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Financial Literacy Of Women For An Empowered Tomorrow

Over the years, we have seen more women breaking free from societal norms to take control of financial decision-making

Women play myriad roles in their lives that shape their personal and professional journeys. They seamlessly juggle the responsibilities of being a daughter, wife, mother, sister, and accomplished professional. Breaking barriers, women today transcend traditional roles to make their mark, contributing significantly to various fields.

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For most of us, our mother and grandmother were our first teachers to impart invaluable money-saving skills. Generations of women have efficiently managed household finances by saving money and stashing it in kitchen pots or dabbas. By using their savings to assist family members in times of distress, women have played a pivotal role in ensuring the financial well-being of their families. While women understand the value of saving, there remains a knowledge gap regarding investing, preventing them from capitalizing on their savings.

In the Indian family set-up, male members often make the majority of the financial decisions, thus limiting the exposure of women to the world of investing. While financial literacy, in general, is a concern, that figure for women, in particular, is all the more alarming, primarily due to various obstacles – physical, psychological, and cultural – that hinder their access to financial literacy.

Over the years, we have seen more women breaking free from societal norms to take control of financial decision-making. This independence is partly due to access to higher education, broader exposure, and an increasing push for financial literacy. In an environment where we are witnessing a surge in the quantity and intricacy of financial products, a robust understanding of the financial industry is even more crucial for women to make the most of their money.

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According to the OECD (2013) study based on 121 countries representing a diverse range of wealthy and developing nations, women live five years longer than males on average. With longer lifespans, women may need to manage their finances over extended periods, making financial literacy crucial to manage their savings and investments efficiently. Knowledge of financial planning and investment options can help women protect themselves from potential financial challenges.

Additionally, women investors are necessary for the economic growth of the country. Their participation in equity markets will increase liquidity and expand trade opportunities. Improving financial inclusion and economic equity requires financial literacy and the involvement of women in investment activities.

To attain financial independence, women must acquaint themselves with market intricacies. A solid understanding of money matters would shield women from exorbitant interest rates and exploitative financial schemes of unscrupulous moneylenders.

For real empowerment, as a society, we need to include women in financial decision-making actively. This small step can have far-reaching effects. We can start by educating them on all options available, their advantages, art of selecting the appropriate instruments, knowledge of emergency contacts, and the redemption process.

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In most households, budgeting monthly expenses and allocating cash to women of the household for managing day-to-day functions is a common practice. Adopting a similar approach for investment allocation is essential. Empowering women investors by endorsing independent research and providing the freedom to make investment choices will elevate their financial expertise and self-confidence.

Due to their limited experience, most women hesitate to handle financial matters. By encouraging them to participate in training programs facilitated by exchanges and AMCs, we can instill confidence in them to take charge. For those unable to leave their homes, the abundance of online content offers a convenient and accessible means to self-educate on financial matters.

"Just as you can't learn to swim by reading, drop the book and jump in the pool," goes an old proverb, and the same principle applies to investing. They can start with as little as Rs 100/- to learn the art of investing practically. With consistent and gradual investments, women investors can enhance their awareness levels to dive deeper. They will become more attentive to their investments once they start investing, monitoring performance, and learning from errors.

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Over the years, more women have recognized the significance of investing and saving to improve their living standards. Tailored financial literacy programs are helping such women to enhance their understanding of investments. With the increased inclusion of women in the financial mainstream, we are building a more robust economic landscape, driving sustainable growth and prosperity for the nation.

(The article is written by Samir Shah, Head, Online Business at Axis Securities)

(The opinions presented belong solely to the author)

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