Women have been known to pass the baton back to men when it comes to handling money in the recent past. A recent survey conducted in USA in March 2020 concluded that, “Women under-engage with their finances, although they control more than $20 trillion in wealth”.
However in Indian households, for as long as we can remember, while father’s earned the money, it was the mothers who saved it. On pay day, very ceremoniously, most men would come back home and pass the money to the ladies who would then sit down and section it into multiple expenditures such as rent, electricity, school fees, monthly groceries, milk man, newspaper, miscellaneous and the remaining amount would find it’s way into a vault or the proverbial rice jars in some parts of the country. The sheer fact that while the men earned the bread it was the women who decided how to serve it, was a kind of empowering we have seen diminishing in the recent times.
For centuries, women have been known to be financially sensible and more capable of saving in comparison to men. Transitioning into a digital space now, however, the statistics are drastically skewed. Most finance apps record on an average, a whopping 70% or more male user base and 27% or less female user base.
By taking control of their finances, everyone can be not only individually strong, but also strong partners and strong members of their very own communities. However, for women it’s more important. Financial independence is more than a matter of strength; it’s a matter of necessity. Statistically women live longer than men and earn less. According to studies conducted in 2018 by the Bureau of Labor Statistics, median weekly earnings for full-time salaried women are just 81 percent of what men earn. To top that off, women are often faced with discrimination in terms of wages and advancement opportunities. All of which means we have to work harder, save more, and be their own advocates.
More women are encouraged to take charge of their finances as an important step in negotiating a better situation for themselves as well as their families. Financial independence is empowering. By taking charge of finances, they are taking charge of their lives. Here are some ideas on how to do just that.
Women usually put others’ needs first, however, when it comes to retirement, you need to prioritise yourselves. Take charge of your own financial future by taking full advantage of a company retirement plan. Contribute at least up to the company match, and more if possible. The point is to save as much as you can, as soon as possible. It is ideal to save anywhere between 10–15% of your annual salary in your twenties, 25–35% in your forties and 50–75% in your fifties. You need to be prepared!
Make your money work for you
You will need to make the most of your money, especially invest. You might not want to take risks, it’s understandable. However, there’s also a risk in being too cautious. Not investing could mean a potential loss in long-term gains that could help you achieve your financial goals. For long-term goals such as retirement, having a diverse investment portfolio tends to beneficial.
Talk to your advisor
Having an advisor can prove to improve your confidence in managing and investing your money. Especially when you start out, financial advisors can play the role of a personal trainer for your finances. They can help you see the bigger picture. Many a times, women prefer female financial advisor; gender aside, your advisor should be someone whom you can communicate easily with. Now-a-days, you have your advisor in your pocket. Apps like Finin provide you with hyper-personalised insights based on your lifestyle.
Plan out your finances
Financial planning goes way beyond just saving and investing. You need to have a holistic view of where your money is and how you spend it. Creating budgets help you develop a financial roadmap for yourself and follow a plan of action.
Financial independence isn’t about the amount of money you have. It goes way beyond having confidence in making financial decisions and being completelyin charge of to take control of your financial lives. By doing so, there can be a better balance in terms of gender equality when it comes to Financial Literacy. This women’s day, take the first step into Financial Independence by downloading the Finin app.