Financial well-being involves learning how to manage your money and resources wisely, ensuring not just present financial security but also creating peace of mind for the future. This sense of security gives you the freedom to enjoy life both now and in the years to come.
A common misconception is that mental well-being, work-life balance, and financial well-being are separate goals to be pursued independently. However, they are deeply interconnected. Enjoying a good life with family and friends, achieving happiness and emotional wellness, and maintaining a balanced work-life dynamic all depend on financial security. It's easier to reflect on life's challenges when you're financially stable, whether that means sitting in your car or enjoying a sunset from your apartment.
Financial security is the foundation upon which a fulfilling life is built. Wealth is meaningless if one neglects health and overall well-being.
In today's world, even Maslow's hierarchy of needs might require a revision, as financial stability is crucial for accessing basic necessities like food, shelter, and healthcare. We must acknowledge that we live in a capitalistic society where financial planning is essential.
Big dreams don’t come true overnight, but the key is to start taking steps towards them.
What is the difference between Self-Care vs. Personal Development?
The difference between self-care and personal development lies in their impact. Self-care offers temporary relief and instant gratification, like getting a massage or taking a bubble bath. It helps you escape stress but doesn’t solve the underlying issues, so you have to keep doing it. Personal development, on the other hand, creates lasting change by addressing the root causes of your stress or dissatisfaction, leading to long-term growth and improvement.
How to know whether it’s the right time for you to start investing in yourself?
The right time to invest in yourself is when you feel ready to take control of your life and grow in all areas. It's when you want to improve and reach a higher level of success and confidence. For a woman who values herself, this isn't just a decision—it’s something essential. And if you are reading this, the time is NOW!
How do you find someone who believes in you and sees endless possibility for you?
Finding someone who believes in you starts with looking for people who genuinely support your dreams and encourage you to grow. This could be a mentor, friend, family member, or even a coach. They will listen to your goals, push you to aim higher, and always have your back when things get tough.
If you're trying to start a small business, a mentor who has already been through that journey might believe in your vision and guide you through challenges. They help you see possibilities you might not have noticed, boosting your confidence and helping you succeed.
What are savings for Emergency?
Build an emergency fund that is at least three times your monthly income. To do this, start by saving a small, fixed amount every month in a bank account, such as a recurring deposit. Aim to save around 20% to 30% of your salary each month. This way, you can build your emergency fund in about 9-15 months. If you can’t save that much, just save whatever you can regularly and consistently, and don’t use this money unless it’s a real emergency.
Example: If your monthly income is ₹50,000, aim to save at least ₹10,000 every month. Over time, you’ll have a backup for unexpected expenses like medical emergencies or job loss.
Why is health insurance important?
Having health insurance helps you take care of your health without worrying about big medical bills. It's a good idea to get a personal health plan, even if you already have insurance from your job or through your spouse’s employer. When choosing health insurance, look at these things:
Example: If you’re planning to start a family, look for a plan that includes maternity coverage, so you don’t have to pay out of pocket for those medical costs.
What is Term Insurance?
If your income supports your family or is the main source of income, term insurance is important. It gives a lump sum to your family if something happens to you, like death or a critical illness. Start with a basic plan that covers 10 times your annual salary and gradually increase it over time. Term insurance is cheaper when you buy it early, so it’s best to get it while you’re young.
Example: If you earn ₹5 lakhs a year, get a term insurance plan that covers at least ₹50 lakhs. This way, if something unexpected happens, your family will have financial support.
Why is it important to have my own Credit Card and not an add-on?
Start with a secured credit card if you don’t have a credit history. The easiest option is to get a card against a Fixed Deposit (FD). This helps build your credit profile. Don’t use an add-on card with your family member; it won’t help with your credit history. Once you build your score, you can apply for a basic or lifestyle credit card.
Example: Use your ₹50,000 FD to get a secured credit card and start building your credit score.
How can I take my First Loan?
If you don’t have a credit history, take a loan against your FD or a gold loan. Both are easier to get, but gold loans may have higher interest rates. Always repay on time to avoid losing your FD or gold. As you build your credit, you can qualify for personal or home loans.
Example: Use a ₹1.5 lakh FD for a low-interest loan, then build credit for future loans.
How to plan marriage finances?
When planning for a wedding, you can borrow through personal loans, loans against assets like gold, or family loans with clear repayment plans. Alternatively, save by setting a budget, cutting unnecessary costs, and investing in fixed deposits or mutual funds. Always discuss financial responsibilities with your partner to avoid overspending and make sure you're both aligned on managing costs and existing liabilities.
What is Maternity Coverage?
Most health insurance plans have a maternity cover capped at ₹50,000, which may not be enough for private healthcare. Consider adding a small top-up for complete maternity coverage, but remember there might be a waiting period.
Example: If your hospital bill is likely to be ₹1 lakh, make sure to get an insurance top-up early to cover the extra costs.
How to manage Expenses After Baby?
Expect household expenses to rise by 50-100% after the baby arrives. Baby products, help with care, and nutrition will increase costs for a few months. Spread out the expenses and focus on essentials that make life easier.
Example: If your household expenses are 30% of your income, expect them to rise to 45-60% in the first three months after the baby.
How to save for Pregnancy?
If insurance isn’t an option, build savings specifically for maternity care. Break down expected costs and save a little more than you estimate. Recurring deposits can help manage monthly savings.
Example: If you estimate ₹1 lakh for pregnancy care, save an extra 10%, so aim for ₹1.1 lakhs to cover unexpected costs.
How should I Manage with Reduced Income?
Before taking a maternity sabbatical, ensure your family's income can handle your absence without impacting daily expenses. For example, if your household typically relies on your salary for monthly expenses like rent and groceries, confirm that your partner’s income, along with any additional savings, can cover these costs. Additionally, make sure this doesn’t affect your ongoing savings goals or investments. If you’re used to saving for your child’s education or a home, verify that your family’s income will still allow you to contribute to these goals even when you’re not earning.
What preparations are required for Re-entering the Workforce?
When returning to work after a sabbatical, be prepared for changes in the job market and skill requirements. For instance, if you’re a marketing professional, consider updating your skills with certifications in digital marketing or social media, as these areas may have evolved. Opt for cost-effective learning options, such as online courses or free workshops, if budget constraints are an issue. Additionally, engage in small freelance projects to maintain your skills and build your resume.
How to plan for kid’s education?
Education costs are rising much faster than general inflation. For instance, the cost of a four-year Bachelor of Technology program in a private Indian university is currently ₹10 lakh, and an MBBS course is ₹50 lakh—significantly higher than a decade ago. Similarly, postgraduate studies abroad might exceed ₹1 crore soon. To cope with these increasing costs, it’s crucial to plan your finances early, considering how education inflation can outpace general inflation.
How Best to Save for child’s education?
Start planning for your child's education by setting clear financial goals based on the type of education you envision, estimated costs, and the time frame. Invest early and choose suitable investment options to maximize growth. For multiple children, save separately for each to ensure funds are used exclusively for their education. Also, remember to factor in additional expenses beyond tuition, such as books, living costs, and other fees, when calculating how much you need to save.