Why financial planning plays a major role in maintaining your mental health

It essentially aids you in maintaining control over your income, expenses, and investments so that you manage your finances and reach your goal.

Financial planning is extremely important for every individual, irrespective of whether they are a man or a woman. It is a bit more important for women to know their way around money and learn how to save, invest, and spend it cautiously.

How does it play a major role in keeping your mental health?

Financial problems are one of the major causes of stress or mental health issues for an individual. A person’s quality of life totally depends on the money decisions that they make.

It is hence prudent to make wise decisions with regard to your hard-earned money and not let this important aspect ruin your mental peace and health.

Financial planning, money management, and investments have traditionally been male-dominated and male-oriented. Women have not been encouraged to actively manage money as the ecosystem has predominantly targeted men.

So, a step toward learning and taking charge of their money can bring a lot of clarity and positivity to their life. It also builds confidence and provides mental peace.

Women are natural money managers. When armed with the right attributes of being risk-aware, disciplined, making informed decisions, and staying calm under stress, women can go from managing home budgets to smart investors.

What can you do to lead a stress-free life?

Effective money management alleviates stress, worry, and insecurity, which then allows you to enjoy every moment of your life.

1) Create a budget so you don’t end up making impulsive purchases.

2) Save regularly to avoid living paycheck-to-paycheck.

3) Endeavor to have more than one source of income: Multiple sources of income protect you from a financial crunch as well as provide a stream of money for investments.

4) Having a fair understanding of where your money is going and gaining knowledge of the financial instruments in your portfolio will help you with assessing risk and reward scenarios. This will help you avoid unwanted risks and have a peaceful sleep.

5) Set financial goals and start investing.

6) Create an emergency fund to build a cushion to protect yourself and your family from any contingency. It can be equivalent to 6–8 months of your monthly expenses.

7) Create a retirement fund: Your expenses will continue but your income will stop, so you’ll need a good financial cushion to sustain you through your dream retirement and ensure that you’re living independently during your retirement years.

8) Manage your debts effectively, and take out loans as per your affordability.

9) Prioritise health and term insurance: Uncertainties don’t knock at the door, they are sudden and rather disruptive—emotionally and financially! Our study stated that 58% of women have no health or life insurance in their name. So cover yourself and your loved ones with health and life insurance to ensure the financial stability of your family!

10) In case managing money seems overwhelming in the first place, talk with fellow women, take guidance from experts, and take baby steps. But the most crucial thing is to begin the journey so that you can grow accustomed to managing it.

11) Financial planning is a family strategy: Have periodic meetings with your family to discuss financial matters to make sure everyone is informed and there won’t be any stress in case of need.

Good financial health leads to good mental health!