The Complete Financial Literacy Checklist for Women

lakshmewomenempowe

Sep 21

4 min read

Managing money becomes easier when you know what you earn, what you spend and what you want to achieve. For many women, learning about money is something that happens gradually. They may start earning first and learn about investments, insurance or retirement much later.

There is no need to understand every financial product. What matters is knowing the basics and being able to make decisions about your own money.

This Checklist Covers the Main Areas Women Should Know About

1. Know Your Income

Start with your monthly income.

If you receive a salary, look at the amount that actually reaches your bank account. If you earn through a business, freelance work or other sources, keep a record of those earnings as well.

Knowing your income helps you decide what you can reasonably spend, save and invest.

Checklist

Do I know my monthly income?
Do I understand the deductions from my salary?
Do I keep track of other income?

2. Keep Track of Spending

You may be surprised by how quickly small expenses add up.

For a month, write down everything you spend. Include rent, groceries, electricity, travel, shopping, eating out and subscriptions.

This exercise can show you where your money is going and whether there are expenses you could reduce.

Checklist

DoI know my regular expenses?
Do I track my spending?
Do I know where most of my money goes?
Do I review my expenses regularly?

3. Have a Monthly Budget

Once you know your income and expenses, make a simple budget.

First account for essential expenses. Then decide how much you want to save and invest. Keep some money for personal spending as well.

A budget should be practical. If it is too restrictive, it may be difficult to follow for long.

Checklist

Do I have a monthly budget?
Do I set aside money for savings?
Do I have money planned for financial goals?
Do I review my budget when my income or expenses change?

4. Build an Emergency Fund

We all know that life throws us curveballs from time to time. An unexpected medical expense or sudden unemployment can throw a spanner in your financial arrangements.

To cope with these situations, having an emergency fund is your lifebelt. To begin with, you could set aside a small amount and keep supplementing it regularly.

Checklist

Do I have emergency savings?
Is money easy to access?
Do I add to it regularly?
Do I review the amount as my expenses change?

5. Understand Your Loans and Credit Cards

If you availed a loan, be sure to find out the total amount you will be paying back.

See your interest rate, balance, monthly payment (EMI) and repayment time period. For credit cards, know how they will charge for not paying the entire amount with each billing cycle.

Whenever you apply for a loan, be it a loan from a financial institution or other lending company, it would be wise to check the total payment that you are going to make instead of just checking the monthly installment (EMI) only.

Checklist

Do I know my outstanding debt?
Do I know the interest rates?
Do I pay my EMIs on time?
Do I understand my credit card payments?
Do I check the total cost before taking a loan?

6. Understand Your Investments

You should know where your savings are invested and why.

If you have mutual funds, stocks, fixed deposits or other investments, learn how each one works. Check the level of risk, expected time period, charges and other important details.

Do not invest simply because someone you know made money from a particular investment.

Checklist

Do I know what I have invested in?
Do I understand the risks?
Do I know the purpose of each investment?
DoI review my investments from time to time?

7. Check Your Insurance

Insurance can help protect your finances when certain unexpected events occur.

Review your health insurance and life insurance, if applicable. Look at the coverage, exclusions, premium and nominee details.

Your insurance needs may change as your income and family responsibilities change.

Checklist

Do I have reviewed my health insurance?
Do I understand my policy?
Do I know the exclusions?
Are my nominee details correct?
Do I review my insurance when my circumstances change?

How a Finance Buddy for Women Can Help

Some financial topics are difficult to understand when you are learning them for the first time.

Team LakshMe - Finance Buddy for Women can help explain subjects such as budgeting, saving, investing, insurance, taxes and retirement planning in simpler terms.

It can also give women a place to ask questions before making important financial decisions.

The goal is not to make decisions for you. It is to help you understand your options and become more comfortable handling your money.

Conclusion

Financial literacy is not about knowing every investment product or understanding complicated financial terms. It is about being aware of your own financial situation and knowing how to make sensible decisions. Women Financial Literacy can help women take greater responsibility for their money, whether they are starting their first job, managing a household, running a business or planning for retirement.