Given the traditional roles dictated to women, by age old patriarchal systems, it is no surprise that a large majority of women are still not financially independent and neither as financially aware as their male counterparts. Other than low rates of employment for women, the involvement of women in important financial decisions of the family as well as in money management is also very low.

Various research studies show that in most households managing money and finances is still the man’s job and I am not talking about day-to-day budgeting which is likely being managed by the woman of the house. Even today, many employed women, hand over their salaries to their spouses/parents/ in laws or keep them in a joint account.

LXME – India’s first financial platform for women – in its Women & Money Power 2022 report suggests that 33% women in India do not invest at all and the number is as high as 40% in the 21-25 years age group. Overall, 55% women in the country are either not investing or are unaware of their investments. The survey shows that 78% women save less than 20% on their income, 56% save less than 10% and 14% women do not save any money. Another disturbing finding (though not surprising) was that 59% women had no insurance (life or health).

Another study from UBS Global Wealth Management (2019), found that 58 percent of women leave financial decision making up to their male partners. Many women are not aware of the financial investments being made by their spouse and do not have any idea how to access that kitty in times of need. Pankaj Gera, financial advisor notes that almost 75% of his clients are men, of which only 8-10 percent do the financial planning along with their wives.

Being financially independent does not necessary require one to be employed. And neither does being employed automatically mean that one is financially empowered. What is important is to be able to manage your money and make it work for your future.

Not being financially aware or independent can put women at risk financially, particularly if they divorce or their spouse dies. Being financially independent is also very important if you are in an abusive relationship – having a cushion to fall back on helps in making the decision to move out of the relationship. Many women end up remaining stuck in unhappy marriages because they are not financially independent.

Shilpa Bhaskar Gole, financial advisor, shares the story of one of her clients who lost her husband in the second wave, and give some very important tips – most of which are relevant both to homemakers and employed women.

How to become financially independent?

The journey of becoming financially independent starts with a financial plan and a commitment to it.

1. Define what financial independence means to you: For instance for me financial independence means not constantly worrying about a job and making my retired life secure. It is also important that I don’t have to worry about my kids education in the future.
2. Break down your plan into specific goals: Like I have estimated the amount I need for our retirement or for my kids education and so on. This way I know how much I need to save and the time I have to reach that goal.
3. Create a safety net: Life can change anytime. Unexpected health needs. Loss of job. Death of spouse. Divorce. Anything can happen. Hence it is important to keep an emergency fund for about 3-6 months of expenses and at the same time make sure you (and your spouse/family) have adequate health and life insurance cover.
4. Understand your household’s liabilities. Have a back up plan of how to repay them in case of any untoward emergency.
5. Be aware of family’s investments. Many times, family members are not aware of each other’s investments, insurance cover etc. Know where to look for the investment/insurance documents. In case of untimely death of a family member, the rest need to be aware of what to do and how to access.
6. Keep revisiting your goal. Life changes. Families grow. Situations and contexts change. Hence it is important to keep revisiting your goals and where you are in achieving them.

These tips are common for men and women, and it is important that both are involved in their financial planning. It may be tempting for one partner to take a backseat and let the other take care of everything – usually women taking the backseat, but it is necessary that both know what is happening and are involved in the process.