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.

https://www.femina.in/wellness/dont-bank-on-em-228246.html

The time has come to change the poverty narrative in India

A change in the narrative to an I-want-to-be-rich one has the potential to drive the next few decades of economic growth

If you have ever found yourself wondering why the accelerator pedal is not doing its thing, and then looked down to see that if handbrake was on, you know exactly what India’s young are going through – a desperate urge to be rich, but being held back by an old poverty narrative that paints the rich as morally corrupt and evil.

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Not just a brick in the wall. See the whole wall

We just don’t get the big picture. The more I talk to people about money, the clearer it is that we compartmentalize our money lives so tightly that we totally fail to see the big picture. Every conversation with whoever I meet now swings around to money. People share their stories, their worries and their fears. They share the power equation within home that money causes. While housewives have always shared stories of the skewed power money equation, working women have equally scary stories. That’s because those who earn more than men have a triple burden—to manage work, home and the male ego. But most often the usual story is the fuzziness about how we think about money and how we simply are not able to see the whole money story.

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Kuvera.com in conversation about Let’s Talk Money

Let’s Talk Money with author and columnist Monika Halan

 

Who is the ideal reader of Let’s Talk Money? What was your motivation to write this book?

I believe that the middle class Indian who is looking for a way to build financial security is the reader of this book. All of us who live in urban India and live the urban mass affluent life are readers of this book. It is for those who know that they need better financial control but don’t know how to go about it. It is for those who are confused with the products, the push and choices out there in the financial markets. It is for those who are afraid of the financial sharks and toxic financial products and take the safe route to real assets. It is for those who are willing to spend the time in learning the basics of managing money. It is for those who want a hands-free system of money management rather than a one shot gamble at getting rich quick.

Why did I write this book? At every TV show I have done, every radio spot, public lecture or a chance meeting on the airport with a follower of my work, the message came to me – is there a book that has all that you keep saying in one place?

As I look around the book space, there are excellent books on investing or financial planning, but there is nothing that relates money to our everyday lives with all its complexities and then gives a system for hands-free money management. I believe that money issues are deeply linked to who we are. A sorted money life sometimes leads to a sorted overall life. At least that is my experience. I want to share this with others like me who are not aspiring to get rich tomorrow but are happy to build financial security one step at a time. I want people to have better control over their money. I want people to stop getting cheated by financial con artists. I want people to get their money to work as hard for them as they work to earn it.

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From Valentine’s Day to Women’s Day

I wanted some stuff and so dropped by the nearby mall a few weeks back. I like walking in a mall. It is clean, safe, there are loos unlike in most market places in India and you don’t really need to buy anything—the buzz of happy people all around is free. Buy guys, we need to grow at 8% GDP!

On this day, I’m surprised to see all the well-dressed women. Then I notice that many are wearing red. It takes ecstatic couples taking pictures around a Taj Mahal replica made fully of roses, and it clicks into place. Ah! Valentine’s’ day! So many happy people! While people have fun on this day, there is another day that I actually want to talk about.

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Good that life insurance firms go IPO

For many reasons, it is good that life insurance firms are opting for initial public offerings (IPOs). Big IPOs lead to market depth—crucial now for India because household money is finally coming to equities through institutions. It is also good for those tracking this industry because listings will encourage more public scrutiny of insurance firms through analysts covering the sector, through institutional investors such as mutual funds and pension funds, and products from this industry itself such as the unit-linked insurance plans (Ulips). It will be interesting to see which equity Ulips buy into what life insurance company stocks. Then there is the public debate that takes place around an IPO and its merits.

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4%

This is the new inflation target for the Reserve Bank of India (RBI), with a floor of 2% and a ceiling of 6%. Remember that one of the reasons for inflation, or a rise in the prices, is that governments borrow too much to fund expenses.

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Why the Wells Fargo story matters to us

We fined Wells Fargo a historic $100 million for the illegal practice of secretly opening hundreds of thousands of unauthorised deposit and credit card accounts.”

Log in to the home page of the US watchdog Consumer Financial Protection Bureau (CFPB)http://www.consumerfinance.gov/ , a government agency set up to ensure that consumers of financial products are treated fairly by banks and other lenders, and you see this as the top featured story.

What’s the Wells Fargo story and why is it relevant to us? Wells Fargo is one of the biggest banks in the US, and is known to be an aggressive cross-seller of financial products. Cross-selling is something we’re all familiar with—you have a savings account with a bank and it pushes other products at you: loans, funds, insurance, cards.

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Coming on a screen soon: all your money

Imagine this. You need to pay your life insurance premium today. You’d like to check how much of your home loan is still left. You want to start one more systematic investment plan. You want to pay your credit card bill. You want to make a contribution to your Public Provident Fund (PPF) account. You want to check the balance in your Employees’ Provident Fund (EPF) account. You want to check when your car insurance is due. To do all of these you may just call your financial planner (who you pay a nice hefty fee each year for these servicers), or you could log in to multiple sites, put in 10 different usernames, remember 10 passwords. Two of the 10 sites will make you change your password. Some may have an error message. Some transactions won’t go through. And 2 hours later, you will be frustrated and cursing this clunky financial world we inhabit.

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How good is it? How bad is it?

When I began this column in March 2009, I remember writing my first piece on the macro mess India was in and how a spendthrift government, which took an 8% growth rate and a 26% rise in tax revenues in the previous years as the new normal, messed up big time. You can read that column here: http://bit.ly/2bynE0d . With elections around the corner, money was splurged on massive loan waivers and many other let’s-give-them-money-and get-their-votes schemes. It worked and the government came back to power. The next five years got the country closer to disaster, with bank books getting stuffed with questionable loans, policy paralysis and big corruption in the central government and bureaucracy.

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