our blog about emergency funds - Importance of Emergency Funds in Falling Markets
Saving and investing are not habits that you should start later in life, they are always more efficient when embarked upon early. We all know the value of money and managing our finances, and yet many of us aren’t paying enough attention to it.
They say behind every successful man there is a woman. I believe behind every successful person there is well-managed finances.
Most successful women didn’t wait for signs to start taking responsibility for their finances, why are you? Take charge of your finances, develop the above habits and live the life you have always dreamed of!
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