Being financially independent is important for women for various reasons. These reasons include coping with rising cost of living, being prepared for emergencies and being able to support herself and/or her children if the need arises. Empowering women to achieve financial freedom will benefit the national economy and promote gender equality within the society. I have listed several reasons why women should strive to achieve financial independence in my previous post.
In this post I wish to write about a few ways that women can become financially independent and self-reliant, regardless of their age or occupation or whether they are married, single or have children. This list provides a few basic ideas on how a woman can be empowered to take managing her finances to her own hands and stop relying on another person especially her parents or her husband, for income or managing money.
Have a Job or a source of monthly income
I believe that every woman must be in a position to earn a monthly income. This could be in the form of a traditional 9 to 5 job in a company or working as a part-time employee or being a freelance worker or being self employed or being an entrepreneur. The internet has provided many opportunities for women entrepreneurs in our generation to launch successful businesses and earn a substantial income to support their families. Some of these online income streams include blogging, being a virtual assistant, being freelance writers, and online teachers.It could also be the income you receive in the form of bank interest or dividends or rental income from your investment properties. There are also opportunities to start a home based business such as selling baked goods or food parcels, selling flower and vegetable plants, being a seamstress, babysitting, tutoring and teaching music or dancing. Most of these jobs do not have the restrictions of traditional jobs and can be done in the comfort of your own home. These jobs provide the opportunity for women choose an opportunity suitable for their lifestyle and earn a monthly income to support her family. Sometimes the income that you earn may not be a significant amount. However, even a small monthly income can become a huge advantage when you are facing a financial emergency.
Get a clear picture of your current financial situation
It is important that you have a clear understanding of your current financial situation or a financial snapshot. It is paramount that you know your outstanding debt liabilities, taxes, and what assets are in your name. It will help you to understand your current situation and help you to decide on a course of action, to set and achieve future financial goals. Organize your bills, tax documents and all other financial related documents so that it is easy to analyse your financial situation on a monthly or bi-annually basis. Set goals to achieve certain financial achievements and work towards it.
Create a budget, save and invest
Having a budget will help you to get a clear picture of how much you are earning every month and what your monthly expenses are.Find a budgeting system that works for you. A budget will also help you to cut out any unnecessary expenses and save money. Always spend less than you earn. It is imperative that you save money on a monthly basis even what you can save initially is a very small amount. Invest in assets that will generate a monthly income. Find investments that suit your lifestyle and your own financial situation. Create passive income streams to provide you with an income even if you are unable to work. Plan and invest for retirement from a young age. Be involved in your family's financial and investment decision making process. Don’t let someone else make all the financial decisions and just hope for the best.
Educate yourself
The phrase “Knowledge is Power” has significant weight in the context of money management. It is a well known fact that many of the successful entrepreneurs make it a habit to read and educate themselves on a daily basis. If you are serious about achieving financial freedom and independence as a woman, it is essential that you take time and make an effort to educate yourself on money management, saving and various streams of investments. This will not only help you to manage your money independently, but also help you to understand the risks involved in different investments and make better investment decisions. Make it a habit to educate yourself on tax liabilities as well as benefits that you are entitled to under the Law. Find out if your city provides any form of tax benefits, subsidies, workshops or networking opportunities for women-owned businesses and use that information to develop your business.
Pay off Debt
It becomes virtually impossible to become financially independent if you are in debt as the debt payments will eat up a large chunk of your monthly income. Evaluate the amount of debt that you currently have and device a plan to pay the debt off as soon as possible. Make sure that you understand the liabilities involved if you are co-signing a mortgage or a vehicle lease. Take steps to properly manage your money and not to amass any high interest consumer debt such as credit card debt.
Safeguard yourself and your money
Make a plan to prepare for unfortunate contingencies such as disability and death in the family. Although it may be a morbid topic to discuss have a plan as to how you are going to provide some form of financial security to your dependents (especially if they are minors) in your absence. Prepare a last will and appoint nominees for your bank accounts if you feel it is necessary to do so. Get an insurance cover (if necessary) to provide for grave illnesses or major surgeries.
It is vital that all women make it a goal to become financially independent and become empowered to work towards advancing their financial position within their family.