Dont Bank On ‘Em

What’s holding Indian women back from being financially independent? How can you break out of that mindset? Ritu Ailani finds out

Almost every young Indian woman wants to be financially independent, yet so few are the gatekeepers of their own money. Their quest for financial independence often ends at getting a job, contributing to family expenses and spending on whatever they want – clothes, cosmetics or expensive coffee – without being answerable to anyone. The money left over used to be stashed away in steel almirahs. Today, it’s parked in fixed deposits. And both these are inept financial moves.

Women Come Late To The Pay Party

Private banker Sudha Wariar, Lead Executive Director for Offshore Investments at Torus Wealth Private Limited, has had over 20 years of experience working in the Middle Eastern market, and countless interactions with women from non-finance backgrounds, including at a recent webinar she conducted for Dheya Career Mentors on money management. Wariar observes that the reluctance to take charge of money probably comes from the fact that earning money, in itself, feels like such a huge accomplishment to women that they hardly think about what to do with it.

Women Come Late To The Pay Party Private banker Sudha Wariar, Lead Executive Director for Offshore Investments at Torus Wealth Private Limited, has had over 20 years of experience working in the Middle Eastern market, and countless interactions with women from non-finance backgrounds, including at a recent webinar she conducted for Dheya Career Mentors on money management. Wariar observes that the reluctance to take charge of money probably comes from the fact that earning money, in itself, feels like such a huge accomplishment to women that they hardly think about what to do with it.

It’s Time To Redefine Financial Independence

Dipti Periwal, professor of MBA in Finance at BRIMS Thane, Maharashtra, and a PhD student with a focus on working women and their investment decision-making, agrees. “Earning money isn’t enough. Unless you actively make decisions about what to do with the money earned, you’re not financially independent.”

You must think about your future needs more than your current ones; be frugal with your expenses, so that you can not only save, but also invest in assets that multiply your money even while you sleep. Financial independence has less to do with splurging, and more to do with having an emergency fund that ensures a crisis like COVID-19 doesn’t decimate your savings overnight. It’s not about chasing get-rich-quick schemes, but building generational wealth. It’s about living a life that is not dictated by a pay cheque, a life where you’re free to pursue your real hobbies.

Financial management is not an option, but a life skill. Women tend to ignore it, and then scramble when stuck in a tight spot – a debilitating illness, the death of the breadwinner in the family, or a divorce, occurrences that are more common than we imagine and hit us out of nowhere. Whether you’re a working woman or a homemaker, actively participate in your family’s decisions on the financial front.

Are You Guilty Of Disinterest?
Having been deprived of financial knowledge for the longest time, women still undermine their own capabilities in this domain. Periwal, for instance, shares that even though she’s more academically qualified than her husband and teaches finance at a post-graduate level, she feels the need to consult him on every little financial decision she makes. It’s not like her husband enforces this or that she’s less informed, but getting his stamp of approval seems important. “My wariness probably comes from my mother, who never dealt with finances her entire life,” she explains. “Although I am a little better off than her in that aspect,
my children might pick up certain unspoken cues from my behaviour. We have to make conscious efforts to break the chain.”

If you’re an Indian woman who’s still under confident about managing money, think about how efficiently you run your life, or even your family’s life. Give yourself credit for your budgeting, bargaining and saving skills. Now transfer those chops to financial management.

Take Charge

Monika Halan, a personal finance expert and author of the best-selling Let’s Talk Money shared these simple steps for women to take charge of their finances:

Start by changing your attitude. If you find yourself saying “I have no head for numbers”, “I don’t understand money” or “It is too tough for me,” know that you have bought into a gender stereotype. Make financial independence a priority and set goals for yourself to achieve it.

Set up a cash flow system. Start by creating three bank accounts. Your salary account is where all the money comes into your life. Call it an ‘income account’. Move what you might spend in the month to the second account – the ‘spend it account’. All your spending happens from this account – payments to your credit card, wallets, BHIM – everything. This way you can put a cap on your expenses of the month. The money left over in the income account must go into the third account – the ‘invest it account’. Don’t fret about investments at this point. Simply practise separating your expenses from your savings.

Start an emergency fund. In six months, you should have a nice build-up of money in your ‘invest it account’. Use it to start an emergency fund. Build a balance of six months of your monthly spends. Put this money in a fixed deposit or, if you already understand debt funds, in one that is low on risk and duration. It’s after you have created an emergency fund that you can educate yourself on short-, medium- and long-term investments.

Do this to take the reins of your financial future in hand. As they say, the best time to start was yesterday. The next best time is now.

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