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| Capitalstars Investment Advisor |
While most women manage the household and take smaller financial decisions, the bigger decisions are typically left to the men. Another reason for low literacy is the deliberate exclusion of woman from financial matters by men to retain an upper hand.
At any stage of life, be it before marriage or after, the prime reason for women’s dependence on men is financial illiteracy or lack of awareness about finances. When it comes to global financial literacy, 70% of women are illiterate compared with 65% of men. In India, the gap is wider, with 80% of women compared with 73% men, according to the Standard & Poor’s Ratings Services Global Financial Literacy Survey 2015. “Women have always had a dysfunctional relationship with money.
While most women manage the household and take smaller financial decisions, the bigger decisions are typically left to the males, be it father, brother or husband. This low engagement in financial processes, be it planning or investment, results in heightened risk in case of divorce or death. “This is the reason they are easily taken for a ride by middlemen, relatives and financial organisations,” says Sharma.
Another reason for low literacy is the deliberate exclusion of woman from financial matters by men to retain an upper hand in the relationship. So even if women show an interest in finances, they are insulted and told to stay away. “You need to stop feeling offended and guilty, and insist on being a part of financial management, or at least, being aware of planning and execution,” says Sunder. Ask questions, read up and make every effort to know money better.
What to know
You don’t need a degree in finance to be smart at managing money. What you need is a working knowledge of various financial instruments like bank deposits, mutual funds and savings schemes so you can invest in these and reach your goals. Also try to read about basic concepts like inflation, interest rates, loan EMIs, and enable yourself to conduct basic Net banking operations and simple mathematical calculations.
Understand the purpose of different types of insurance and how much you should have to protect yourself and your family. Also, keep yourself up to date with your inheritance rights and your financial rights in a marriage. Take the quiz provided here to check your literacy quotient.
Become financially literate
Take the first step: Despite the conditioning and societal bulwarks set up against women’s financial literacy, all it really takes is for her to take the first step. Stop feeling inadequate, slighted and guilty about your lack of awareness and move beyond managing the household budget.
Invest the money, even if it’s in the simplest of instruments like a fixed deposit, and even though it is a small amount. But do it yourself. Watch your money grow and it will give you a sense of empowerment.
Financial literacy apps: “There are many literacy apps that can be easily accessed and will give you a working knowledge about money,” says Sharma. Some such apps include Meri Dukaan, a an app by UBS and Pratham Education Foundation, which helps in management, inventory, banking and insurance; Financial Literacy, which explains financial basics, loans, personal finance and GST; and Financial Education Books.
Watch videos on Youtube: “To understand basic concepts like inflation, growth and equity, watch videos on Youtube,” says Sunder. These are readily available and will explain to you the complex processes in easy language and simple manner.
Read up on basics: Try to avoid electronic media while taking the first learning steps because you could end up becoming more confused. Do, however, read up newspapers and books, starting with primers on banking, mutual funds, loans, etc. Company’s workshops: “You should take every opportunity to attend your company’s financial skilling programs under the CSR initiative,” says Sharma. Don’t hesitate to ask questions and try to apply the learning to your finances.