Financial awareness is an extremely important part of equipping women to make informed decisions and fully realize their potential. On the occasion of International Women's Day, Hardika Shah, Founder & CEO, Kinara Capital shares 5 tips that she considers are very important for young women to internalize in order to efficiently manage their finances:

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

1. Use the power of compounding

For those starting their career, Hardika says it’s the perfect time to start saving and investing. She opines, "When you invest money, you earn a return on it. If those earnings are reinvested instead of being withdrawn, they can generate a significantly larger amount of wealth over time. The longer your investment horizon, the more you have the potential to earn. So if you haven’t started yet, this is your sign to start investing, after doing your due diligence."

2. Budget and track expenses

She feels it’s very easy for spending to get away from youngsters and disrupt their financial goals. She explains, "While it may seem tedious, the best way to regulate discretionary spending is to set yourself a budget first, and track expenses to make sure you stick to it. There are a number of great apps that you can use for this, which will help you keep your spending records organized and give you a clear snapshot of your budget."

3. Invest in yourself

The Founder & CEO, Kinara Capital belives that for young people, financial planning shouldn’t just entail saving and spending. "It’s also about long-term wealth-building through improving your skills and earning potential. Set aside a portion of your budget to invest in self-improvement and skill-building. You can explore a range of avenues, from online courses to subscribing to informative resources and podcasts," she adds.

4. Take control of your finances

A lot of young people, she says, particularly women, let a parent, partner or trusted individual organize their finances for them. Hardika informs that whether it is filing your taxes or keeping all financial documents organized, it’s important for an indivudual to take control of their finances and do as much as possible themselves. She explains that this way, they won’t be rendered clueless in emergencies and know how to manage things in the long term.

5. Don’t get tied down

Many still hold owning fixed assets in the highest regard in terms of financial planning and investment stability. She says that this false sense of security ties a person down to the places where they buy property, or shackles them to big-ticket loans, limiting the possibilities they can explore.

"Sometimes it makes most sense to just rent what you need, in order to make the most of all the opportunities and options available," she sums up saying.

(Disclaimer: Consult a financial planner before making any investment decision.)