It’s not “a woman’s cup of tea !” Over the years, this thought has been repeated generation after generation. “It” refers to money matters. Until the 19th century, women were not entitled to work. Literacy spread much later. Nevertheless, women still stand backward in financial literacy. How do you define financial literacy? Straightforward. It is nothing but the knowledge of budgeting, investing, borrowing, taxation, and personal financial management.
According to a 2019, World Bank report, 'India has amongst the lowest female labor force participation rates in the world. Women make up 48 percent of the Indian population, and, 65 percent of women are literate as compared to 80 percent of men.'
‘Women’ has always been linked with myths and stereotypes about money and financial aspects. That is because traditionally there has consistently been a male figure who has taken over finances. Stock markets are also considered a male dominion! In the earliest times, ever since currency replaced the barter trade in our country, women folks took a backseat. The fact is women were rather put in the backseat when it came to finances.
Reasons given back then were that women will get married and enter a different household, so they need not take interest vis a vis the male member who will be the driving force of the family – the “waaris” aka heir. Some households did have matriarchs (female heads of the family) too who did manage finances but those were exceptions. Even then, girls were not allowed to be at the forefront. So, years of conditioning left women to rely, depend, and lean on men for managing financial matters.
Zoom into the 21st century… Vroom! Women are now heading successful business conglomerates, they are entrepreneurs, and they own successful start-ups! So, what is still choking or blocking women from being financially empowered (read: knowledge on accounts, making finances and business decisions alike!) Even today, no matter how high the position of the woman in the company, there is always a male member who will take care of audits or finances.
1. Keep track of performance appraisals
It is important to know the split-up of your salary – CTC or cost to the company, basic salary, gross salary, allowance, reimbursements, income tax deductions, employee provident fund, gratuity, and life and health insurance. When you enter a new company, knowing these elements will help in keeping track of appraisals and the rest of the performance records.
2. Know where your money is going
Keeping a written or digital record of expenditures is a good idea to know your monthly expenditures. In the older days, there were bound books or ledgers. Now thanks to digital media, we have various apps to record the same. There are digital wallets to store important financial documents too.
3. Financial goals/Bucket list
Just like a travel bucket list to visit places of interest, one must have investment and saving goals for oneself and the family. This helps not only in times of emergency but also has long-term benefits like children’s education, your health, and family health as well as
4. Role model for kids
Women can greatly influence the next generation by becoming financially empowered. Younger children will also learn the importance of being financially literate from an early age, looking up to women’s family members.
5. Financial emergencies, Death et al
In most cases, the male members take charge of the financial crisis. Women also can do the same if they have sound knowledge of legal and financial documents and records, especially where it is located. More often than not, it is when the male head of a family passes away, that the baton is suddenly passed on to the widow and other women members. The shock of death and sudden financial responsibility could be overwhelming. Financial losses in business can be managed well if women are equally involved in business transactions. They can help take over during crises.
6. Be informed while investing
It is always nice if one knows the pros and cons of investments, shares, and stocks. These days, there are brief courses and quick tutorials online on terms and how to start investing. Industry experts take courses and help with the same.
7. Choosing loans and interest rates
Most of the loans taken are for buying a house, or vehicle or for availing of student loans. It becomes inevitable to know an agency that provides good interest rates for loans. Having good knowledge about compound interests, loan structures, and the ideal time duration to repay loans, will help one select a loan effectively.
8. Effective family budgets
If given a chance, women can make sound judgments and create good budgets too. A good family budget will have a healthy mix of budgeting, saving, borrowing, investing, and taxes in the money palette. The key is to set aside a good amount of money to reduce borrowing and increase savings.
9. Reduced financial stress & anxiety
Financial literacy ensures mental peace and sound decision-making for women in the family, apart from the other family members. It is crucial women are empowered to take the lead in learning, and comprehending all matters related to money, tax, investments, saving, borrowing, and even property matters.
10. Property, power of attorney, and ownership
Inheritance is a bone of contention in most families. Now that it has been made legal for women to have a part in family inheritance (irrespective of whether they are married/unmarried), it is more important to make them aware of legal and property rights, as soon as they become adults. Knowing who all are property holders in the family, their shares, and who has the power of attorney (signatory authority for all important financial documents) is an necessary part of financial education for women and it should start at an early phase of their life. From childhood, impart financial awareness amoung kids alike.
Remarkably fewer women take interest or invest in the time to learn the basics of investments, capital, savings, turnovers, profit-loss, and running a successful business. Another flip side of not knowing about finances is making wrong business decisions or slipping into the hands of scamsters. Thanks to more downward appeal to discover financial freedom, many stereotypes and jokes pass on through generations around females failing to handle money, businesses or enterprises successfully.
It is time to stop the spread of stereotypical view concerning women. Time to learn and be better around money! Let us push ourselves and initiate to get financially literate and for achieving ultimate economic freedom. Raise your hands with me and let’s talk money.