Here are a few steps that the urban woman should take to be in charge of her money and achieve financial independence.
By Raj Khosla
Numerous studies have shown that women have just the right attributes to be good money managers. They are more diligent than men when it comes to saving. As investors, they are more patient and circumspect. And as consumers, they bargain hard and usually bag the best deals. Despite this, women in India are often relegated to being cashiers who manage the household expenses. They seldom play an active role in their family’s financial decisions.
This needs to change. Women need to be more assertive and get involved in critical financial decisions. From being passive cashiers, they must become active influencers and policy makers in the family. Here are a few steps that the urban woman should take to be in charge of her money and achieve financial independence.
1. Don’t evade money matters
A lot of women deliberately don’t get involved in financial matters. Some indeed find the subject difficult but many others keep off because they don’t want to challenge the decisions made by male relatives. So, before she gets married, a woman’s money is usually handled by her father or brother. After marriage, the mantle falls on the husband and later, her son.
Many would not see this as a problem if the money is managed well. After all, the basic objective is to optimise returns, right? Wrong. The problem is that the woman usually has no idea how and where her money is being deployed. An individual should not let somebody else take these decisions without her knowledge. After marriage, as an equal stakeholder in the family unit, the woman should not only have complete knowledge about how her money is invested but should get actively involved in money matters pertaining to the family. By staying away from discussions on money, women are ceding precious ground.
2. Learn basics of money management
To use a cliche, money management is not rocket science. It may sound dense and intimidating, but it is simpler than many of the tasks that women perform on an everyday basis. You don’t have to take a deep dive–even a basic understanding of how different investment products work is more than enough.
You should know how mutual funds work and which type of fund suits you best. Learn about the different types of life insurance and the medical insurance your family needs. Find out how to operate your netbanking account and plastic money and the basic safeguards against scamsters. Learn about interest rates on loans and the tax benefits some loans offer.
3. Buy property jointly
When somebody buys a house, the whole family pools in resources for the purchase. But the property usually gets registered in the name of the husband, who is the primary borrower of the home loan. Whether the wife also contributes to the EMI or not, she has a rightful share in the property because her salary goes into other household expenses.
However, this contribution is seldom appreciated and rarely acknowledged. The only way to put a legal stamp on the woman’s contribution is by getting the property registered jointly in the names of both husband and wife. This will also safeguard the interest of the women in case the relationship sours. Many states in India encourage joint ownership by charging lower stamp duty if the property is registered in a woman’s name. In Delhi NCR, for instance, woman home buyers pay 4% of the sale deed value as stamp duty while the normal rate is 6%.
4. Know your family’s finances
Women should also be aware of the assets purchased and of the various investments executed by family members. Whether it is an insurance policy for saving tax, a fixed deposit in a bank or a mutual fund investment for retirement, be sure that you have all the details. For the larger good, men must be encouraged to share this information with their wives. What is the value of an insurance policy if the beneficiary is not aware of its existence?
Not only that, women must make sure that they have been duly named nominees in these investments. If something happens to the husband and his bank account and other investments do not have a nominee, the wife will have to spend a lot of time and money before she can get access to the funds.
5. Take advantage of women-specific products
The financial services industry has designed many products and services beneficial to women. These include lower interest rates on loans for buying a home or car, going for higher education or setting up a business. Find out about women-specific products when you buy a product or service. You might stumble across a great deal or a fabulous discount.
Personally as a son, husband and father, I’ve thoroughly enjoyed equal gender participation in financial matters and have luckily witnessed the benefits thereof. Happy Women’s Day !
(The author is Managing Director, MyMoneyMantra.com)