Managing money in the midst of life s other priorities is no easy task but the Indian woman is quite possibly among the best money managers in the world. Whether you look at the smallest household in a remote village or an ultra-modern family living in the city, the Indian woman has always adopted and followed various methods of saving to cater to her family s needs over generations. However, with changing times, despite our cultural reverence for saving, women need to take on a bigger part in managing money.
When we speak about investments, insurances, buying stocks, etc. it is often only in the context of paid employees. There are schemes and guidelines for all working members with added perks from their organizations. This Women’s Day we decided to follow inclusivity and look at a people who are rarely counted among the ones in need of financial planning – Homemakers.
As per results of the most recent labour force surveys conducted by NSSO, the estimated female Worker Population Ratio (%) on usual status basis in the country during 2009-10 and 2011-12 are 26.6% and 23.7% respectively. Hence, we can see how a large percentage of women in India consist of homemakers. Often, they prefer doing small businesses from their houses to take care of the financial needs of their families.
Typically, homemakers tend to give priority to their family s immediate and short-term needs. These might include day-to-day expenses, lifestyle expenses and at the most, money spent on vacations. Long term goals such as retirement, financial security or financial independence lose out in the race to current needs. As clich d as it might sound, it is imperative that they achieve these three objectives.
Learning how to increase earnings and make use of available resources to the fullest potential can help you make the most of the pay checks and approach financial choices with confidence.
Here are a few things that can help;
Talk about finances with your spouse and actively participate in the decision making process. What are your financial goals? What are the assets? These discussions will help you plan your finances and ensure both partners are aware of the family s financial position.
Figure out the percentage of income you wish to and can comfortably save every month for the future. Ideally you should push yourself to save and invest 30-40% of the family s income. This automatically curbs additional expenses and also helps you save for emergencies and other specific needs for the future.
Don t make ad hoc investment decisions based on tips and trends. Start with setting financial goals and keep them as the foundation of any money decision you need to make.
Opt for professional advice instead of relying heavily on friends and family members. A certified financial planner will help you understand how your money should be structured, how much risk you should take, make a financial plan based on your goals and help you stay focussed to achieve your goals.
Ideally, invest through a Systematic Investment Plan (SIP). This will ensure money gets automatically debited from your bank account and gets invested in a Fund of your choice.
Learn the art of investing. Keeping your cash idle is never a good idea. You have to make your money work for you. Instead of sticking to more traditional options, see how other investment avenues like Mutual Funds can work for your financial goals.
The time has come for women to move beyond their family s savings, budgeting and basic money management, and take charge of the family s financial future. This Women s Day aims to be financially literate, set a financial goal, make your hard-earned money work for you and take a step in the direction to secure your family s future.
(By Amar Pandit, CFA and founder of HappynessFactory.in)