.In India, financial planning for women don’t gel well as much as men and financial planning do. Of late, a large number of ladies are venturing out in the space of personal finance, but this has been a space largely dominated by the male.
However, the importance of women and finances is immense and very few ladies realize that. It the the men who end up managing the family finances. Our recent poll on who manages the family finances also revealed the same.
But that is not how it should ideally be. Let’s check why.
Financial Planning and Women
In India, have you wondered why the woman leaves her job and flies across continents to catch up with her husband ? I haven’t heard of a single story where in the IT world, the husband quit and joined his wife at the place where she was working.
Post marriage, in most of the instances, the lady leaves her hometown and her job and relocates to the city where her husband resides.
So historically, women give up their careers for their husbands. That means that they lose opportunities to earn more money in their life while the men keep continuously earning.
For a female who has 2 kids and takes a break from work for two years, that is 4 years of earnings lost. That is quite a sacrifice to make. Remember the woman of today still has the primary responsibility of household chores and taking care of the children. That is extra responsibility which can make a lady stay at home longer than her maternity lasts and therefore it means more income is lost.
The topic at hand needs to be a more tightly coupled concept.
In today’s world, the life expectancy of women is more than men by around 5 to 6 years. If women folk are going to live longer than men, they better have a large retirement kitty aside for the long haul.
Today, the divorce rates in India are climbing rapidly. This brings more upheaval in a women’s life and if her finances are not well arranged, she might find herself struggling.
The priorities for men and women are often different – men want to increase their wealth and get rich while women focus more on security for their children and themselves.
Financial independence, care and support for children and job transfers are some of the challenges which make a stronger case for financial planning and women to co-exist.
The probable solution
It is always wiser to know about things before so that one can take executive decisions confidently – when it comes to money, it is rather shocking that we leave it in the hands of others – life insurance agents, stock brokers, tax consultants, relationship managers to name a few.
The woman of today needs to dirty her hands in basic personal finance stuff. She should at least be aware of the various investment avenues available in India and what risks they carry and how much she can earn from them. She should be aware of her future requirements and should warm herself on goal based investing concepts so that she can invest in the right products for her future.
Learning opportunities are immense – for example, starting from the effect of inflation on the groceries she buys to understating how this inflation is going to effect her future money requirements.
Once she does this, she can handle her own finances when the needs arises.
Educating herself on personal finance is the only holy grail solution to women and her finances going hand in hand.
The rest are all addendum.
While investments can be done jointly with the hubby, one can even resort to doing it in one’s name. Many females like to have their personal net worth defined by the investments in their name. There is nothing wrong in that.
There are many women based products on offer today. While they are not marketing stints, a close eye needs to be cast before committing money to them.
Note that there is nothing special or different needs to be done when the women does financial planning for her family. She should understand why an emergency fund was formed and where it is. How much retirement corpus is being targeted and how much of her earnings are going into that, among others.
She should alternate with her husband in managing the family’s finance each month. Both the spouses need to help each other learn the basic stuff over a period of time.
Eventually, the woman will understand the importance of keeping aside reserves. These will be for those days when she is away from work for a long duration of time. In a sense, this is her emergency fund.
The woman of today needs to lead and take personal finance decisions in the household –
she cannot leave it to her father when she is young. Or to her husband when she is married and then finally to her sons when she is old.
And we men need to help her get there. Never mind your ego or the fact that you don’t understand her. The famous Sigmund Freud once said, “Despite my thirty years of research into the feminine soul, I have not yet been able to answer the great question that has never been answered : What does a woman want ?”
Financial Planning for Women !! Let me know how much money you intend to blow over for the love of your life. I am going to be a pauper…I have three doting ladies in my life (1 wife and 2 daughters folks !) to make happy…
Bonus read – Why women are better investors then men
@Rakesh,
Great timing of the article. I agree, Women also have to go to a lot of sacrifice, its very difficult to balance job & kids. Wishing all our women readers “Happy Woman’s Day”
Firstly, Happy Women’s day to all the women out there.
This article is highlighting the true position of women in our society as far as managing household finance is concerned. In majority of the households it is men who are managing the family finances. What is the reason behind it? Is it men who don’t want their wives to manage the finances or is it the women who are not interested?
In my case I manage the household finance but it is due to the latter reason. However, I have started educating my wife on financial planning and also trying to make her realise why it is important for her to be at least aware of everything.
The issue of women getting married and relocating due to their husband’s jobs is pretty common including mine. However, I have seen a couple of cases where men have done that too. And many cases where men respect the importance of women’s career and don’t force them to relocate. They keep on working in their respective locations. It works for some couples and it doesn’t work for others. I am sure it will evolve in the coming years.
Now women who have to take maternity break, not sure if there is any alternate to that. The new born baby needs his/her mother more than the father and I think women love to take that career break. I have colleagues who joined after maternity break of 9 months and then decided to discontinue the job because they miss that quality time with their little ones. So, I think it is worth the financial loss.
Yes, the divorce rate is on a high but in my opinion it is women who gain financially from that. The Indian law still protects women and it makes sure that women don’t have to struggle financially. But this should not be an excuse for them to stay away from financial planning; at least they should know how to plan their life with that money.
To end on a lighter note, coming to Mr. Sigmund Freud: So, he wasted his time and money studying a question that he couldn’t answer. He could very well have spent that time in learning financial planning :).
P.S. Men can consider jagoinvestor book to gift their wives today.
Vivek,
Very well written but i would beg to differ on the following point
“the divorce rate is on a high but in my opinion it is women who gain financially from that.”
Even though the court protects women and they could be financially supported but their lives become a living hell. It’s very difficult for a single mother to bring up kids. I have seen it happening to my relative and its very tough. It’s always women who suffer.
On the other hand men move on and get married and have a new life.
@Rakesh, You are taking this into different dimension. Of course divorce is not easy and it can life extremely difficult.
I am purely talking about the financial compensation part. Women are not left alone to earn and raise family by themselves. The law helps them to get a good amount of compensation so that they can start their lives afresh. I have also seen divorces and women getting good compensation.
When you said “Even though the court protects women and they could be financially supported…”. That is all I am talking about, rest all is a different discussion altogether.
@Radhey,
When you said “I haven’t heard of a single story where in the IT world, the husband quit and joined his wife at the place where she was working.”
Actually this happened in my work place. My team lead quit his job few months back to join his wife in US. But then his motive was different, they wanted to settle down there.
@Radhey In my case, my wife was more financial planning savvy 3 years back and got me glued to it. Now, roles have reversed but have to give her the credit for getting me interested in it.
@Minku, Good one Minku, this is not seen in many households.. Kudos to your wife!
@Minku, Behind every man, successful or not, is a woman, who is always successful.
@Radhey,
“Behind every man, successful or not”
Good one… very true.
@Minku,
Good to hear that your wife was keen on financial planning. It’s not too late now, you can get her involved back. Gifting Manish’s book would be a good way to start.
Nice & really a relevant article..
Women really need to be aware about important aspects of Financial Planning.. Be it a housewife or a Working lady, she is always a HomeMaker, who has to manage a household.. & a Financially Literate lady will very well be able to do that..
The necessary things are the Women Oriented programs for Financial Planning, along with a little co-opertion from the males in the surroundings by educating them about this & by lowering the Ego 🙂 (refer to the comment “Is it men who don’t want their wives to manage the finances or is it the women who are not interested”? )
(Glad to see that many (above) people are thoughful towards this move). Really Nice.
Thanks..
@Aparna,
Thanks for sharing your view. Women should take an active role in managing their finances.
@Aparna Nema, Did my comment reflect any ego Aparna? 🙂
@Vivek K,
Not at all Mr.Vivek.. Your comment was very nice.. I was talking about those people whose ego does’nt allow them to let their female family members enter the domain of Personal Finance Awareness.
The community (who is equally capable but) which has always been prevented to take a lead role in many areas, really needs support of its Male counterparts to gain awareness. & some of you people are doing really great jobs..
Regards,
@Aparna Nema, You are absolutely right Aparna when you say that women are equally capable of managing finances. I think the time is changing and it will improve in coming years.
I wish my wife takes over all these responsibilities and I can put my feet on table and do nothing… lol! But she is smarter and she is putting her feet on table and enjoying! 🙂
I wish you all the very best in learning and managing your personal finances.
@Vivek K,
Thanks..
@Vivek K, Remove the table 🙂
@Radhey Sharma, hahaha then I’d close any future opportunity for myself to enjoy as well. Let me keep trying to get the table 😉
@Aparna,
Agree with you when you say that male ego does not allow female members to manage money. This happens in more than 90% of the household. But at least this is start in a positive direction and who know in years to come Women would play an active role in personal finance. Every cloud has a silver lining.
@Rakesh,
Yes, the time is changing.. & slowly people are realising the need for Change.. Still “Women Literacy in Personal Finance” has a long way to go..
Lets hope for the Best..
@Aparna Nema, Who in your household manages it Aparna ?
@Aparna Nema, Hmm, some very good discussion going on here folks.
Keep up the good work.
@Radhey Sharma, Thanks Radhey, we need you as well to keep joining our discussions, it’s always good to hear from experts on our viewpoints.
Keep joining us! 🙂
@Radhey,
Agree with Vivek, we are missing your feedback. Seems like you are busy with other commitments.
@Rakesh, CFPs life is not so easy after all 😉
@Vivek,
Agree with you but then other professions are also too challenging and demanding. Only Government employees can have one’s cake and eat it too.
@Rakesh, I don’t think government jobs are that easy especially when there is public dealing involved. Public also treat them poorly on the counters.
If you leave the bribe part aside, their salaries are not good enough to live a comfortable life. The upper level babus might get all the benefits but lower and middle level would still be suffering. And if you include the bribe part they will always have that sword hanging on their necks, though nothing may happen but still no mental peace.
@Rakesh, I am busy with my cold and cough 🙂 Will summarize by Sunday.
@Radhey
Get well soon. What’s wrong with Puneites, they are more prone to illness. Is it got to do with the weather?
Swine flu strikes back.
@Radhey Sharma, sir hope you have your health insurance in place 🙂 although I pray that you never need it.
Get well soon!
@Vivek K,
Agreed..
@Vivek,
Yes, not all Govt. jobs are easy but there are few of them where people hardly work. One of them is DRDO. I have seen people going and signing the register and coming back home.
@Rakesh, haha true, there are offices like that. But again you need to struggle to reach there.
@Radhey Sharma,
Thanks Radhey.. In my home, the household finances are managed by me & my Hubby both. We both just started venturing in the field of Personal Finance & everyday learning new things & by mutual co-operation.
The reason of my women oriented comments 🙂 is bcoz of surrounding observations. If we set aside the group of working ladies, the condition of some Housewives in India is really pathetic wrt Personal Finances (especially in the conservative families). Many of them don’t even know the total Money Inflow in the household (forget about the Financial Planning) & when the emergency comes their way, they are helpless. Poor ladies are not even able to utilize the money deposited in different avenues. Then they are dependent on other males in their families to utilize their own money. Many frauds happens in this process.
Hope the time will change soon & Women will be equally active in Personal Finances.. 🙂
@Aparna,
Thanks for sharing your views and good to hear to you manage your household finances along with your spouse. Why not you take an initiative and train your colleagues, neighbors in personal finance. At least you can give a brief explanation and direct them to WealthWisher. Once here, they will learn by themselves.
Keep up the good work.
@Aparna Nema, Way to go Aparna! You are an example to revolutionise women personal finance. Spreading awareness is the key. Forget about what men are doing in other households, focus on what we can do to improve this situation.
@Aparna Nema, Proud to see you changing his for yourself. Keep up the good work.
@Radhey,
Agree with you, if we have more readers like Aparna who are managing their finances themselves it will be world of good and others will soon follow suit.
Wonder if we can do something to get more women readers to this forum and spread awareness?
@Vivek K, Walk on Bangalore MG Road with a placard saying “Women Readers welcome to TheWealthWisher website and win free goodies”.
On a more serious note, you know, interest in a product or thing comes from within, one cannot force someone.
In that sense, I respect your and Rakesh’s presence here. Slowly Aparna is also warming up to contributing so watch the space.
@Radhey Sharma, hahaha .. now i will never be able to go to MG road. I’d keep imagining myself with the placard.
You are right interest comes from within but some people are not aware of financial planning and the minute they are aware they start generating that interest. So, I was talking from that perspective.
@Vivek K, LOL Vivek….. If you won’t go to MG road, you may save some good money ;).
@Chirag, Small correction. If I don’t take my wife to MG road I can save some “good” money. 😉
@Radhey,
Thanks for your appreciation, i am still a novice in this field. I try my best to help fellow readers with the little knowledge i have gained in this field.
@Radhey,
Carrying a placard, hmm interesting. I think we can just spread the word through our fellow workers.
Thank you all..
I am still a beginner, have just started learning about various dimensions of Personal Finance.. The credit (for developing my interest in Personal Finance) goes to this website (which I came across accidentally) The Interesting Articles over here forced me to keep on diving deeply.. Hope to have a long & fruitful association..
Keep up the Good Work.. Thanks..
@Aparna Nema, Good to hear that Aparna, keep spreading the word although without a placard 😉
@Aparna Nema, Great Aparana, happy to see your interest in personal finanace place and your comments here.
Wish many women like you start learning personal finance. That will help the society to manage their finance better. I think personal finance knowledge is more important for a woman as without their support only male can’t execute it well. Also woman’s knowledge in personal finance space will help man in many many many many ways really 🙂 (guys am sure you agree with me here).
@Chirag,
Agree with you when you say “woman’s knowledge in personal finance space will help man in many many many many ways”.
There was a young couple with a kid who lived in my neighborhood and the husband died in an unfortunate accident and his wife did not know anything about his finances. Moreover he did not have any insurance. She had to sell this house and move to her native.
@Rakesh, Ohhhh that’s a lessson for everyone.
@Rakesh, O man! that’s very sad, hope neighbors and other family members learn the importance of financial planning from this incident.
May God bless her and the kid.
@Vivek,
Yes, life’s not fair, but we should be ready for it, we never know anything can happen. People just take life for granted. But people who suffer only realize it.
@Rakesh, The least we can do is financial planning for our family.
@Chirag, “As without their support only male can’t execute it well.”
Your GF/wife must read this !! hahaha 😉