Welcome to the very first article under the Women and Money Series! In this edition we will be sharing some simple tips for women to improve their financial well-being.
As women, we are always on the lookout for ways to look good, be more fit and have more happiness.. and there are plenty of tips out there on such topics of beauty, health, wellness.
When it comes to your personal finance, wouldn’t it be nice to have more clarity, confidence and feeling of abundance about our money?
Here are 3 simple steps to help you have healthier finances and feel great about your future.
S.I.P your way to healthy finances
What is S.I.P about? It stands for 3 simple habits that forms the foundation for healthy personal finance.
1. SAVE
2. INVEST
3. PROTECT
Just like how a basic skincare regime of Cleanse, Moisturise and Sun Protection helps you maintain a good complexion, following these 3 financial habits diligently over time will give you a peace of mind and confidence about your financial future.
#1. SAVE
Everything starts with Saving. It is the key to materialising any financial goals and lifestyle you desire. Most women do save, but some save much more than others.
Have you ever wondered why some women are able to save more than others? Is it because they are more thrifty and live an extremely frugal life vs others who live it up? Or is it because they are in a higher paying job and have more to save?
It’s not how much you earn but how much you keep
I have come across women who merely earn an average income of $40k a year and yet able to save $20k a year. Meanwhile there are people who earn 6 figure salary yet do not have much left to save.
While it’s true that lifestyle plays a part, the key that determines if a person is able to save consistently lies in How they save.
There are 2 types of savers in the world – let’s call them Alice and Betty
- Alice Spends first then Saves the balance
- Betty Saves first then Spends the balance
Who do you think will be the more effective saver?
Because Alice spends first based on her available salary, she has the tendency to unknowingly spend on additional stuff, those seemingly small items that after lunch latte with colleagues or fancy new dessert, sale purchases online etc which all add up over time.. resulting in lesser savings left at the end of the month.
Betty on the other hand, ensures that she has a fixed amount of savings every month because she systematically sets aside her savings first before spending the rest.
So in a nutshell, the trick to saving more while having a life is to always pay yourself first before paying the bills or spending on any other stuff.
You will be in control of how much you want to save instead of being at the mercy of how much is left at the end of the month. A recommended level is to save at least 20% of your monthly salary.
#2. INVEST
Now that you have set up a systematic savings habit, the next step is to boost the growth of your savings.
Relying on savings alone to achieve your financial goals will be challenging in today’ low interest rate environment. Because you will have to work really hard to accumulate enough plus fend off the eroding effect of inflation on your hard earned savings.
Investing is a way to grow your savings through the power of compounding, just like how applying moisturizer helps to add moisture and buoyancy to your skin.
Talking about investing, many woman actually know they should invest, that it is good to invest and even that they need to invest… but many still face challenges in getting started.
When I ask women about how they feel about investing, often it’s not so much of a lack of knowledge or capability issue, but it has more to do with psychological barriers that holds women back from investing.
The good news is that women in fact make great investors because of our prudence and higher tendency to follow the plan. Check out this article about how ladies make great investors
#3. PROTECT
The last piece of the puzzle is to Protect your Wealth. This is akin to the sunblock step in your skin care regime which protects your skin from premature aging of the skin and harmful UV rays.
Without the right financial protection, the wealth you have painstakingly built up over the years can be wiped out in the face of unexpected illness and accidents. It can also seriously jeopardize our family’s financial situation and create a lot of unwanted stress and worry.
3 essential coverage that every women must have
- Comprehensive hospitalization plan – to cover costly medical treatment expenses during, before and after hospitalization.
- Critical Illness protection – to pay out a lump sum of money to pay for living expenses in the event of a serious illness that stops one from working and earning an income.
- Personal Accident protection – to cover the medical expenses from minor incidents like sprains, food poisoning, dengue fever etc, and paying out a sum of money upon the inability to work or upon severe disability after a major accident.
Most women do have insurance policies providing some form of coverage. Question is – do your policies plans cover you adequately?
When it comes to insurance, there are nuances to take note of under each type of coverage. For example, does your hospitalization plan cover the bill in full or will you have to fork out a portion of the bill? For plans that cover critical illnesses, will it pay out if your illness is detected at earlier stages or only when the illness is very severe?
If you have been paying for multiple policies over the years but are unsure or have always wondered if you are really adequately covered, we have a simple process that can help you get clear of your coverage and get a more peace of mind.
So there you have it – 3 simple steps to healthier finances
- SAVE
- INVEST
- PROTECT
By following these 3 easy to remember steps, you can relax, have a cup of tea and S.I.P your way to the greater peace and confidence that comes with a healthy personal finance.
To Your Success and Happiness,
Yong Hui
* The Women and Money Series is an initiative by Women Enrich Network, to provide practical financial tips that are presented from a woman’s perspective and empower more women to be confident about their financial future *
