Money management tips for homemakers

Raising the next generation as homemaker requires a lot of sacrifices. Depending on a single income could be challenging and requires proper budgeting and planning. 

Managing finances is as important as earning them. If you don’t know how to manage it, then you’ll not be able to grow your wealth.

Saving from income is one part, and investing is another. Just saving will not help you to grow it until you invest in the right asset class.

Money management tips for homemakers:

1. Have an emergency fund

The first thing is to have an emergency cover ready which is your emergency fund. In life, we can face a lot of uncertainty, from medical illness to job loss of the bread earner in the family and many more.

It is better to have an emergency corpus ready to cover your expenses for six months. So, your savings won’t be affected in an emergency situation; they will remain untouched.

2. Buy life and health insurance

Many people make this mistake; they don’t buy life and medical insurance. But it is one of the biggest mistakes they make while managing finances.

Medical insurance will help you when you need medical treatment for your illness. Because when you become ill or require some surgery, then medical insurance will help you to bear those expenses. At the time of surgery, you may not have the budget to afford those expenses, so it is better to buy one.

Additional read: Saving tips for young adults

3. Plan a monthly budget

Write down all your monthly expense on various items like expenses on daal, flour, oil, vegetables, and so on. Identify the minimum budget for all the necessary items.

For example, if you have made a budget of Rs.3,000 for vegetables but have only spent Rs.2,000, save those Rs.1,000 and allocate them towards your savings target. Try to do it every month at the beginning of the month. This way, you can plan and save every month.

4. Try to save

Try to save from wherever you can. First, fulfill your necessity and then luxury. Try to avoid buying luxury items. If you can’t avoid them, then buy them at last.

Or you can also identify whether those are needed or not by postponing them. Suppose you go shopping every month, then try doing it once every two months. 

Additional read: Savings vs Investing

5. Invest your savings

With time, the currency is getting depreciated. The amount that you are saving every month is getting depreciated over time. So, you need to invest your savings as per your risk appetite to beat inflation, and even in the long-term, you can create wealth.

For example, you go and buy 1 kg daal for Rs.100, but after a few years, that same daal might cost you Rs.150. If you don’t invest your savings, you’ll probably lose the value of your savings.

Conclusion:

Financial literacy is critical irrespective of the role you play in your life. Homemakers could quickly learn and improve money management skills as it is done in everyday life.

Homemakers could save for their family’s future along with managing the present. Channelizing your savings into the right asset class is very important

Consult an expert advisor to get the right plan for you