3 Best Tips for Women to Manage Personal Finances and Make Money

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Women to Manage Personal Finances and Make Money

GealenaWomen to Manage Personal Finances. Currently, women can occupy the highest office in a country. Such as US Treasury Secretary Janet Yellen, ECB president Christine Lagarde, and Mary Barra of CEO, General Motors, also CEO, Citigroup Jane Fraser.

But when it comes to personal finances, women often fall behind their male counterparts. Where women show less tendency to invest and grow their personal wealth than men.

Lorna Tan, head of financial planning literacy at DBS Bank Singapore, said there were many reasons for this. Among other things, women’s income is still low compared to men.

Women to Manage Personal Finances
picture, Geralt, pixabay.com

Meanwhile, the usually longer life expectancy coupled with the increasing divorce rate makes many women fully responsible for household finances at a later date. “Women need to understand that there are certain factual trends at play. And they need to have a holistic financial plan,” says Lorna Tan.

Women to Manage Personal Finances. Here are 3 ways women can overcome that hurdle and take better control of their money.

1. Build Confidence

Critically, says Tan, women must first grow more confident that they can take control of their personal finances. One study found that women generally devoted more of their finances to savings than men. Yet they invest far less in riskier assets with a potentially greater return.

“Usually this is because they lack self-confidence. But I believe that with better education and understanding, women can be more comfortable managing their finances,” said Tan.

Tan recommends starting by developing a basic understanding of saving and investing through articles and attending free online financial planning webinars. From there, you can go deeper into specific topics and investments that interest you.

However, he said he was cautious because the advice targeted “holistic” financial planning, rather than promoting just one area such as stocks.

2. Make a Plan

Next, map out your financial situation and the personal goals you are working on. Then, think about your financial habits and think about a budget to keep you on track. Tan recommends starting by setting aside at least 10 percent of your income for savings and investment, although he always advocates saving more.

She also advises building an emergency fund with an income of three to five months before working towards a marketable investment benchmark, where 50 percent of your net worth is invested in income-generating assets such as stocks, bonds, and property.

3. Make your money work

Women to Manage Personal Finances. Although women are generally less interested in risky investments, in an environment with low-interest rates, it is important to make sure your money is used. Despite the hustle and bustle around trading platforms and so-called stock memes like GameStop, Tan recommends not going after individual stocks.

“When people timing the market, they usually miss the best days of the market,” said Tan.

Instead, he suggests starting to invest in an available, low-cost managed portfolio. It comes with different levels of risk which you can change over time as your risk tolerance changes.

Such investments are best made in small, regular increments, a method known as dollar-cost averaging, which reduces the effects of market volatility. Meanwhile, keeping your money invested means that you can benefit from compound interest, where your returns are reinvested to increase your profits.

“If you are young, look at the magic of compound investing,” She said.

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