Money management for Indian women

“You must gain control over money, or the lack of it will forever control you ” – Dave Ramsey.

In the last post, I had shared as to why I started writing on Money Management and Financial Literacy for women. While the world talks a lot about women empowerment, there are very few initiatives taken with respect to Financial Literacy among women. Talking about women empowerment without really empowering her to manage finances, comes as a spoof to me. While the world is debating on gender pay gaps, financial literacy has to find its strong foothold amongst women, more so in India.

There was a study conducted by S&P (2015), which stated that 80% of Indian women are not financially literate. The percentage of working women has increased significantly in the last decade, many women entrepreneurs are coming up, women are finding many ways to earn money, but when it comes to financial literacy, it reflects a grim situation.

Small survey on Financial Planning:

This prompted me to undertake a survey on my Instagram, wherein I questioned my followers about their knowledge in financial concepts. I was glad to read answers wherein women have been managing the complete corpus. But that % was in single-digit only. 50% of the responses said that they take joint decisions when it comes to Investment, approx. 45% accepted that budgeting, Investing, and Finance is their weakness. They let their husband/father/brother take lead in this aspect.

I had fairly assumed a similar ratio. A few personal messages reaffirmed my thoughts of taking up Financial literacy for women. Here are 2 stories that I felt worth sharing because they are a result of sheer financial mismanagement and being unaware of Money Management.

The COVID-19 era has been devastating for many, and it is the right time that we understand our finances and deep dive into it making the right decisions for the long-term.

• One of my followers (working in an IT company) shared that she had been investing most of her savings in FD (Fixed Deposit), being it one of the safe instruments. A colleague of hers shared, as to how his investment in a Cooperative bank was earning him a 3% higher interest rate than a regular FD. Sounded lucrative, she decided to switch (without doing any analysis/research/discussion with a colleague). In the next 3 months, this investment gave her a run for her own money, and all her savings were stuck. Her colleague confessed later that he used to get the commission, and he never did any research on the scheme of the cooperative bank.
• Another follower, who is a doctor by profession, shared her personal story of how small negligence of not buying Health Insurance dried up their savings and burdened them with a personal loan. A sudden hospitalization (in a private hospital) of her husband and his treatment made them poorer by 15 lakhs other than the income loss due to the cancellation of his multiple open IT projects. They opted for a personal loan at 18% interest rate, just because they never assumed Health Insurance as a priority. They assumed that it was a sheer wastage of their money if they spend 10-12k as a policy premium. High medical expenses got them to reassess their Financial planning. 

Well, these are just a few examples, if we look around, talk to others, there are so many incidents happening just due to ignorance. 

These conversations reminded me of a very famous quote : 

“There are decades where nothing happens, and there are weeks where decades happen.”˜Lenin. Are you well prepared for those weeks? Read it twice and ponder upon it!

What do you mean by Financial Literacy?

VISA surveyed in 2012 around financial Literacy in women and Indian women were ranked in 19th place. Only 36.8% of women were termed as Financially literate. Many similar studies have been conducted in the past few years and the outcome of most of the studies have been more or less the same.

Millennial women are highly educated, earning well and the trend to play a significant role in the investment decision is certainly on a rise, but a lot more needs to be worked around towards Money Management. Women have been active in budgeting and managing household expenses, but it is often seen that even earning women steps back when it comes to bigger financial goals.

What exactly is Financial Literacy? If you have an understanding of the financial market products, risk and reward calculations, and can analyze to make an informed choice, you’re financially literate (As per RBI).

If you read the quote I shared above, you’ll get the gist, as to why Financial literacy is essential for a woman to live life as per her choices. If you’re the main spender, you ought to understand the basic concepts of compounding, instrument fees, else you’ll end up wasting your hard-earned money on unnecessary transactions. 

What comes under Financial Planning?

Budgeting your household expenses is a very small part of Financial Planning. Ask yourself about Post-retirement savings, Emergency funds, Investing money for better ROI, basic Insurance plans, Risk assessment, and diversification. Well, this is the need so that we, as women are ready for any future eventualities.

The best portfolio comes up when it is designed by the women and men of the house. The reason is women are less aggressive (usually) and take less risk. SIP’s, long-term stock holdings, detailed research, better diversification, has been a pattern observed among women. When a portfolio has both the approaches, the results will always be better (in the short and long term).

Conclusion: Financial Planning amongst women in India

Thus, let’s truly empower ourselves, by inculcating the habit of financial planning to secure our future. Pick up a diary and start writing down your goals, expenses, ways to control unnecessary expenses. There is a dire need for us today, to read, research, discuss, and improve upon our Financial Planning aspects. There have been so many webinars happening, attend them, register yourself for some online Financial Management course, read relevant blogs. 

We can work in any situation, all we need today is to secure our future, with smart investing skills. Take a look at this list, if we are determined, no field can be out of our reach. After all, our FM is a woman! Get inspired!

Stay tuned, subscribe to my blog, and follow me on Instagram , as a lot more posts on Financial Planning will be up. If you have any queries, you can either DM me on my Instagram or comment below.

Stay safe, stay secure!

Much Love,

Jhilmil