Working Women and Finance

In India considering the total Women Population of 70cr, 20cr women lives in Urban area and 50cr women lives in rural area. Working women in urban area is 9cr.  However it is alarming that only 2cr of women are financially literate.

The Importance of Financial Literacy among Women in Today’s Time

In this modern age, we see women leading at every possible front. They are now more informed and educated and are confident enough to make their own decisions. They are masters of multi-tasking with juggling their careers and households at the same time. While they make their continuous progress, women should also pay a special attention to financial planning. This is one area which often takes a back seat in a woman’s life. Financial planning for women is a critical aspect for them to reach their personal as well as professional objectives, without being dependent on anyone.

Improving Financial Literacy among Women

Financial planning is not a rocket science. It is more down to habit, discipline and careful management of your hard-earned money. Because of the limited exposure, women previously were not aware of the simple ways that contributed in successfully managing the finances. Today, one way to tackle this is taking more interest in the subject and being aware about the basic things that build a solid financial foundation.

Investing is Easy! You Must Do It!

Investing is now becoming the most preferred way of investing. Generally, investments and other financial matters are handled by the men in a family. However, due to the digital revolution, this trend is also slowly seeing its downfall. Investing in today’s time has become extremely easy. It is now almost paperless and hassle-free and there are so many different options available for investment. For a working woman, her salary usually sits idle in the savings account. With the help of sound financial planning and investments, that money can generate great returns over the course of time. One such option to invest the money is investing in mutual funds. Mutual funds offer a broad range of investment options and are highly flexible in nature. Investing in SIP is the best way to save money as well as generate good returns. On the other hand, for a housewife, she is usually dependent on her spouse for financial matters. In such cases, these women can save up from their monthly budget and start investing. A simple SIP of INR 500 can turn out to be beneficial after considerable time.

Financial Independence

One of the biggest reasons why women need financial planning is to be financially independent. With a sound plan, they can march confidently towards their personal and professional objectives without worrying about the financial implications. Also, it prepares them for any crisis in the future as well as raises corpus for retirement. Thus, it is high time for all the women to take active role in financial planning and take complete control of their finances. It is the first step towards achieving that coveted financial independence.

How beneficial it is know about finances?

Everyone has been talking about women’s empowerment. Multiple initiatives are being taken by governments, civil societies and private organizations at all levels to ensure full participation of women in economic life to build stronger economies. The recently released Economic Survey document in India was in a pink cover in order to show the government’s commitment and solidarity to women empowerment and equal rights. True equality of rights and opportunities comes with financial empowerment. However, numerous social, economic and cultural barriers including the patriarchal legacy come in the way of financial empowerment of women in India. Not just rural women, but women in urban economically well-off situations display lower financial literacy levels than men. With only 20 percent of women being financially literate, 77 percent women depend on their spouse or father for investment decisions. An effective financial education curriculum can entail:

  • Imparting financial literacy as a standalone subject or integrated into subjects including Mathematics and economics. 
  • Building a strong fraternity of teachers to explain concepts to students. Trainings, mentorships and workshops on financial concepts will make the teachers competent enough make younger generations financially prudent.
  • Evaluating the effectiveness of financial education programs by reaching out to students. In conclusion, we must understand that financially educating women generates a multiplier effect in having a substantial impact in disseminating financial literacy to the future generations.

Thus, a conducive financial landscape with a blend of a favorable regulatory regime, innovative women-centric products/schemes, enhanced mobility, robust customer protection framework and reformed attitudes towards women will increasingly stimulate women to be well equipped with financial skills. This will, in turn, encourage a rise in women’s foray into the workforce and yield success for the Indian economy.

Time Management and Balancing for Financial literacy

A popular term swamping the internet is “Financial Literacy”. With millennials coming into their own, being financially literate is of paramount importance.

  • Financial literacy understands how money works: how you make, manage, invest and expend it. It encompasses a wide variety of scenarios from balancing a cheque book and understanding personal tax to make personal budgets and analysing investment options and market trends.

Increase familiarity with your own finances

No amount of reading, lectures or apps are going to help if you don’t put your learning to practical use. The best way to ensure that is to go over your own finances and try and implement the tips learned. Financial literacy depends on mindset and habits as much as theory, thus it is imperative to make your own budgets, manage debts and plan for the future. As they say, an ounce of practice is worth a ton of talk. Financial literacy helps you make balanced decisions. So, be financially literate and secure your future.

Tips: How to read salary slip:

Your basic salary is critical as most of your allowances will be based on that figure.

  1. Look for special allowances and check whether they are performance or event based.
  2. Do not focus only on the in-hand salary.
  3. Look at the other benefits the company provides (health insurance, accident insurance, free food, bus transport, better career growth) which might outmatch a higher in-hand salary offer from some other company.

How to do tax planning:

  1. Look at your salary slip closely
  2. Take a good look at the Section 80C mandate.
  3. Avoid last-minute tax planning
  4. Invest to meet your financial goals
  5. Have a look at other sections as well

How to secure working mothers future and child planning

  1. Make a budget and start saving
  2. Frame your financial goals
  3. Invest in right instrument
  4. Maximize tax savings
  5. Opt for right insurance

How Woman in the family can contribute

Today, inclusion is key in every other aspect of life, and the sooner we recognize the value women add to our understanding of the economy, the better we will be, at coming up with unique ways in tackling the same on a micro economic level every day. The past decade has seen a number of women get leading jobs in the finance industry.

Indian women have started earning decent money and thus becoming financially independent. As a woman manages the household expenses she is the one who can manage investments and retirement planning. Women must learn to budget, prioritize, save for retirement, protect themselves and their families and get financial educations.

By taking a more active role, women will gain more clarity, confidence and control of their lives. To do so, women need to learn as much as possible about money. Women must learn to budget, prioritize, invest for retirement, protect themselves and their families and get financial educations.

As per the National Sample Survey 2011-2012, the Workforce Participation Rate at an all-India level is 25.51 percent for females as against 53.26 percent for males. This results in weak economic and decision-making power for them within the household. This huge lacuna, however, also provides an opportunity to change the narrative. For this, women need to be educated on the importance of institutional savings, avenues of subsidiary income and ways to avail institutional credit for micro activities. Financial literacy can empower women to develop a financial identity even with their small and micro household savings, and help them to get access to formal credit for gainful occupation giving them economic freedom and power. Financial literacy can motivate women generating sustainable income through micro activities to wholeheartedly use financial systems and institutions and slowly create a ground for their graduation to higher income opportunities. Embedding financial literacy in programs where women have significant representation could be a good starting point.

We also need to innovate and use technology to deepen financial literacy amongst women. Physical distance from the financial literacy contact centers and trainers and the socio-cultural contexts are major impediments in extending financial literacy to women. Therefore, there is a need to use interfaces that allow women to access financial literacy easily, conveniently and without disturbing their contexts. India has witnessed revolutionary penetration of mobile phones even in the hinterlands. We need to ensure that every woman who owns a mobile phone or has access to one is able to use it for educating themselves and managing their own finances. India will truly become Digital India when every woman has access to mobile devices and is able to use these channels for their own empowerment and gaining economic freedom.

“Feminism isn’t about making women stronger. Women are already strong. It’s about changing the way the world perceives that strength” – G.D. Anderson. The quote speaks a lot about the reality of the concept of feminism. Everything related to women in this world comes down to one word ‘perception’; perception not only about the different roles played by them but also of the responsibilities expected from them at various podiums. And it is the perception that forms the foundation for the much needed gender disparity. It also speaks about the changing roles from home makers to home financers and ultimately to financial advisor.

Today’s world is changing. Women, who were once seen only as a daughter, a wife, a mother, and a home maker are now seen as an individual who are not only home makers but also home financers.

My First Question: Are you actively taking interest in your family financial planning? Whether you are working, non-working, mother, wife, daughter, sister how strongly are you involved in the financial matters in your family. If not!! It’s time to think and change your perspective.

It’s very alarming that in 70cr women in India, approx 3cr are working mothers in urban India, out of which hardly 10% are financially literate. Hence my 1st suggestion to all my dedicated dear super moms is that start thinking about financial freedom for yourself because you are earning and there is full probability that we will live longer than our life partner.

It is very important to know on what level you are placed in understanding the financial planning.

Being an earning member and receiving salary every month it is crucial to know how to read your salary slip. Tips: Understand about basic salary, check special allowances whether they are performance or event based, other benefits provided by the company (health insurance, free food, transport, career growth etc)

How properly tax planning is done? Tips: Take a good look at section 80C, avoid last minute tax planning and have look at other tax saving section also. One of the better options available in tax planning is ELSS, which can save tax, give tax free returns, and at the same time grow your money too.

Mother’s don’t get scared, that financial planning is difficult to understand. According to me nothing is impossible for all of you, super working women that too Mothers.

Financial Planning is nothing but planning, patience and time management. And there is no 2nd thought that being a working woman you have already mastered all the 3 qualities. Hence you have the potential to create wealth for yourself and generations too.

Lives always throw surprises either in positive or negative. So protecting yourself is also important against financial odds. We usually advise all the husbands to take term insurance for their wife’s. However you being working and in case having dependents like parents and kids than you must take term insurance for yourself. I even strongly insist every woman to draft a will so that there is no legal dispute in the future and also take cancer specific mediclaim.

We know how to plan our investment, however is that the right way and major question arises is how much to invest? There is a very simple formula- 50:20:30 i.e. 50% of your income should go towards living expenses, 20% towards investment towards short, medium and long term goals, and 30% percent for your personal luxury. Individuals may tweak the percentage according to their age and circumstances

Short term Liquid fund is recommended as it can also be used during an emergency. For fulfilling your medium and long term goal SIP is the best way.

We should plan about asset allocation which has to be according to the nature and goals of an individual. For example if a person is moderate the following is the ideal asset allocation:

 50% in debt fund, 30% in Equity/Mutual Funds, 10% in Direct Equity and 10% in Gold


For more details please contact: www.alpashah.in | empower@alpashah.in

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