As a single woman, taking control of your finances is a crucial step towards achieving financial independence and securing a stable future. The journey to financial freedom may seem daunting, but with the right guidance and strategies, it can be empowering and rewarding. By adopting smart financial habits, you can build a secure future and achieve your long-term goals.
We spoke to Devanshi Bhatt, a cost and management accountant who has first-hand experience in managing her finances. Bhatt shares her advice on saving money, generating secondary income, and building wealth for a financially secure life. “Remember to be patient and consistent in your efforts, as financial success is a journey that requires dedication and discipline. It will empower you to take charge of your economic well-being, ” she advises.
Try to Generate Sources of Secondary Income:
Bhatt emphasises the significance of diversifying income streams, stating, "Having a secondary source of income not only increases your financial stability but also provides a cushion during unexpected events." Utilising your skills and passions can lead to additional income that accelerates your savings and investment goals. She suggests exploring various avenues to earn additional income, such as:
· Freelancing or consulting in your field of expertise
· Starting a small online business or selling handmade crafts
· Participating in the gig economy by offering services like ride-sharing or food delivery
· Renting out a spare room in your home through platforms like Airbnb
Build Your Wealth and Increase Your Savings:
As a cost and management accountant, Bhatt understands the importance of building wealth over time. She says, "Start by setting clear financial goals and creating a budget that allows you to save a portion of your income each month." Create a budget that allocates a portion of your income to savings each month. As your income grows, try to increase the amount you save to accelerate your path to financial freedom. Automating your savings can help you remain disciplined in your approach. "Increasing your savings as your income grows will enable you to build a solid financial foundation for your future," she further adds.
Go for Life Insurance Plans
While it may seem counterintuitive to think about life insurance as a young, single woman, Bhatt recommends it is an essential aspect of financial planning. "Life insurance ensures financial protection for your loved ones in case of unforeseen events," she explains. Term life insurance is a cost-effective option that offers coverage for a specific period, providing peace of mind without burdening your budget. “Research and compare policies to find one that suits your needs and budget.”, she adds.
Increase Your Assets, Reduce Your Liabilities
According to her "Growing your assets and reducing your liabilities is key to building wealth over time." She advises considering investments that appreciate, like stocks, real estate, or retirement accounts. "Simultaneously, strive to pay off high-interest debts, such as credit cards, as quickly as possible," she adds. Reducing debt frees up resources for future investments.
Stay on Top of Your Taxes
Taxes can significantly impact your finances, and single women must be proactive in tax planning. "Understand the tax deductions and credits you qualify for, as they can help reduce your tax burden and increase your disposable income," she advises. Utilise tax software or consult with a professional to maximise your tax benefits and optimise your financial situation.
Plan for Life After Retirement
Though retirement may seem distant, early planning is crucial. "Start contributing to retirement accounts as soon as possible, to benefit from tax advantages and employer contributions" she suggests. The power of compounding over time can lead to substantial savings for your retirement years.
Build an Emergency Fund
"An emergency fund acts as a safety net during unforeseen circumstances," she recommends. Saving at least three to six months' worth of living expenses in an easily accessible account can be helpful. This fund will come in handy for unexpected medical expenses, car repairs, or job loss. "Having an emergency fund will provide peace of mind and protect you from falling into debt during challenging times," she adds.
