Women Budgeting and Planning
In many households, it is generally seen that the important financial decisions are taken by the man of the house. It was considered to be their domain with the assumption that they understood the money matters better and hence were in a position to take the best decision. The women did not participate in such decisions.
However, the lady of the house has been a great financial planner on her own terms. This is due to many reasons. Along with juggling various responsibilities of the house including taking care of the kids and elders of the house to managing the kitchen, she has been the Chief General Manager in charge of the Household Finances. She keeps a close tab on the prices of the hundreds of daily things required in the household from groceries to milk to cloths of the kids to many other household products. She ensures that the best quality products are bought at the best bargain price possible. Give her a tight budget and she will ensure that the same is carried out to the T. Yup, she does indulge in the occasional sari sale, but without disturbing the overall budget. She also has a fund she keeps aside for the rainy days.
However, she did not contribute majorly in a decision like which housing loan should be taken, where should the savings of the household be invested, what should be the health and life insurance to be taken etc. We are seeing a shift happening here with increased participation of the women in taking important financial decisions. This is not only restricted to the working ladies – but also to the typical homemaker.
This shift can be contributed to multiple factors. Many women, who used to keep their savings in cash which found its way to the bank during demonetization, can now make use of this opportunity to earn a much better return on savings. Her choice is no longer restricted to buying gold jewelry, but many other financial products. While cash gives no return, the savings account just gives a meager 3.5-4 % return. She can choose to invest in better products like equity mutual funds (12-14% returns), PPF (7.6% tax free), Sukanya Samriddhi Scheme) (in case of saving for a girl child and having 8.1% tax free return).
With the advent of mobile internet, she can access information about the various products, their benefits, how they work, are they suitable and then take a decision. In addition to easier and faster access to information, it has now become easier to conduct many financial decisions like opening a bank FD, investing in a mutual fund, buying or selling of shares, paying bills online with the click of a button. One can also avail the services of a professional financial planner to plan their finances in a much better fashion. The discussions will be much more comprehensive, detailed and long term now that she understands the products and concepts in a much better fashion.
The domain long held by man has been successfully breached. The women of the house can be an equal partner in planning the finances of the house.
Sudipto Roy was heading Treasury function for Tata SSL and has an extensive experience of the Indian financial markets with a career spanning over 27 years he has worked in diverse industries such as Financial Planning & Distribution, Asset Management, Life Insurance, Insurance Broking, Equity etc. He has held a leadership position in PNB Principal Financial Planners, Kotak Mahindra Mutual Life Insurance, Birla Sun Life Insurance, and Kotak Securities.