Meet the new Indian woman. She’s ambitious, attractive and has a string of qualifications behind her name. She’s a goddess controlling her own destiny…or at least she believes she is.
That’s until, someone asks her about her personal finances.
She looks momentarily perplexed upon hearing that question. But then nonchalantly mutters something about all her “money issues” being handled by her “papa”.
She then resumes her air of supremacy, flashes another confident, million-dollar smile and sashays away to win a few more titles.
But sadly, in spite of looking like a modern day version of Lakshmi—the Hindu goddess of wealth—she is nothing like her. For when it comes to being financially savvy, she is no goddess—just another financially dependent mortal!
If you’re like this new Indian woman, don’t wait any longer to achieve financial independence and truly live the life of your dreams.
Transform yourself into a financial goddess with the answers to these 6 questions:
What is financial independence?
Financial independence is the ability to choose how and when you earn, save, invest, and spend your own money.
Who is a financially independent woman in India?
Any woman in India who has successfully crossed the following 4 stages is financially independent:
1. Earn: Most women in India do not hold a job of their own and hence, have to financially rely on someone else for even their basic necessities. A 2016 India Spend report revealed that “only 27% of Indian women are in the labour force–the lowest among BRICS countries; among G-20 countries, it is better only than Saudi Arabia.”
One reason for this disconcerting statistic is that a large number of women leave the workforce due to social issues such as patriarchal views and gender bias or responsibilities such as motherhood or caring for the elderly. A study by researchers from the World Bank showed that “nearly 20 million Indian women quit work between 2004-05 and 2011-12”. What’s more is that besides the ones leaving the workforce, regressive religious and cultural norms, security issues and other related factors prevent many other women in the country from not being allowed to work at all.
Hina Shah, founder of financial planning firm, Luhem says, “A financially independent woman knows that the first step towards financial independence is to earn her own money. She is not afraid to break away from traditions that threaten her overall wellbeing and follow a path of her own”.
2. Save: On account of not being able to earn money, many women are left with little to no savings. That’s why, even if they do save, these women opt to save their finances in hard cash and not in bank accounts. Due to this trend, many of them do not even feel the need to hold bank accounts. An Intermedia survey in 2015 showed that around 40% of women in India do not hold their own bank accounts.
A large number of earning women also have to hand over their entire income to male members/elders of their family to manage. Even women who are in full-time paid jobs, including the primary breadwinners of the family or the ones earning more than their spouses, find it difficult to save as they are looked upon as the main caregivers in the family and hence, forced to cater to everyone else’s needs before their own.
“A financially independent woman knows that she needs to save for a rainy day or an emergency and so will always find ways to consistently generate and save away a fixed portion of money in a safe manner,” says Hina.
3. Invest: According to a 2015 survey by Central Depository Services India Ltd (CDSL), less than 25% of investors in the securities market are women. Prior to this, a 14-city survey by DSP Blackrock showed that “only 20% of single working women in India – excluding divorcees and widowers – make their own investment decisions. Among married women who claimed they were involved in financial decision making at home, 52% said they were informed after their fathers, husbands or brothers had made such decisions.” This is hardly surprisingly considering that many Indian families believe that women are not good at money matters.
Many women in the country themselves feel they are not as qualified or intelligent as the men of their house when it comes to making serious financial investments. However, study after study shows that women may not only be good at investing, they can even be better at it than men. According to a study by Fidelity Investments held last year, “women not only save more than men, their investments also earn more annually”.
“A financially independent woman is well-versed with financial matters. She knows how to makes smart investment decisions to reach her goals with the guidance of a certified financial planner or investment advisor. She also expertly controls her emotions while making any investments,” says Hina.
4. Spend: Although many Indian women spend long hours in unpaid labour including managing household expenses—66% of women’s work in India is unpaid as per the WEF Gender Gap Report 2017—they spend very little on themselves. On account of not being the primary breadwinners in the house, many women have to make do with extremely tight budgets to run their household. This leaves them with no personal finances at all.
An October 2011 survey by the Neilson Company and NGO Plan India shockingly revealed that over 88% women in India cannot even afford to use sanitary pads while on their period. According to a December 2016 study by researchers from Jawaharlal Nehru University and Indian Institute of Technology, Roorkee, catastrophic maternal healthcare expenses pushed 46.6% mothers in India into poverty–with the illiterate being especially susceptible.
“A financial independent woman realises her own worth and knows that self-care is not a crime. Even if she is a homemaker, she is aware that she is saving a lot of money by taking on the responsibilities of managing the household and looking after children or the elderly. So, she doesn’t hesitate to budget in a way that keeps money for herself and for emergencies, too,” says Hina.
What is the power of a financially independent woman?
Money may not be able to buy a woman her happiness, but it can definitely give her the power to make herself happy. Here’s how:
1. She can choose the career/job of her choice.
2. She is not afraid to break away from unhealthy relationships.
3. She has the freedom to pursue her dreams.
4. She doesn’t have to depend on money from others.
5. She lowers her risk of sexual harassment.
6. She has the freedom to travel/go wherever she wishes.
7. She is not afraid of legal matters.
8. She is confident and fully prepared to face emergencies.
9. She has the ability to invest in her own future.
10. She is able to afford privacy and security.
Do I need to be good at math to become financially independent?
One of the biggest myths about being financial independent is that people need to be good at math to earn, save, invest or spend their own money. This is understandable given the jargon-riddled world of finance. Yet, financial gurus believe that the willingness to change your financial situation coupled with even a basic understanding of math can easily propel a person, male or female, onto the road of financial independence.
“To become financial independent, one only needs to have the right attitude and not knowledge of any complex formulas,” says Hina.
What steps do I need to take to become financially independent?
Hina recommends you follow these five Ds to become financially independent:
Desire to become financially independent: It may sound obvious, but to become financially independent, you must first “want” to become financially independent. You need to make up your mind to do what it takes to achieve your financial independence.
Determination to act: Most people don’t achieve their financial goals because they are afraid to make changes in their lives. You cannot achieve financial independence unless you are willing to come out from your comfort zone. Don’t be afraid to start earning your own money. Remember: Success comes to those who dare and act.
Define your needs and wants: If you are living from pay cheque to pay cheque, review what you really need to spend on. Check if any of your current spending is on your wants and not your needs. Then start investing a small amount of wealth bit by bit to form an emergency fund.
Draw out a financial plan: Make a realistic picture of your current financial situation and set a goal that will help you become financially independent. Check what you will have to do to achieve these financial goals. See how you can develop yourself to earn more money. Clear your debts. Save money. Make investments. Breaking these big financial goals into “small weekly goals” can help a lot.
Date money once a week: Take some time off at home or a peaceful place to analyse your spending, earnings, savings and investments in the past week. Make a budget. If you already have one, review and rectify it to meet your financial goals.
Who can help me become financially independent?
If you know and value the importance of financial independence, you can help yourself become financially independent. With a little guidance from a financial planner, you will achieve this in the shortest time possible.
So, what are you waiting for? Contact your nearest financial planner and get started. It’s time to Be Your Own Lakshmi!