Relationship with money can be one of the trickiest relationships of your life. As we all know, life is very unpredictable, and the COVID-19 pandemic is a case in point. This is why your relationship with money must be fruitful and not a stressful one so that you can save money in case of unforeseen events such as accidents, theft, sudden loss of a job etc. All of this can be harder as a working woman because of a possible salary gap. According to the Monster Salary Index Report, women in India earn 19% less when compared to their male colleagues. In this blog we aim to guide the powerful working woman to create a healthy relationship with money.
#1 Create practical budgets-
The first step to frugal living is to maintain a budget. Try to work backwards and evaluate how much money is required for groceries, rent, bills and entertainment. This helps you allocate your money responsibly. Make use of excel sheets and maintain them religiously. It is not just enough if you maintain budgets, but ensure they are practical. If your salary is Rs.30,000 but you wish to save Rs.20000 at the very first month is ambitious. It is not impossible but setting unrealistic goals can demotivate if you don’t follow through. Handling money involves practicality and smaller steps, so start saving ideally 20% and work your way up.
#2 Keep track of your expenses-
One of the best money-saving tips is to keep track of your expenses. Initially, it may be difficult, but as you keep logging in daily, it becomes a habit. This also helps you with the first point, on how to allocate your money. Keeping a meticulous record of your expenses can help you understand where you are spending in excess. For example, after maintaining a budget for a year, maybe you will see that a chunk of salary is going into unnecessary expenses like eating out. So, you will look for ways to save money such as eating simple home-cooked meals and order less. Keeping track of your expenses also holds you accountable, which is imperative to building your relationship with money.
#3 Emergency funding-
Emergency funding is an important aspect of living frugally. The very essence of saving money is to increase your security. As a woman making investments in gold can be very clever as it is a wearable asset that can also be monetized in the case of emergencies. For example, gold loans are supremely useful during emergencies. Gold can be pledged with banks or NBFC where they will first evaluate your gold and provide a loan amount against the collateral at low interest rates.
Gold loans have faster processing time with minimal documents needed, so availing a gold loan can be hassle free. You can also get a line of credit against gold which works like a credit card. Pledge the gold once and get a credit line against it. This can be used to withdraw money within that limit anytime you require. You will have to pay an interest rate only for the amount withdrawn. You can avail this useful service from Rupeek’s overdraft facility called Rupeek Quick.Thus you can avail credit for emergency funding even when your gold is safely kept in gold lockers.
Rupeek gives instant gold loans at low-interest rates, these loans can be availed in just 24 hours. Gold loan companies like Rupeek also offer door-step loan services so that you don’t have to travel during a pandemic. Investing in such assets brings a sense of security and accomplishment. This keeps you motivated to save further and strengthen your relationship with money.
Loans against credit cards are also a handy option for emergency funding if you don’t have jewelry to pledge. It is an unsecured loan and comes with a fixed interest rate for a set period of time. You must be a credit card holder to avail this loan. Your credit score and credit history is a deciding factor in loan sanctioning as there is no collateral for surety.
#4 Envision a retirement plan-
Inspiration comes from anywhere. So envision your future self after retirement to motivate you to save judiciously. Where do you see yourself at the age of 65? Visualizing your end goal can help work on your relationship with money. Especially if you have kids, you would probably want to see them married happily, and you, growing old with your partner. Retirement planning apart from giving you peace of mind can give you tax benefits in the future. It enables you to see if your financial objectives help you reach the main goal. Retirement planning is one of the best money-saving tips for a working woman.
#5 Try your best to avoid debt
Credit cards can become your biggest obstacle while strengthening your relationship with money. Try to avoid any kind of debt, even if it means borrowing from your friend or parent. Tiny loans may seem small and negligible at the beginning but the amount can become large due to interest rates and affect credit profile badly. For example, if you want to buy the latest iPhone, instead of buying it on EMI, you can save up a little every month and buy it after. Similarly, if you find yourself not in the best financial position, then politely decline plans of going out or other social activities. This way you will avoid being in debt which is key to frugal living. Evaluate your debt-income ratio and make necessary adjustments to help you pay off the loans faster.
#6 Don’t beat yourself up
Although you need to hold yourself accountable, you need not punish yourself. All of us make mistakes, but make sure to recognize them at the early stage so that you can put out fires. Occasional ice creams, a night out with your besties, an expensive dress and dream vacations also are important to frugal living. It is important to seize the moment and have fun. So if you do happen to derail, seek advice from financial advisors, trustworthy friends and within no time your relationship will be solid.
Here are some more creative ways to save money:
- Save Rs. 100 a week and work your way up every week (For example, you could increase it by 25 or 50% every week)
- Have a jar for loose change- drop your coins in the jar. They become full in no time
- Use public transport or walk whenever you can
- Sell your old stuff online
- Visit libraries instead of purchasing books
- Don’t spend money on cable but invest in OTT platforms
- Photograph your bills and receipts
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