Women and Financial Freedom!

Here is the transcript if you would like to read it instead:

Jaya:

Welcome back to Kairos, a podcast on financial planning where we talk about doing the right thing at the right time. Hi Susithra.

Susithra:

Hi Jaya and hello to everyone who’s listening in. Independence Day is around the corner, so wishing you all a Happy Independence Day.

Jaya:

Speaking of independence, we have an interesting topic to discuss today. It is about women and financial freedom. Women empowerment is the most discussed topic of late, even the Olympics this year saw a huge rise in women representation, and I thought it would be apt to take up this topic for the month.

Susithra:

Completely agree with you Jaya. For me women empowerment doesn’t stop with getting a high-quality education and reaching career goals, it should also involve being financially independent. Women must feel confident to make their own financial decisions instead of depending on their father or husband to make it for them.

Jaya:

I’m glad you brought this up, financial independence is a crucial milestone in women’s life. So, where do you think the problem is? Why do you think they are hesitant? aren’t more women aspiring to become financially free?

Susithra:

I believe women do aspire to become financially free but fall short of their aspirations primarily due to the stereotype built around the field of finance. This is surprising because handling finances comes naturally to women. In many Indian homes, the mothers handle family finances. But, somewhere along the road, from handling monthly finances to making investment decisions, women lose confidence. Or they don’t prioritize investments as something they must be involved in and leaves the responsibility to the men of the family.

Jaya:

Later in the future, when the husband or father is not around to help them out, women are left in the dark and find it difficult to cope up with the financial responsibility. Why do you think women are hesitant?

Susithra:

If we go to the root of it there are few possible explanations as to why women are hesitant to take up the mantle.

1. 1. 1. Financial literacy. This is true for both men and women. We are not taught about finance in our schools or colleges. That is the primary reason why most adults struggle to make the right financial decisions during the initial stages of life.
      2. Priority – Women tend to prioritize other family responsibilities such as handling the household, caring for children and parents, and finally their careers. Finance doesn’t even find a place in the list of a women’s priority items.
      3. Attitude – As I mentioned earlier, most people still consider finance as a man’s job. Also, a women’s relationship with finance matters. From a young age, girls are conditioned to believe that it is a man’s job to provide financially for his family, and women are assigned the role of caregivers and are made to think that they do not need to worry about finances.

So, we cannot conclude by saying lack of financial literacy is the primary reason for them not getting involved in managing their finances.

Jaya:

I agree, even women who have built a career in finance generally do not handle their family finances. What risk do you think women are exposed to when they do not have financial awareness?

Susithra:

• • • To start with, women need to know their financial rights. For example, many women are not aware that they are entitled to inherit from their ancestors. There are also financial products in the market which offer special benefits to women. Home loan interest rates are lower for women applicants. If you do not understand your basic rights, it is easy for others to take advantage.
    • Women typically invest in traditional financial assets such as bank FDs, endowment insurance policies, and chit funds. These traditional investments do not provide sufficient returns to beat inflation. And we all know how inflation can eat into wealth. The lack of awareness about other investment avenues restricts their wealth accumulation.
    • Women typically have a higher life expectancy and tend to outlive men in general. This means, women need to plan in advance for their retirement as well as medical expenses.
    • In cases of divorce or loss of loved ones, single women tend to face more hardships than their male counterparts when it comes to finances. Women especially are left with family responsibilities such as taking care of children in cases of divorce. Women end up depending on their children or spouse or parents to support them financially.

Jaya: Point well made.

Financial awareness is the key to handle such situations.

With more and more women choosing to stay independent, it becomes doubly important for them to keep their finances in line to meet their ambition. So, what steps should women take to become financially independent?

Susithra:

1. 1. 1. There are a few things that every woman must do as the first step towards financial freedom.
      2. Get more involved in your family finances. Don’t just let your husband/father manage the money. Be a part of all finance-related discussions starting from budgeting to investment and follow-up on how your investments are performing. Make this a monthly task.
      3. When you are talking to an insurance agent or banker, do not zone out. Pay attention to what they are saying and ask relevant questions, so you are confident about what you are signing up for.
      4. Have a separate savings bank, and Demat account in your name and start managing it. Do not forget to have both life and health insurance covers for you.
      5. Invest some time every week to learn about finance. There is no dearth of information available on this topic. So, put in that effort and your future self will thank you.
      6. Lastly, seek financial help from a professional when you feel overwhelmed. There are certified financial planners who will guide you through the process.

Jaya:

This seems like a good starting point. Ultimately, women must start prioritizing financial education and invest in themselves to reap the benefits in the future. With more women joining the job force and many becoming entrepreneurs, understanding finance is the key to success. You mentioned getting professional help. Are there any specific things that they should consider while choosing the right advisor?

Susithra:

Yes, there are. Financial advisors are like doctors. Make sure you get to know them before taking their service.

1. 1. 1. When choosing a financial advisor make sure they have the credential and expertise to give advice. This will help you filter out unwarranted advice
      2. Advisor should be willing address all your clarifications and should be unbiased.
      3. Make sure they are not remunerated by the way of commission. Always choose fee-only advisors as you can be sure that the services you get are not influenced by other factors.

Jaya:

That makes sense. It was a meaningful discussion. Quickly summarising key takeaways.

1. 1. 1. Invest in your financial literacy. Like education, this will give you a hand in tough times.
      2. Be confident and fearless while making financial decisions. Learn from your mistakes and do not give up.
      3. Get involved in managing your family finances. Don’t let your partner or anyone else run the show.
      4. Have adequate insurance cover to sail through rainy days.
      5. Get professional help, if needed.

That’s it from our end. We will be covering financial planning topics related to women in detail this whole month. So, make sure you follow ithought’s social media handles to know more

If you enjoyed listening to this episode, please share it with your friends! Thanks for tuning in, see you next month.