How women can take financial control

A large problem is that most Indian women do not handle their own finances. More importantly, women also tend to shy away from long-term decision making and financial planning. Here's how to get over the fear, and get started

Updated: Jun 27, 2019 11:52:40 AM UTC

Rishabh Parakh is a Chartered Accountant by Profession and a founder and Chief Gardener of Money Plant Consultancy, one of the fastest growing Tax and financial planning service provider based out of Maharashtra with operations expanded to Indore, Singapore & UK.

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Image: Shutterstock

Unlike the popular belief about women not being good at managing money, the reality is often different. In fact, it is a stereotype to perceive women to be spendthrifts, but trends show that women have been effectively managing household expenses and budgeting since the ages.There are many lessons to learn from here, which could help both men and women in the modern world.

While women are known to be intelligent about financial matters, a large problem is that most women do not handle their own finances. More importantly, women also tend to shy away from long-term decision making and financial planning. The lack of confidence and experience towards long-term financial planning or dependence on their spouses or parents prevents them from taking advantage of their natural acumen. Let’s understand this better under different scenarios as mentioned below, and also find ways by which women can manage their finances better.

A man’s world?
Traditionally, Indian men have been making financial decisions for women. Women, no matter what the financial situation of their family or no matter how much they earn, have been happy to allow their fathers and husbands to take these decisions on their behalf. The presumption is that men ‘know’ the best places to invest, to grow money profitably and keep it safe. Even today, we find many women falling back on the advice of the male members in the family.

Indeed, we have done the women of India a grave injustice by not taking their money management skills seriously in the past, in spite of knowing that Indian women, historically, are great savers and managers of expenses.

However, this scenario is changing even as we speak, helped by the number of entrepreneurs increasing in the country, many of whom are women. As per a survey report conducted by the Confederation of Indian Industry (CII), 56.67 percent of women entrepreneurs make their finance decisions independently, while 38.71 percent make decisions jointly by involving their spouse, father or another important person.

Getting started  Women can gain advantage when they start controlling their finances. Here's how to start:

  1. Believe in yourself and your finance management abilities.
  2. Start by saving and managing smaller amounts, about 20 to 25 percent of your (family) investment portfolio
  3. Knowledge is key; start browsing to increase your financial knowledge and update yourself, use mobile apps designed to help you track your expenses, investments or seek the help of a financial advisor
  4. Don’t keep your savings lying idle. The money saved secretly by Indian women should be better utilised by investing it, rather than keeping it at home. Understand that saving is not investment--you have to let your money work for you.
  5. Set short-term small financial goals because once you accomplish the same, it gives a massive boost to your confidence.
  6. Talk to colleagues and friends and understand how they do things. Make sure you are involved in the family's financial decisions.
  7. Design a realistic financial plan by considering the gap between your income and expenses and how much can be saved practically. To start off, even 10 to 15 percent is good. Remember that managing finances is a lifelong process and it is okay to take some time to get grip of it.
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