10 Facts Every Girl Must Know About Personal Finance

25 November 2022
8 min read
10 Facts Every Girl Must Know About Personal Finance
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Financial independence is something that every girl wishes to achieve on her own. However, this can be achieved if you save money for a rainy day, plan for your future, and manage your finances.

Financial independence means having enough money in your bank account that you no longer need to work to support yourself. It’s a great feeling when you know you can stop working and live off the money you saved, but it can also be overwhelming because so many factors influence how much you can save and invest.

The first thing to keep in mind is the amount of money you have coming in each month. Your income works with your expenses to determine how much you have left over after paying all bills and putting aside a little bit each week for savings (or other goals).

The best way to figure out how much money you need each month is by comparing your monthly expenses with what kind of salary or income level you want out of life. You may find that one area is higher than another, so make sure these two areas stay equal or even slightly lower than each other.

Another critical factor when saving for retirement is ensuring your savings plan has a growth rate that will allow for higher returns over time rather than just being conservative. 

Financial Goals Every Girl Should Keep In Mind

Don’t let the fact that you are a girl make you feel like you have to settle for less than your full potential. It would be best if you strive for more.

If you are thinking about making some financial changes in your life, consider these five goals-

  • Save up at least 10% of your monthly income and invest that in a retirement account, such as an IRA or SIP. This will help you reach your financial goals sooner than later.

  • Take advantage of any savings opportunities available to you through work or school, but don't just sit around and wait for something to come along—you need to make sure that everything is done right today so that tomorrow is better than today.

  • Pay off debt as quickly as possible—but not so fast that it hurts your credit score or makes it harder for you to borrow money when needed later on down the line; instead, pay off debts with high-interest rates first so that they become smaller and easier to manage over time without negatively impacting your credit score or ability.

  • You might not think this is an important goal for a girl, but it's one of the most important things you can do for yourself and your family. A rainy-day fund will help you weather unexpected expenses like car repairs or medical bills better than nothing. It also gives you peace of mind when you don't have to worry about whether or not to put gas in your tank or buy food for the week.

    Your emergency fund should be at least three months' worth of living expenses. Ideally, it should be six months' worth—that way, you'll always have enough money for unexpected emergencies and more substantial expenses like college tuition payments or new furniture.

  • Establish a good credit score. Speaking of college tuition payments, establishing a good credit score is another massive step toward financial freedom!

    And it's not just about getting a loan; having a high credit score can help you get better interest rates on future purchases, which means less money out of your pocket.

You may also want to know 8 Financial Planning Tips for Women

Facts Every Girl Must Know About Personal Finances

Girls and personal finance are two topics that rarely go hand-in-hand. While some girls can handle the basics of managing their finances, others may struggle with setting aside money for the future. The truth is most girls don't know where to start when it comes to managing their money. And even if they know where to start, they need guidance on staying on track.

So today, we're going to share some tips for ensuring your financial goals are met in a way that doesn't leave you feeling overwhelmed or discouraged.

1) Have Your Own Bank Account

Having your bank account is an essential part of personal finance. You don't have to rely on someone else to get the finances right.

You can also avoid paying unnecessary fees or taxes by just paying into an entirely your account. It enables you to save for future expenses and buy things that are not available at the store, and it also helps you manage your money better. 

2) Be A Part Of Big Money Decisions Of Your Family

Every woman needs to be involved in family finances because many decisions must be made daily, and it may not always be easy for everyone. If you're not in charge of your own financial decisions, then it's likely that you'll never be able to make them.

To make big money decisions for yourself and your family, you must be involved from the very beginning. This will allow you to make sure that any decision works for everyone involved.

3) Keep Track On Your Expenses

Keeping track of your expenses is one of the best ways to take control of your finances. First, write down every cost you have in a journal. Then, start tracking your income and expenses every month. Finally, ensure to add up all the money that goes out each month and record it in a separate account.

Once you've done this for a few months, you'll be able to see how much money is coming in each month and what percentage goes toward debt payments (and what percentage goes toward savings). You'll also see how much is left over after all debts are paid off each month—this will help you determine where more money needs to come from.

4) Set Autopay or A Budget For Your Monthly Expenses

Another common misconception that most people have is that sticking to a budget means that you can no longer afford a pair of expensive shoes or a vacation. The art of creating a budget helps you save, invest, and set aside money for a rainy day. 

A budget is a written plan on how you spend money for a particular month. One must keep an eye on their spending habit and note all the purchases made. 

You may want to consider setting up recurring payments on things like your utilities or insurance so that they don't come out of your paycheck all at once every month. This can help reduce the amount you have to save while ensuring that those bills are paid on time. 

5) Make Smart Investment Choices

Given the fact that you may not receive a sizable salary increment each year, it should not stop you from finding ways to make intelligent investment choices. On the contrary, making smart investment choices can help grow your money, which you can use for your rainy day find, insurance, and retirement plan.

Investing in a diverse investment portfolio is the best way to grow your money. Keep an eye out for well-performing mutual funds that assure good returns, and invest in them to grow your wealth. 

6) Make a Realistic Retirement Plan

In addition to the rainy day fund, you should consider investing in a realistic, well-thought-out retirement plan. In your early 20s and 30s, the most productive years of your life,  you must be inclined to make the most of your money because it is the perfect time to save.

You must explore the various retirement schemes available and select a plan that suits your needs. Consider investing in the employee fund offered by most employers, as it is a systematic saving scheme that can help you in the long run. 

7) Insurance 

As medical expenses keep increasing daily, investing in life and health insurance is essential. Always remember to take a scheme that covers all your needs and think of this as an investment. 

Moreover, insurance helps reduce the risk you face and acts as a buffer in prolonged illness, disability, and liability. Investing in insurance has monetary benefits, as you can also avail of a tax break. 

Additionally, remember to pay the premium on time to continue enjoying the benefits extended by the insurance plan.

8) Protect Your Credit Score 

Buying a home or a car is not impossible for everyone, but it is not easy either. For this reason, you should protect your credit score since it can help you get a loan to buy a car or home.

The best way to maintain a good credit score is to repay your student loans and credit card debt as soon as possible. Otherwise, the amount will spiral out of control and can ruin your credit score.

9) Your Nominations and Wills

Your nominations and wills are important documents because they determine who gets what if anything happens to you. For example, if someone is your executor or trustee, they can ensure that everything is taken care of regarding your finances.

You must designate someone so that if something were to happen to you, they would be able to pick up where you left off.

10)  Learn from Your Monetary Mistakes 

Everyone makes financial mistakes, but you should be clever not to make the same mistake twice. Therefore, you must make yourself more cautious about money management. 

When making financial decisions, it's important to remember that you learned something from your mistakes.

One way to do this is by keeping a budget journal. A budget journal records all your income and expenses over time. It allows you to see how your spending habits have changed over time and how effective your spending has been in getting what you want.

Another way to keep track of financial mistakes is through an investment account. This is similar to a savings account but includes investments like stocks and bonds. If a stock goes up in value, then you've made money! If it goes down in value, then you've lost money. 

This analysis can help you see how much money is coming into the system (good) versus how much money is going out (wrong).

Conclusion

When you are a girl, the world is your oyster. You can do whatever you want and go wherever you want. But to do that, you need to know how to manage your money. I hope these facts help you learn about personal finance. 

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