Posted by Aanchal Gupta and Pranjali Das

Women are embracing financial literacy and independence today than ever before. Most of us are privileged to have maximum freedom in terms of movement, access to resources, and a supportive family which encourages us to grow. Today, men participate in caretaking responsibilities as much as women participate in economic activities. Or so we hope! However, research suggests that 62 percent of Indian women, which is an approximate figure of 411 million, either do not own a bank account or have limited access to banking services. 

If we truly want to build and live in an equitable world where everyone has the freedom to dream, work and feel financially secure, then we all need to talk more about the importance of financial literacy. 

Financial literacy empowers women to make independent decisions. Be it an emergency, unforeseen circumstances or unfortunate events, financial literacy allows an individual to rebuild their life on their own terms. 

Currently, however much we desire equality, a very small percentage of women have the privilege to focus on building their wealth and out of those who do, only 33 percent invest their money confidently as compared to 64 percent men. Encouragement from family members and partners has been a common factor in all these cases. Thus, to build an equitable world, we all can play a small part. And, it begins at home — starting with financial inclusion and advocating for financial independence. 

Also read: Why Do Women Hesitate Handling Finances?

This article will enlist five simple things that we as working women, with the privilege to think of and plan for savings and investments, can do to achieve financial literacy on a more equitable basis, starting this new year:

Advocate for independent bank accounts

More often than not family members hold joint bank accounts: particularly in the case of non-salaried women and minors. Even after minors turn 18 and start earning, they continue to hold these shared accounts with one or both parents. This is either due to the insistence of their parents or because of the unwillingness to deal with massive paperwork that accompanies such a transfer process. 

In the absence of an independent bank account, the young-adult is held accountable for even their minor expenses. As a result, they end up withdrawing money in bulk, often failing to keep track of the expenses in the process. While it may be beneficial to have an experienced adult to guide financial decisions, it often limits the financial-risk taking abilities of these young-adults.

The merit of owning an independent bank account is underrated. Independent bank accounts form the foundation of financial empowerment. It enables people to plan their finances and hold themselves accountable for their financial decisions.

Educate on The Power of Compounding

What if someone offered you Rs 2500 a month for the next 20 years? What if we said the amount is enough to buy a house or start a business?

Most people don’t understand the power of compounding. A sum as small as Rs 2500 over a period of 20 years only amounts to Rs 6 lakh in total, but with compounding it can grow as big as Rs 25 lakh, if invested consistently over a long period.  

This power of compounding is an enabler for a comfortable future. It works best when we learn about different financial instruments available in the market and choose them as per our own goals and risk appetite. The highlight of this huge, unexplored market is that everyone can invest – be it a working class person or one with a lot of wealth; whether one wants to save for their retirement or for their children’s education. There are financial products suitable for everyone’s needs. 

Discuss openly about money goals

We all have our money goals. At one point or another, all of us plan for long-term assets like owning a house, buying a bike or a car, or going for higher-ed. However, this wealth creation for the family is often managed by one or two family members at home. It invariably excludes some of the people — mostly children, especially girls. One small way in which the habit of goal-setting, managing savings and expenses can be instilled among everyone is by sharing financial goals with family members, and asking them to contribute towards these goals if they are an adult. Minors could be invited to observe the process so they are familiar as well as comfortable with numbers.

For those who invest, if there is an equal decision-maker at home, then before investing common resources, one can discuss the combined risk appetite and comfort with certain financial instruments of each member. 

Prioritise financial independence 

As someone aiming to achieve financial literacy, it’s imperative to highlight the importance of financial independence particularly how it serves to act as a cushion to unforeseen circumstances. Data suggests that women are unable to step out of abusive marriages or living situations because of financial dependency. 

Even the careers of women who bring a pay check home every month are seen as a support or an extra source of income to the family, which is rarely invested in building wealth for self. Their career is also the first to take a back seat when a caretaking responsibility comes up. 

It is important to emphasise on the importance of building wealth for the long-term for each individual. A culture where every adult invests for self and for the family can become the norm. It need not be one person’s responsibility to build wealth for all and manage household finances. Even when one participates in a part-time job or works as a full-time homemaker, it is important to not negate the importance of financial literacy and independence.

Encourage the others 

And finally, look around to see who else is part of your family at home — you’ll find countless people who are silently and invisibly serving as enablers for the creation of our wealth — be it in terms of our education or literal finances. Be cognisant of the privilege that allows us to recruit service staff at home – that bhaiya who comes to cook our meals or do the laundry, that didi who cleans our house or runs other errands. 

Encourage your service staff to visit the bank and deposit their earnings. With their permission, check on their financial health, and advise them on user-friendly investment options. Help by creating opportunities for them to learn more about finance: savings, investments etc. Create systems for them to employ their knowledge. We build our wealth, do our day job because several people support us with their services at home and at work. 

We can ensure that by taking small steps towards wealth creation, people find more opportunities to choose their career or education. From our end, the least we can do is to offer them a day off to manage their finances, and learn better.

Conclusion

All of our education focuses on getting a job and making money, and yet money is not taught or discussed in the curriculum at all. Financial abundance is not a sufficient condition to living an independent and empowered life. In fact, financial literacy forms the foundation for empowerment. 

Every individual, irrespective of their gender, age or class, needs to equip themselves with the knowledge of different financial instruments available in the market. Whether to use them or not is a choice. Always remember, as financial gurus reiterate, there are ample options available for each person with unique and diverse financial needs. We just need to do the research and find products suitable for us. As allies, we can help each other progress through research. 

Also read: Where Are The Women In Finance?

Just advocating for financial literacy without practising won’t help though. Start with self, in small amounts. See what works for you and then spread the knowledge as you spread hope and joy in this new year. 

Among your family and friends, welcome questions, speak openly about money, set money goals, and walk towards that goal. Break the shush and the habit of immediate gratification. Like we discuss physical and mental health, ensure you and your loved ones develop a healthy relationship with finances. It’s never too late to start.

At the end of the day, we all desire security and freedom — financial literacy can help us achieve it!

Aanchal Gupta is the Founder Director at Conscious Culture. A graduate in Economics and Liberal Studies, she has 6+ years of experience in designing solutions for diversity and inclusion with public, private and social sector organisations. She can be found on LinkedIn. 

Pranjali Das is a development researcher with a Delhi-based rights organisation. She is a diversity and inclusion enthusiast. Her research interests encompass gender in development, labour, big philanthropy, and organisational development. She can be found on LinkedIn and Twitter.

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