A Woman’s Money

Financial freedom does not guarantee sound financial planning

By: Tavaga Research

Anecdotes and research agree on one thing — women in the country have a different approach to finances than men. Studies and financial planners time and again raise how women are reticent to discuss their money matters. We are known to be risk-averse and at times, can even miss the risks involved.

If we look around, cautionary tales spring up, urging us to be a little savvier with our money. The tale of the wife who let the husband plan for a rainy day, and then had to separate. Of the woman who was inadequately insured, thinking it was enough. Of the skilled professional hitting the all-too-real glass ceiling, forcing her to start her own business from her retirement savings. Of the expecting mother staring at the need to quit her job, despite the imminent mounting expenses because of her employer’s inflexible arrangements.

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All of us, women and men, run the risk of lax financial planning. But for women, a slack approach can be more damaging because of a host of reasons. Here are some to mull over:-

More breaks

We tend to take more breaks than men in our earning careers. Women are still the primary caregivers in society and a recent Oxfam study shows how much unpaid work we do. Women are the first up to taking care of a loved one by withdrawing from her pursuits. And, then there is motherhood.

From prepartum to postpartum, the journey can surprise us with the resources and time required, making us take a backseat in our careers. Getting back is fraught with compromises such as lower pay, less stature etc.

Pay gap

It is all over the world. From the glitziest of professions to the most technical of fields. When regular income itself can be lower than our peers who are men, it is akin to starting the race with a disadvantage. Being more structured, careful and rational about our finances then becomes a requirement much like that bottle of pepper spray in the purse of a girl travelling alone in Delhi. Extra but a necessary precaution.

Unemployment

The news at the end of last month would have made us break into a sweat — unemployment rate in 2017-18 was at a 45-year high at 6.1 (source: National Sample Survey Office). For women in urban areas, it was as high as 10.8 per cent. Another McKinsey Global Institute report talks of 12 million women losing their jobs to automation by 2030. Men would too, but our numbers are alarming. Saving for emergencies and retirement gain even more urgency, in this light.

Glass ceiling

It refers to unwritten, unsaid barriers that keep women from progressing in a field or a job. Its presence translates into a break in earnings or advancement, not faced by men. A financial cushion can make it bearable when one hits the glass ceiling.

Not negotiate

Women have been known to be more reluctant to negotiate on the money. Be it her salary (undervaluing her worth, wary of appearing greedy), discounting her achievements for perks or asking for money lent to a family member.

A glint of gold

The allure of gold jewellery as an investment can be misleading. Women tend to think of it as serving the dual purpose of adornment and investment. However, with smarter ways to invest in gold nowadays, the latter does not hold water.

Wariness

Financial planners talk of women discussing less of their finances than men. They are not as willing to talk of missteps. But taking the help of a good financial planner can stand us in good stead, especially since very few in India do (only 12 per cent of investors in India). For eg, one could guide us with the right amount of risk suited to us.

We have come a long way, of course, in managing finances, both in our homes and at work. Many of us are investing our own income, buying property, enjoying sizeable disposable income and building our savings. Surveys like these talk of encouraging trends. Eking out a kitty for ourselves is no more a herculean task.

But it does no harm to review our discipline every now and then to remain financially nimble.

Our blogs, from the best ways to invest, investing and saving, 11 things to remember when investing to learning from others’ mistakes, could be a good starting point for those among us looking to get on the right track for managing our money.