A matter of figures

Women are realising that devoting more time and energy towards money management pays rich dividends in their personal and family life. Many now include financial planning in their repertoire

Anju works as a domestic help. Yet she has big dreams for her three-year old daughter Sakshi. To fulfil her dreams, she has taken on the role of the money manager in her family. Shortly after the birth of her daughter, she opened an account for her daughter where she deposits Rs 500 every month. When the Sukanya Samridhi Yojna was announced she was quick to subscribe to the scheme. Bank savings have now helped her to shift her daughter from a government school in Mullanpur village to a private school in Chandigarh.

A college lecturer Nupur (name changed) became a widow at an early age. Her salary was not enough to put her two children through college. So with the help and advice of her father, she made some good investments in property and also played the stock market. Today, her children are settled and she has saved for retirement.

Anju and Nupur are not alone in their quest for financial betterment through money management. This rare breed of money managers is growing slowly but steadily. You can find them in different social and economic strata. They dream big. They are smart enough to realise that fulfilment of their dream costs money. So they are taking on financial control.

Breaching the divide

The male members were the sole bread winners and this naturally earned them the right to control and monitor the finances of the family. As more and more women became literate, many educated women stepped out to be part of the work force to be sole or secondary earners. With income came the desire to take financial decisions.

A recent pan–India Nielsen BlackRock study shows that 23 per cent women in India take financial decisions independently. Not a very heartening figure but financial planners concur that more and more women are now inclined to take on financial control. A survey by Ameriprise India Pvt Ltd, a financial services company, reveals that young Indian women are increasingly beginning to take control of their finances. The Blackrock study reveals that 90 per cent of working women participate in financial decision-making process. It is estimated that by 2028 women will control 75 per cent discretionary spending around the world.

Financial participation a must

Participation in money matters is no longer an option but a necessity for the new-age woman. Money control not only alleviates her social status but also gives her self-respect that stems from self-reliance. It also equips women to resist exploitation in various fields. Gurpreet Deo, IGP, NRI & Women Wing, Mohali, says “given the unstable nature of matrimony today and given the fact that even educated and progressive women can be prevailed upon to transfer their income and assets to the husband and his family, the woman should have financial control firmly in her hands.”

Also, women have investment needs and financial goals that are specific to them. Several studies have revealed that women do not seek to accumulate money for its own sake but invest to generate money that helps them to take care of themselves and their families, improve lives and ensure security. So women need to have a portfolio of investment and savings options to meet these goals and also to cover for contingencies where the male financial anchor is not available to take decisions. Moreover, lives of women are pivoted around care-giving responsibility which causes frequent career breaks and sometimes loss of income. So the financial needs of women are different. The significant male ‘other’ may not be able to take decisions that factor in such specific needs. Financial control, thus, is must for women today.

The new buzzword

Financial planners say that most women have a good grasp of the basic mechanics of financial plans but are unable to pick correct investment options due to sketchy knowledge. Financial knowledge allows women to analyse the return-risk aspects of various schemes. Financial literacy, then, is the obvious tool of empowerment. Anita Hira, Chief Manager, SBI, PGI branch, Chandigarh, feels that financial awareness helps women to take correct investment decisions. It also helps them to create a low-risk investment portfolio.

Educated women can gather knowledge online and offline or discuss matters with financial planners. Newspapers like Financial Times and Economic Times, magazines like Business Today and books like Mutual Fund Yearbook or Savings & Investment Yearbook help. Vibha Padalkar, CFO HDFC Life, writes on her blog, “It is critical for women to educate themselves about the different investment vehicles available. Women should cultivate a habit of reading different personal finance columns.”

Initiatives are on to target the not-so-literate lower income groups as well. The RBI started Project Financial literacy aimed at building awareness among adults, including women. Bank of India with its Abhay Counselling Centres in Maharashtra and ICICI Bank with its Disha Trust endeavour to impart financial know-how to the lower economic strata. NGOs like Sanchayan, Meljol and Citi India have also taken on the laudable task of financial education but we need agencies that cater specifically to the needs of women.

Better money managers

Research shows that women are better money managers than men. Nitin Vyakaranam, CEO Arthayantra, an online financial planning firm, says “Most often, a family’s financial goals (both short and long-term) are set, managed and achieved by women.” Women are also cautious by nature and therefore minimise risk and invest in financial instruments that guarantee a good and regular return. Tanu Pannu, a city entrepreneur with a Masters in Economics, feels that investment options that mitigate risk are more acceptable to women who save by instinct.

Women do lack confidence but that simply makes them dig deeper into the whys and wherefores of an investment. Women investors, in fact, have a disciplined and logical approach to investing. They also are more practical in approaching goals. Short-term goals like vacation in an exotic locale or purchase of car are scrapped without regret and replaced with long-term goals like college education of a child or savings for marriage. Malvika Kapoor, a multi-tasking entrepreneur, believes that “Women have the ability to take more logical decisions. They also have a right to their money and should have the freedom to invest it at will.”

Savvy money moves

To achieve a modicum of financial independence, women need to adhere to these rules:

• Set realistic goals with a correct assessment of money requirement and timelines to meet the goal.
• Zero in on investment options after considering advice from financial planners or credible sources.
• Review investment options on a regular basis to judge their performance.
• Switch to better investment options if need be.
• Create a back-up contingency fund to cover for unforeseen eventualities like illness, death in the family or loss of job.

Realistically speaking, women still have a long way to go to achieve complete monetary control. But the somewhat disjointed march towards financial freedom has begun. The growing belief that financial control empowers, may turn it into a headlong rush sooner than later

in The Tribune