Five financial hacks that every woman in her 30s needs to know

Compulsory savings for retirement:

Compulsory savings for retirement should be made from the monthly income, by transferring around 20 percent of the income to a separate bank account from where investment could be made.

The general structure of investing through a mutual fund, with higher allocation towards equities, would work well to build a large corpus for retirement as the power of compounding plays its part.

Talking to a financial planner at this stage would help a lot as he or she would chart a written financial plan that can act as the financial roadmap to wealth creation.

Multiple credit cards:

Multiple credit cards are a new norm of the modern woman, which helps in ease of transaction and sometimes unknowingly push them towards a mountain of debt.

It is advisable to possess credit cards that offer various rewards points and cash backs, which subsequently can be redeemed for movie tickets, hotel bookings and flights tickets.

Any unwanted high-interest debt, like a credit card debt, if already accumulated, should be paid off as a priority or should be refinanced with loans at a lower interest rate.

Paying for shopping or dining out or vacations if mostly done through cash/debit card actually helps in limiting unwanted expenses.

Cutting out on at least two dining out plans:

Cutting out on at least two dining out plans in a month may seem like an awful idea, but it can be supplemented by cooking at home or throwing a house party thus bringing down the cost and shoring up savings.

Money saved is money earned and it can be transferred to a liquid mutual fund immediately or used for incremental investment.

Shopping:

Go slow when it comes to shopping for clothes and shoes. Go rational, don’t be an impulsive buyer; buy with a purpose as unutilised items generally fill up the cupboard without a purpose and strain the finances.

Life Insurance and health insurance/investment plans:

Life is unpredictable, but managing finance well isn’t. The importance of life Insurance and health insurance for women in their 30s is an absolute necessity. Empirically it is seen women, in general, live longer than men, which increases the importance of health insurance.

Difficulty in managing money along with a high-pressure working environment, fast-paced social life is what the “Superwoman” in their 30s clearly faces.

To reiterate, the high-cost loans should be paid off, contingency reserve should be built in and protection through insurance is mandatory.

Investment products like mutual funds, equity portfolio management service should be carefully chosen as per the risk profile aided by the financial advisor.

Conclusion:

HWH (health, wealth and happiness) is the most valuable lesson for the superwomen in their 30s. Investing in a regular health care program, investing for the long term to create wealth and living a stress-free life, should be the essence for today’s modern women.

The author is CEO of Karvy Private Wealth.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.