Women and Personal Finance

Padma was 45 years old, happily married with a 17 year old daughter who was to soon go to college. Her husband, a racing enthusiast suddenly met with an accident. It threw her life totally out of gear! She had quit her job long back to take care of their daughter. Coming from a Music background she had left all the investment decisions to her husband. She felt she did not have the aptitude for these things. She had only signed forms when he asked her to. Family and close friends then chipped in. Thankfully, with their help she realized that, there was enough money which would come from Insurance and there was other savings which would pull her through. She took up a teaching assignment in a music school to support the family. 

Lakshmi had been a pillar of support for her husband of 50 years – despite not being highly educated, she managed her household efficiently. She was proud of the fact that her children were well settled abroad. However, when her husband unexpectedly had a stroke and was bedridden, she was at her wit’s end. She did not even know how to draw cash from the bank! 

These women like many other women, were compelled to learn about their personal finances only when they found themselves in a tight spot. This situation stems from various social and historical reasons. It has always been the man of the house who made important decisions and women, being placed lower in the social hierarchy did not. This included decisions regarding the financial matters. It was also because of lack of education of women that they were not in a position to contribute to the decision making process. Even with education, either women did not feel confident enough or had a low self-esteem which resulted in a lack of awareness of financial matters. In the modern day scenario, in cases where women were competent to make the decisions, unfortunately, the male ego comes into the picture which leads to unilateral decision making.    

The good news is that it is all changing for the better. While the Wealth Management and advisory industry is male dominated, women are slowly but surely making a place for themselves. Today, there are many successful women fund managers and advisors as are women investors. Despite their own lack of self-belief, study after study has proved that women fare better at investing than men. They bring a different perspective to investing and tend to have a conservative approach which helps in the long run. They also tend to buy and hold investments rather than trade and react to market fluctuations. 

A very significant aspect which is overlooked by a lot of women is that demographically they tend to outlive the men. So, it is all the more important that women should be financially literate and be on the top of matters related to personal finance. 

Ideally, some of basics should be taught in the school curriculum. Unfortunately, our education system focuses more on theoretical knowledge and very little practical knowledge is given. There is almost next to nothing on financial matters.  

Let’s focus on some of the things that women should be mindful of:

  1.  Know the portfolio of the family finances and be an active participant in the decision making process. This includes being in the know of where the money is being invested but also through whom. Be present when the Relationship Manager / Financial Advisor / Agent is meeting up with your spouse so you can understand the thought process behind the investments. Asking a lot of questions help! Understanding the product where the investment is being proposed is the first step towards being financial literate.
  2. A lot of financial advisers have online/offline tools which can consolidate investments and provide a single view or single statement. Actively learn to access the tools and navigate them because it makes it easy to keep track of the various investments made.  
  3. Have access to all the accounts either as a second holder to the account or as a nominee. This of course depends on the relationship between the spouses or partners. With changing social milieu, some couples have one common account and another single account which they keep independent of each other. In that case, the single account should have a nomination in place.
  4. It is extremely important that the woman should be aware of the liabilities too. If there is a mortgage or any other major liability, she should be aware of the monthly interest amount which goes towards servicing the loan. Most home loans have a term insurance plan built in. If not, make sure the loan amount is covered by insurance. It has become easy to take any kind of loan or convert a big credit card purchase into an EMI. This may lead to a debt trap. Being in the know about the monthly outflow towards servicing the loans will prepare you in case of any eventuality.  
  5. Estate Planning – Benjamin Franklin once said only two things that are certain in life are death and taxes. It is necessary that one must be prepared for any eventuality. Writing a Will ensures that in case of any eventuality, your assets are distributed as per your wishes. It is advisable that everyone man and woman write a Will. A Will need not be on a stamp paper or registered to be valid. It can be on a plain paper listing down all your assets stating to whom you wish to pass on your assets to. This can include the digital assets, social media accounts etc.


This is by no means an exhaustive list. But it would be useful if the women follow these in the interests of their financial wellbeing.