Marrying a man is not a financial plan.
While we celebrate
women’s achievements on International Women’s Day, it is a timely reminder to
talk to women about financial matters and look at smart ways to gain financial
independence.
Women are great savers but are somehow
reluctant to take the plunge to invest to build wealth. They are generally perceived
to be risk averse and more conservative in their investment approach and may
largely prefer debt to equity, with post office RDs and FDR, being their
favourites.
According to a report
by UBS Global Wealth Management, Women worldwide tend to adopt a traditional
approach in managing finances, where they defer to their spouses to manage
critical, long-term planning.
Globally, 85% of women
are highly involved with the short-term finances of their families, such as
daily expenses, budgeting, and cash flow. However, 58% also leave decisions
about retirement planning, insurance, and long-term care to their husbands.
The most frequently
cited reasons include: “I think my spouse knows more about this topic than I
do” (82%); “I focus on other responsibilities” (79%); “My spouse is the primary
breadwinner” (78%), and “I’m not interested in planning and investing” (68%).
However, The demographics of women have
changed rapidly in the 21st Century. Women are now a prominent
component of corporate India and the global business landscape. Their emergence
as leaders, entrepreneurs, and innovators has made them an integral part of our
country’s economic health and the future of global business. More women are
taking stewardship of family and business finances.
In very recent times, women have taken
leadership position in most of the leading Indian Private and Public sector
Banks, apart from other industries. Most business channels have women anchors
and news editors who are doing a commendable job in enhancing financial
awareness and bringing financial news analysis to our living room.
Women also are often seen as intuitive,
thoughtful and compassionate, and can use these qualities to their advantage as
they plan for the future.
In our experience of interacting with
several women investors, they strive to be financially independent and
financially literate. Women are a lot more data rational and do not make
investment decisions on a whim. Instead, they require a lot of details about
the product before they commit. Women tend to be more long-term investors and
have a more disciplined approach. They also have a more rational approach
rather than emotional when it comes to prioritizing goals.
While men approach markets with return
maximization approach, women want risk minimization. We feel, it is the lack of
knowledge that makes women risk averse. Many women feel intimidated and don't
want to participate in financial planning or management but in our experience,
they handle volatility better than men, when they have knowledge.
In our opinion, women are not necessarily
risk averse but see the future with more caution than men. So, women see needs
and give priority to goals for emergency funds and insurance to handle
unexpected setbacks.
They are more disciplined and committed to
the financial goals and more concerned about the financial future especially
related to contingency fund, children’s education and retirement planning.
We always try and meet our clients with
both the partners present, during discussions regarding financial goals and
reviews. We also prefer the ladies joining their spouse in IAPs (Investor
Awareness programme) that we conduct regularly for families. Their presence
ensures that we need to do lesser amount of follow up to enable investors to
start their investment journey.
We’ve always been passionate about
encouraging women to take an interest in their money, rather than taking it for
granted or surrendering the responsibility to a partner.
Having seen friends struggle to make ends
meet when the unexpected happens, we know first-hand how important it is to
have an independent understanding of finances. This is especially true given
the fact that women face a unique set of challenges compared to their male
counterparts.
Women, more often than men, interrupt their
careers to care for children, aging parents and grandchildren. Being a caretaker
can save money but it comes at a huge cost, if care giving displaces a stream
of income that a woman has to give up.
Women needs are different when it
comes to financial planning and the main reasons for the same are; Women tend
to live longer than men, (According to United Nations
population estimates, the life expectancy for women in India is 69.8 years
compared to 66.8 years for men.)
Women earn relatively less, as there is an
income disparity between the wages for men and women, (women
earn 20% lower than men, according to the Monster Salary Index (MSI).)
They also tend to spend lesser time in the
workforce, have to take forced sabbaticals due to maternity and raising a
family, taking care of the elderly etc.
Is money Important?
Yes, ladies, money is important because it
gives you options, because it enables you to have more control over your life, more
freedom to carve out your own path and less constraints on your choices. Having money enables you to live life to the
fullest, Money buys you a more comfortable lifestyle,enjoy adventures and
textures and tastes, and to make the most of the ~80 years you’ve got.
“Wealth is not about having a lot of money, but having a lot of
options.”
Hence, Create wealth for the financial independence it gives you,
for the freedom it gives you to follow your passion, to do what your heart
desires, to face the world of uncertainty in this era of disruptions and
change, and also to leave a legacy or contribute to society.
(Check out our
earlier blog on the subject, https://www.sahayakassociates.in/resources/our-blog/2553-sahayak-associates/sahayak-associates-blog/8172-is-money-really-important)
Our sincere advise for
all ladies, especially on this wonderful day is, As a
young girl you may have watched your father take independent financial
decisions for the family, as your mom remained quiet, but in present times,
kindly be more assertive in matters of the wallet.The
time for financial empowerment of women has arrived; you just need to focus on
it.
Please understand your
needs, financial requirements and what motivates you. Take charge of your
finances today, Ask questions, and think about the
details of your current financial situation and how your decisions might affect
your financial planning now and in the future.
Gain financial
knowledge, understand the options available, don’t ignore risk, and above all,
be aware and involved in all financial decisions of the family and always be present
in all financial discussions your husband has with his financial advisor
Finally, let me just reassure you, that you
lady, with your disciplined and rational approach, will definitely end up doing
a better job than your spouse, when it comes to family financial matters and
planning for the future. As in all matters, you are not only equal but also
superior to men in financial matters.
However, remember that, gaining financial
knowledge and understanding the options is the first step to financial
independence. Please don’t start on the journey and don’t take the car on the
road before learning to drive.
A toast to all the lovely ladies, celebrate
the elegance of Womanhood,
Here is wishing you a Very Happy &
Prosperous Woman’s Day!
Happy Investing!!
Stay Blessed Forever
Sandeep Sahni
You may contact us
at:
91-9888220088,
9814112988
Follow us on:
www.sahayakassociates.in, www.facebook.com/sahayakassociates, www.twitter.com/sahayakassociat, https://www.instagram.com/sahayakassociates/ https://sahayakgurukul.blogspot.com
Note: All
information provided in this blog is for educational purposes only. They don't
constitute any professional advise or service. Readers are requested to consult
a financial advisor before investing as investments are subject to Market
Risks.
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