In India, traditionally, all financial decisions – including investment decisions – are generally taken by men. This is in spite of the fact that more and more women are joining the workforce and are even heading some business groups.
In India, traditionally, all financial decisions – including investment decisions – are generally taken by men. This is in spite of the fact that more and more women are joining the workforce and are even heading some business groups. Indian women have started earning decent money and thus are becoming financially independent. However, financial decisions are still being taken mostly by their fathers or husbands. There are many reasons for the same, including the historical reasons of the Indian society being patriarchal. This needs to change looking at the changing environment around us.
Advent of new financial products
Traditionally, Indians have been investing in traditional products like land, gold jewellery, life insurance and bank fixed deposits. Since the making and maintaining such traditional investments did not require any major analytical ability, there was nothing which the Indian women could have contributed earlier. However, with the advent of new financial products like mutual funds, which need to be actively monitored and reviewed, women need to be be actively involved in the planning and implementing stage of the family’s financial plans.
Nuclear Family form gaining currency
The old Indian tradition of joint family is coming to almost an end due to various reasons like rapid urbanisation and new generation not joining the family business and opting to take up employment in far away places, including abroad. Due to this situation, parents are most likely to spend their old age alone. So, it has become more important for women in India to start taking active interest in the finances of the family at every stage. In the eventuality of the spouse of any woman passing away before her financial literacy and actively participation in all the stages of financial planning and its execution will come handy to her and will help her manage the life and finances properly and confidently.
Role Indian Women can play in Financial Planning
Since the household expenses in Indian households are generally managed by women, it is she who can give proper inputs about the actual household expenses which need to be factored into the various facets of financial planning like investment planning and retirement planning. She can also help the family in planning for the contingency funds which the family may need. Her active participation in the financial planning process will convince her, say, about the futility of investing in gold jewellery and thus channelize the investments into more productive avenues and thus help improve the finances of the family.
(By Balwant Jain, tax and investment expert. The author can be reached at email@example.com)