Are your finances in a mess? Don’t worry! We’ve curated a MissManage financial starter pack for you to sort out your money matters, check it out:
1. Follow the 50-30-20 rule for life: 50% of your money should go towards necessities, 30% towards luxuries and 20% towards savings. Stick by this rule forever and you’re good to go.
2. Get yourself a Bank account: Once you’ve saved 20% don’t stash the cash at home put it in a bank account because it’s safe and fetches you an interest rate between 4%-6%. There are 4 different types of bank accounts depending on how often you need your money, pick the one that suits you best:
- A savings account: This is a regular bank account which lets you park your money and withdraw it up to a certain limit whenever, wherever. On opening this account you’ll get a debit card which you can use at ATMs for cash withdrawals or you could swipe it at stores & restaurants. Apart from this you’ll also get an interest between 4%-6% on your money. Nowadays all bank accounts comes with instructions on how you can operate your account through your laptop or mobile phone. Read all about it here: Netbanking or Mobile Banking.
- A current account: This one’s used for just parking your money and doesn’t really give an interest. It’s more for businesswomen making monetary transactions on a regular basis. The best feature about these accounts is its overdraft facility which means in case there isn’t enough money in your account and you need to make an urgent payment, the bank gives you credit for that amount. But unlike a loan where you pay an interest on the entire loan amount, here you pay interest only on the amount used.
- A fixed deposit account: This is like a one time piggy bank where you deposit a lump sum of your money and not see it for years to come. Only after the agreed period you can withdraw your money which over time would grow because of the interest accrued on it. The interest on these accounts is slightly higher than a savings account and is anywhere between 6.5%-7.5%.
- A recurring deposit account: This is similar to a fixed deposit, but here instead of a lump sum you deposit money after fixed intervals.
P.S.- For both an FD and an RD withdrawing money before maturity will attract a penalty!
3. Start by investing in Mutual Funds: Bank deposits were a great way for people to park there excess money, but over time people realised that the interest earned on them wasn’t enough in relation to the increasing prices of goods. In financial terms this means bank deposits don’t beat inflation.
That’s why people shifted their money to Mutual Funds– a safe ways to invest your money.
Mutual funds are managed by a group of professional investors who pool the money of many people and invest it on their behalf. It is a secure way to participate in the stock markets or invest elsewhere especially for someone who doesn’t have the time or knowledge to do so.
4. Have the ‘Money’ talk with your Husband/Father: Women often assume money matters to be complex and shun it for the rest of their lives. All it takes is one conversation with the people who handle your money asking them to include you more in such matters. Once you get the hang of it and understand the terms it will become like a regular thing, keeping tabs on your money, keeping tabs on financial news, keeping track of your investments and understanding this not so complicated space that you were so afraid of.
5. Passwords spreadsheet: Now that you’ve your savings in place, your bank account sorted, even your mutual funds figured and you’ve spoken to your family about your interest in managing your money, the next step is to be responsible and save all your passwords in one place. Either store them on a google doc, or on your phone or pen it down. But be discreet about these things: For example if you’re storing your passwords on your phone you could save them as a contact and type your password back words!
6. Sign up for our MissManage newsletter: If keeping track of your finances is complicated, we’ve got your back. Sign up for our weekly newsletter and we’ll break down all the action that’s happening in the economy for you. Once you do that get your friends to sign up because we’re all about girls helping other girls get smart about money.
Make a list of all the above items, and when you achieve them tick them off, you can keep adding more things to this list and make yourself as financially savvy as you can.