Navigating Finances As A Sole Earner? Start With These Steps

Think of saving as the very first thing you do when you get paid, before anything else. Think of it as paying yourself and your family's future first

Saving is step one, but investing is how your money really grows to build wealth over time

Source : ABPLIVE AI

Finding yourself as the main income provider for your family can be a significant shift, especially if it happened unexpectedly. Whether it is due to a partner losing their job, or a sudden change in the household income, the transition can be unsettling. Being the sole breadwinner is a big responsibility, which can feel overwhelming, as you try to make sure everyone’s needs are met. But here's the good news. With a few smart steps, you can regain control of your finances and build a solid future for your loved ones. Let's understand how. 

Start With Smart, Steady Saving

Think of saving as the very first thing you do when you get paid, before anything else. Think of it as paying yourself and your family's future first. If you earn a regular income, set aside a specific sum, no matter how small, consistently. This regular saving builds up your emergency fund that help you take care of unexpected costs like a sudden car repair or a medical bill. 

Plan For Life's Big Moments

As your family's only provider, it's smart to think ahead and plan for future milestones or contingencies, like children’s education, buying a house, or your retirement. Discuss your family's future goals, then estimate how much they might cost. Add a bit extra, 15-20 per cent, to these costs as a buffer for inflation-led increases. A fair idea of your approximate costs is sufficient to help you start setting your financial targets.

Make Your Money Work For You Through Investing

Saving is step one, but investing is how your money really grows to build wealth over time. The key to ensuring your money’s growth is to spread your investments, instead of putting all your eggs in one basket.

Here are some options to consider: 

• Stock market funds: Instead of picking individual stocks, consider mutual funds or Exchange-Traded Funds (ETFs). Comprising multiple company stocks, these are ideal for long-term growth and spreading out your risk.
• Real estate: If you aren’t in the position to buy property, you can still invest in real estate through real estate investment trusts (REITs). These are companies that own income-generating properties, giving you the benefit of the property market without the hassles associated with property ownership.  
• Government bonds: To balance out your riskier investments, consider safe bets like government bonds which typically offer lower but reliable returns. 
• Retirement savings: Pension and retirement plans like provident fund are provided by most employers and are great options for creating long-term savings, along with tax-saving benefits. 

Secure Your Health And Finances With Insurance

Medical emergencies can strike unexpectedly, with costs that could quickly wipe out a sole earner's savings. That's why health insurance is non-negotiable for your financial journey, acting as a vital shield to cover emergency medical expenses. 

These clear, actionable steps can help you build a stronger financial future. Though it will take discipline, but the peace of mind knowing you're protecting and providing for your loved ones is truly priceless.

(The author is the Senior Manager, Communications at BankBazaar.com. This article has been published as part of a special arrangement with BankBazaar)