Women and Money – A relationship not made in heaven

Today, we have a guest, Kirti, who brings out the relationship (or the absence of it) of women with their money. It is not a new topic has been beaten to death in the media but Kirti’s perspective is holistic.

Well, I will let Kirti say the rest of it. As for you, I would encourage you to share it with your women colleagues and friends.

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In the fairytale, Cinderella or Snow White finds her rich prince and they live happily ever after. But in real life things are different.  Women’s life in the 2020’s is much better than Cinderella or Snowwhite who were ill treated by their step-mothers. Attitude towards girl children has been changing and in urban cities daughters are looked after just like sons.  

Sadly a womans’ relationship with money is not changing much.

Principles of personal finance management are gender-neutral but a woman faces situations in life that men don’t such as relocation due to marriage, career disruption on childbirth, re-entry into corporate rat race or a complete career switch. Are you prepared for it, financially? 

Women and Money

A woman’s relationship with money is kind of limited. A woman is more involved in spending and saving than investing because traditionally men, father, brother or husband, have managed money. Our mothers and grandmothers were excellent savers, as Demonetization proved.  Things are changing as more women are working today but still many of a woman’s financial decisions are taken by her father or brother or husband or son. 

The low engagement in financial processes results in heightened risk in case of divorce or death. This often leaves her dependent and vulnerable. So she is easily taken for a ride by relatives, middlemen and financial organisations.

Despite the conditioning and societal prejudices and biases set up against women’s financial literacy, all it really takes is for ‘you’ to take the first step.

It doesn’t matter if you are single or married, working or a homemaker—the transition from a saver to an investor needs to happen. You don’t need a degree in finance or be good at maths to be smart at managing money. What you need is a working knowledge of personal finance. Frankly, it is not rocket science.

Working Women and Money

The urban woman has changed  to the modern day multitasking woman, handling her duties and chores at home, managing a career outside homes, nurturing children and balancing family life with career. But she suffers due to difference in pay. And when it comes to care-taking, be it for children or sick parents, it is the woman who take a break from her work life.

According to the Monster Salary Index Report 2019, women in India earn 19% less than their male counterparts, with the median gross hourly salary for men being ₹242.49 in 2018, compared with women, who earned ₹196. 

From the day she starts earning, a woman needs to invest for her future so that she can make her own decisions about career moves, breaks. No matter how small the amount is, she has to use the power of compounding to her advantage. 

Marriage Women and Money

Draupadi of Mahabharat had 5 husbands, became a queen, but she was staked in a game of dice and none of her husbands came to rescue when she was disrobed.

Marriage is considered a huge milestone for a woman and brings with it a host of changes. From household chores to in-laws, responsibilities increase manifold.  

After marriage, if the woman is working, there is my money, your money and then your expenses, my expenses, our expenses, my goals, our goals, my career, our career, our investments, etc. If woman is a homemaker, it is thought that she is leading an easy life, commanding over maids.

If the husband controls the financial decisions of the family, it can disrupt the balance of power in a marriage. It also increases dependency and may break the woman’s confidence about being able to contribute to the family’s decisions. A couple has to decide how they will handle finances (joint account, investments, running of the house, goals of when to buy a bike/car, house), etc. 

Life is uncertain and even strong marriages can crumble. If you are dependent on your spouse for your money needs, you may find yourself in a vulnerable position if he is no more or in case of a divorce.

The 2011 Census pegs the number of divorced in India at 1.36 million, with the number of divorcees doubling in the past two decades, as per a recent report from United Nations

Marriages are said to be made in heaven,

But divorce is most certainly a very difficult earthly affair.

Marriage requires two people to understand each other including money habits and work together to have a happy financial life!

• Both should give each other the space to spend a certain discretionary amount and discuss jointly if and when the spending threshold is crossed.
• A woman should be in control of her ‘streedhan’ 
• A woman must be an active, knowledgeable and involved participant in all financial decisions of the family. 
• A woman should also be aware of all the investments, whether it is in property or tax-saving investments, and should not blindly sign any documents.
• A working woman should make sure that her saving and investing is in her name. She should also contribute towards the household expenses.

Rights of Women

When a person dies his or her assets are distributed amongst the persons as specified in the will. Nominations help in transferring movable assets like bank deposits or insurance policies, but a will takes legal precedence over a nomination.

However, if a person who dies didn’t leave a will, technically called intestate, then the assets would be distributed according to the law based on his or her religion. This is technically called as non-testamentary succession. 

As India has no uniform civil law and hence personal laws based on religion guide the rights. The succession of Hindu, Jain, Buddhist and Sikh is governed by the Hindu Succession Act. Muslim succession is governed by the Muslim Law and Christians are governed by the Indian Succession Act.

The Hindu Succession Act, 1956, did not give daughters and sons equal right in the father’s property. But the Act was amended in 2005 which established that every daughter, whether married or unmarried, has equal rights as her brothers to inherit her father’s(mother’s) property after his death. If the parents do not leave any will before the death and brothers’ refuse to give the share, one can turn to the court for legal aid.

When it comes to husband’s property, the wife can’t lay a claim unless she has contributed to its purchase and has proof for it.

If the husband passes away without leaving any will, a wife as a Class I heir gets an equal share along with other surviving Class I heirs. This includes husband’s mother, children, children of predeceased children.

It ain’t easy

So, you see, it is now important, more than ever before, that you take charge of your money. No, it ain’t gonna be easy. But over a period of time, while managing money, you will make mistakes but will also gain confidence.

The key is to remain committed, keep on learning and make sure that you have a good financial life. Will you?

About Kirti: Kirti, a software technology professional, runs bemoneyaware.com focuses on writing about money topics such as EPF, Income tax in simple terms.

Between You and Me: Why do you think women remain aloof from matters of money and investing? Here’s a note I wrote exploring some reasons.