Four little-known insights into how women in India manage money

Published: April 29, 2019 5:04:41 PM

A recent study by investment research firm Morningstar has revealed that the number of women fund managers in India is steadily on the rise, growing at a rate of 20-30% per annum.

financial planning, women, money management, financial management skills, little known insights, invest smartlyEven with lower salaries, a majority of women are able to manage their day-to-day expenses, albeit presumably with help from the spouse in some cases.

One woeful stereotype that has persisted over the years has women unable to skillfully drive vehicles on roads or park them properly. Similarly, another prevailing stereotype of women insists that women and money management do not sit well with each other.

On the other hand, sample this. A recent study by investment research firm Morningstar revealed that the number of women fund managers in India is steadily on the rise, growing at a rate of 20-30% per year. Although they handled or oversaw only about 15% of the overall assets under management in value terms, 52% of such assets managed by women performed better than the benchmark group over a 1-year investment horizon.

Insights like this only show that women are slowly coming into their own as far as managing money is concerned and could be breaching a psychological barrier associated with money management. As a result, many persistent stereotypes of women could well be crumbling.

Let’s look at other such little-known insights into how women manage money.

Money Management: What women bring to the table

Women-centric financial services platform Hermoneytalks.com conducted a survey recently to understand how women’s minds tick when confronted with managing money and to unearth hacks that they employed. While some findings were startling, others were reassuring.

# Women invest smartly, but do not shy away from help: As part of the said survey, when asked about their financial or cash position at the end of the month, an overwhelming 67% of women respondents said they were “having just enough for their expenses (of the next month), with the remaining money invested smartly.” Evidently, this goes against the commonly-held perception that women and investments do not mix.

Interestingly, out of this group of respondents, while 41% asserted themselves to be the smartest money manager at home, a huge 59% admitted that the smartest money manager at home was their father, husband, or brother. Presumably, they took help when they thought they needed it, but ensured their money was parked in the most optimal investment vehicle, demonstrating a maturity that’s required of all investors.

# Women display empathy even under financial stress: A recent Monster survey revealed that women in India earned up to 26% lesser than their male counterparts with similar qualification and work experience. This is likely to put women under higher financial pressure.

On the contrary, the Hermoneytalks.com survey results indicated that around only 20% of women respondents said they were “short of cash and gasping for breath” by the end of the month. So, even with lower salaries, a majority of women are able to manage their day-to-day expenses, albeit presumably with help from the spouse in some cases.

Surprisingly, or perhaps unsurprisingly, out of this group of respondents which felt a major shortage of cash by the end of the month, a whopping 60% preferred to spend any available month-end surplus not on themselves but on their parents, husbands, or children.

# Women can deprioritize personal care if required: A third group comprising 8% of respondents replied they were “unsure of how to pay for next month’s personal care and entertainment expenses” by the end of the month. This meant that they had prioritized on their basic needs of the coming month, leaving only discretionary or other expenses unaddressed.

Here too, like in the previous group, a huge 50% of this group preferred to spend any month-end surplus on their families instead of on themselves. Essentially, they were willing to give up personal care expenses—something that ranks high on any woman’s list of priorities.

# Women really haven’t been able to explore their financial management skills: A minority—around 6% of respondents—felt they were “rolling in cash and didn’t know how to spend it” by the end of the month. This low number testifies to the fact that the issue may have more to do with low pay being earned by women than with their saving or expense management skills.

As India marches forward, Indian women seemed to be marching ahead at greater pace, demonstrating a rare mix of empathy and investment maturity, and squarely placing their hopes on a more equitable and gender-neutral system.

(By Hemanth Gorur, Co-founder, Hermoneytalks.com, and Managing Partner, Hubwords Media)

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