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What every woman should know about money

Last updated on: March 5, 2010 10:05 IST

What every woman should know about money


Sheetal Jhaveri

With International Women's Day slated for March 8 Sheetal Jhaveri explains why it is important for women to strive for financial independence.

Financial independence is a dream come true for everyone. That is why we all toil from morning to evening. But what is financial independence?

Individuals define financial independence as a stage at which one does not have to depend on anybody for their financial needs. But, I would say this is only partially true. As Robert Kiyosaki, of the Rich Dad Poor Dad fame, famously put 'Don't work for money, make money work for you'. I would say complete financial independence is when your money starts working for you!

Isn't this what every individual strives for? And everyone includes all women, too. In fact it is imperative that women understand the importance of financial independence and strive for it much harder than men.

Click NEXT to read why women should plan for financial freedom.

The author is a certified financial planner and can be reached at

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Here are a few good reasons that I am sure will make women want to reconsider the fact that they do not necessarily have to be financially independent as they have either their fathers or husbands or their children to look after them.

Longevity: Women live seven to ten years more than men do. Also women save half as much as men. Non-working women do not have much savings besides what little they might have managed. Also women take breaks in their career due to various family responsibilities one of them being before, during and/ or after pregnancy.

No one likes to be dependent on other person for anything, especially finances. Hence, women have to plan for their finances very well in advance just like men.

Death: No one can predict death. Hence, one has to be prepared for it. The earning member (which still is the man in most cases) of the family has to prepare for it by taking adequate insurances and doing adequate investments. In India the general tendency is that husbands are generally in charge of financial matters and help support the household. In case of an untimely death of their husbands, women should not be stranded or have to depend on others for financial support.

Hence financial literacy and independence are important.

Divorce rates have increased in India in the past couple of decades. This definitely calls for all women to become financially independent.

Single parenthood: Be it by death of the spouse or by divorce, single parenthood is difficult. Although your husband may have made provisions with the ever-increasing expenses it may not be enough.

Other compelling reasons: Not only does financial literacy and independence help you face untoward events but also it boosts your self-confidence and your self-respect. Financial independence will definitely help you fulfill your dreams. Note: Untoward incidences can also mean that your spouse or your parents or your children can be in financial trouble. This is the time when your savings can help them.

Click NEXT to read how women should plan for their financial independence

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The important question though is how does one go about achieving financial independence.

Financial literacy: Is only a starting step. In fact men are so busy with their work that they have no time to manage their money. It is advisable for women to gain financial literacy and help the family plan finances in the best possible way.

Planning: Do remember that it is very important for husband and wife to sit together and plan their finances. It is always advisable that both the spouses should sit together, prepare the budget, jot down their goals and start planning for it together. Also, both spouses should know about investments as in case something happens to one of them the other is not lost. In fact that is the case with many women as they have no clue where their husbands' money is invested.

The top most question which I have always been asked by non working women is how to save and again how to invest. A few pointers might help:

Savings: This would definitely be a worry for non-working women. For housewives they can save from the money given to them for household expenses. Try to stick to a budget so that you do not go overboard and can save, however small the amount. It is not necessary that the amount has to be big; even Rs 100 is good. But make a start. You can also take up teaching or some kind of activity which can earn as well as keep you busy. For working women it is important to save as much as they can.

Investments: I am sure all of you might be wondering with small amounts (say Rs 100) where will I save and how? Savings should be based on your goals, that is, for what you would like to save and when do you want it? Financial literacy will definitely help you with more investment options.

Insurance: Be sure to have your health insurance in place. Note: Single parent and working women who contribute at home, it is very important to even have life insurance in place along with a good health cover.

Finally, remind yourselves that women are no longer the weaker sex. Successful women like Indra Nooyi, Kiran Mazumdar Shaw, Anu Aga have already proved how wrong that notion is. Just as these women have gained their foothold in a male dominated world you should also strive to have your place in the sun.

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