One of the strong characteristics of Indian women is the habit of saving, mainly in the form of cash or physical gold. Recently, demonetisation of high value notes by the government has revealed the tremendous capacity of the Indian women to hoard cash unknown to their family members. However, they do not distinguish between savings and investments without realising the loss they are incurring.
The money held in cash would have been doubled, tripled or multiplied even more if the same would have been invested properly in different types of financial instruments such as bank deposits, government saving schemes, mutual fund, stocks and shares and such other investments.
Another characteristic of Indian women, thoughthey are working and holding senior executive positions, is to rely on their fathers or their husbands to take financial decisions.This dependence makes them vulnerable and disempowered in day to day life. Taking responsibility and control of your money is one of the big steps to feeling empowered.
Yet another characteristic of Indian women is that they are unaware of the investments, financial liabilities, insurance and other financial decisions of the family. There are instances where after the sudden death of the husband the lady hardly has any idea about where and how her husband had invested when he was alive. To avoid such situation, women should insist on being part of financial planning process for the family from the start.In India, on an average women live couple of years more than men. With the result most women live alone for a few more years. Since, they relatively less knowledgeable about finance and investing they face problems. So, it is important that women start learning about investing and participate in the family’s financial planning process.
All these issues can be resolved by enhancing the financial literacy levels of Indian women. This is not very complicated and does not require one to go and take a long duration course in finance. There are some simple measures one can adopt to enhance knowledge about personal finance and investments.
n Irrespective of your age, you should take first step in the financial independence by personally visiting banks for deposits, withdrawal and other transactions.
n Learn internet banking to carry our bank operations from home. In the process you will learn lot of things about banking, cyber security, password protection etc.
n Use ATM cards, credit cards freely. This will boost your confidence.
n Meet you family tax advisor, financial planner, legal advisor in person to keep you updated with the latest position. This will help you to understand where your family stands financially to live within means.
n In this world of show business in Goan closed society, men tend to hide their real financial position about earnings and borrowings. Be aware of your husband’s earnings and financial liabilities.
Based on this information, you should identify your family’s short term, mid-term and long-term financial goals in close consultation with family members. Now the next step would be to plan and execute the same.
n Your first priority should be to have adequate insurance cover on the life of your husband on whom your family depends to secure your and your children’s future in case untimely death. Ideally, insurance cover should be 15 to 20 times of your annual expenditure. You can have “term life policy” for this amount which has minimum cost. In case, your family is financially dependent on you, your life should be covered accordingly.
n In case you are living in rented house, plan for your own home. To encourage women to have houses in their own name financial institutions offers concessional rate to women buyers. Irrespective of this, you should ensure that your name is included as joint owner of the property. Apart from emotional security, house provides appreciation in value.
n If you do not wish your children to fight over property after your death, execute a will. A will is a legal document which provides the manner in which a person’s property will be distributed after the death. Will can be executed on the plain paper in one’s handwriting in the presence of 2 witnesses. No stamp duty is required. Register will help for smooth inheritance and clear title.
n Create emergency fund, education fund, marriage fund for your children through systematic investment plan in mutual funds. Build adequate retirement fund through regular savings to live happily in old age without depending on your children. Discuss this with your financial advisor.
n Learn about investment in mutual funds, government securities, stocks, real estates, gold etc. This is a slow learning process. At parties instead of gossiping on trivial matters with your friends talk about money and investments, read investment magazines regularly. Lot of material on investment matters is available on internet to upgrade your knowledge.
n Ensure that your name is registered as nominee in all bank accounts, life insurance policies, mutual funds, housing society membership etc.
n Have an adequate health insurance cover which will take care of medical needs of the entire family.
There are many other things that women should carefully follow if they avoid getting into financial mess. I have listed some of these matters for you to follow.
n Do not sign any blank paper even if requested by your father or husband.
n Do not give general power to anyone including brother, father or husband unless required for specific purpose.
n Do not stand surety or guarantor for any type of bank borrowings even for your own children.
n Donot share your passwords.
n Do not sign any paper blindly unless you have understood its implications.
n Do not get emotional and gift or transfer your home in which you are residing to your children during your lifetime.
Apart from all this, remember that health is wealth and is integral to financial wellbeing. Woman being foundation of family should take care of their health with proper diet, regular exercise and healthy lifestyle with composed temperament.
International Women’s Day should be celebrated to empower women with proper financial literacy.