Why Do Women Leave Money Matters To Male Family Members?
She has a flourishing medical practice and earns well. However, when a financial consultant contacted Poonam Kamble, he wanted to explain the investment options to her husband. Kamble was not offended.
She happily passed on the burden of making the investment choice to her husband. And she is not alone. A majority of women in India don’t want to get involved in money matters and let the men in their families—father, husband, brother or son—manage their financial affairs.
Why are women, even those who are well educated and holding positions of responsibility, so reticent when it comes to their finances? Do women voluntarily take a back seat in matters of finance, or do they get bogged down with numbers and complicated calculations? I reached out to nearly 100 well-educated women working in diverse fields to gauge their financial literacy and understand if they were empowered to make investment decisions.
The findings are not very heartening. They validate the strong patriarchal legacy that we have inherited. Even well-placed working women are not in a position to handle their money independently. These women have carved out great careers for themselves but are at sea when it comes to their finances. A whopping 92% admit that all financial decisions are taken by the male members (read father and husband) of the family.
The respondents also demonstrate a poor level of financial literacy. Their investment choices rarely go beyond bank FDs and small saving options such as the PPF and NSCs. Nearly 83 per cent have little or no knowledge of mutual funds. And 77 per cent have more than Rs 1.5 lakh cash idling at home even though it could earn better returns in a liquid or short-term debt fund.
Almost all respondents (98.8 per cent) are repaying a loan, but only three out of 10 understand how EMIs work. (Over 70 per cent believe if they take a loan of Rs 10 lakh for ten years, after five years the outstanding would be roughly Rs 5 lakh). What’s more, only 14 per cent have considered investing in gold ETFs instead of physical gold. The remaining 86 per centare not aware of how the high making charges ate into the returns from gold jewellery.
Tax is a blind spot. Though 82 per cent are aware of how much tax has been deducted from their salaries as TDS, less than 5 per cent file their returns on their own. Most take the help of a tax professional, and 97 per cent have never visited the income tax site.
Can women afford to sit in the shadow when it comes to financial decisions? Women must come out of their shells and take an active interest in money matters. Whether it is knowing the benefits of compounding or understanding how insurance works, whether it is tapping the opportunity in equity funds or avoiding the impact of taxation, they cannot shirk from learning these basic money concepts.
Don’t think that personal finance is rocket science. It is time women realise this and usher in a new era of financial liberation.