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Money Management Tips For Women In India

09Jan2012
Money Management Tips For Women In India
SHEROES Work From Home Opportunities

Women in India are contributing significantly to family finances. Here are some fundamental money management tips for women to help with managing their money.

Gone are the days when Indian men were the primary breadwinners and women cooked and tended to their children. Women in India are taking big strides financially and contributing significantly to family finances.

Top Money Concerns For Women In India

However, there are some stereotypes that still remain and some fundamental issues that women face with money. Here’s a look at some of them.

1. Mixing money with relationships

Very often women are unable to separate money from relationships, i.e. they are more likely to lend money to friends or loved ones on the basis of relationships and bear the consequences if there is an issue with repayment.

If faced with such a situation, first see if you can help out without involving money – help with networking, babysitting etc. Remember that it is not good sense to sacrifice your future by putting others’ needs before yours.

2. Keeping up with the Joneses

Social pressure sometimes can be a very detrimental factor when it comes to finances. What someone else has becomes a dictating factor and you have to have it.

When buying group gifts, ensure that you don’t go overboard with the spending simply because everyone else is contributing a bigger amount that you can’t afford.

Join Money Hour on SHEROES
Money Hour on SHEROES

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The SHEROES community organises weekly financial literacy events and workshops for women by expert financial consultants to help women learn how to save and invest money.

Download the SHEROES only-women app and attend a Money Hour every week where we discuss topics such as, “How to grow your savings – best savings options for working women and homemakers.”

3. Lack of negotiation skills

Negotiation is a word which frightens most women. Whether it is negotiating a good deal on a home, or a salary raise with a boss – women prefer not to get into it.

This becomes a crucial factor in building personal finances. Women don’t make as much money as men simply because they don’t ask for it.

4. Emotional spending

Emotional spending or “Retail Therapy” as it is more commonly known is a huge factor when it comes to money concerns women face.

Following an emotional disturbance, women love to soothe themselves by buying expensive clothes or shoes or anything that they’ve had their eyes on for a long time. Sometimes impulsive buys prove very expensive and women run the risk of huge credit card bills.

Remember that these “highs” are temporary and you need to pay your credit card bills at the end of the month, sometimes a lot higher than you anticipated. Also, evaluate the items in your shopping cart before you hit the checkout desk. Which of those do you need?

5. Lack of confidence in handling money

Many women admit that they lack confidence when it comes to financial planning and investments. Traditionally men have saved for the future and taken big investment decisions while women have handled everyday finances and running of the household.

Many women say that they don’t find it enjoyable and sometimes lack the confidence to get into financial planning and investing for the future.

It is very important to get over this mental block and start by educating yourself about various financial instruments. Consult a financial advisor along with your spouse.

6. Avoid big risks in investments

Women also prefer to avoid big risks in investments. Look beyond just paying your bills and focus on investing for the future. Set bigger goals and plan effectively to achieve them.

Some women make the mistake of being completely financially dependent on their spouse, and this can lead to problems at some point in time. Learn to take financial decisions and manage your money.

Handle your savings account on your own and don’t make the mistake of having only a joint account, and no account of your own. You need to realize that this is not a matter of trust, but of being able to handle your money independently and in the way you think.

Best Bank Account For Woman

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Money-Saving Tips: It’s All In Your Habits

Are you one of those millions of people facing an ever-worsening financial squeeze? And the reason for this is not so much the bad economic conditions worldwide, as our habits related to money.

The need of the hour is to survive and systematically grow money until you reach a comfortable financial position. Saving and growing money is not a miracle, but the product of a particular mindset. And what is this mindset?

It is the way of life where one looks to converse money and not spend where it is not absolutely essential. At the same time, one needs to look at investing this money and creating wealth in the long run.

It has been said that a habit is a shirt made of iron. It takes a lot of difficulties to get into everyday practice, but once done, is almost impossible to dislodge. Here are 5 money-saving tips to get your finances back in the green.

1. Get rid of unnecessary expenses

This may include things you “think” you need but really don’t – like your landline number, expensive cosmetics, that trip to Goa you were planning to take next month. Until your finances are healthier, cut down on the frills and keep only the essentials.

2. Avoid shopping trips

Only buy things you absolutely need to have. You can order provisions from the grocer instead of going to the supermarket and piling up your shopping cart.

3. You don’t need a car

If you don’t have a car, don’t buy one. If you have one, use it sparingly. If you invested the money you spend on your car instalments, fuel, car insurance and maintenance, you would be able to spend on public transport just out of the interest you earned.

4. Look for bargains and discounts

When possible buy in a group so you can ask for bigger discounts. If you can bargain on price, do so. Avoid paying the full price whenever you can avoid it. A rupee saved is a rupee earned.

5. Spend less time with spendthrift friends

Do you have friends who want to go partying every night? You don’t have to cut off your relationship, but do spend less time with them.

And whenever possible suggest alternative activities that are not expensive. Some of the best things in life, like taking a walk in the park, are free.

That’s why we recommend you form good habits when it comes to money. That is the only way to achieving financial security and peace of mind.

financial consultant

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Learn How To Manage A Household Budget

With our limited resources we can’t buy everything we want. We, therefore, have to prioritize our wants and plan our expenditure accordingly.

Whether we like it or not, it’s important to have a household budget so that both ends meet and ideally with something left for savings and investments.

A budget takes into consideration past expenditures, an estimate of future expenditures and the distribution of current expenses on various items over a certain period of time.

There are three types of budgets:

  • Surplus: where income exceeds expenditure
  • Balanced: where income is the same as expenditure
  • Deficit: where expenditure exceeds the income

It is but common sense that you need to aim at achieving a surplus budget.

Steps involved in making a household budget

The three basic steps in making a budget are: making an estimate of the income, an estimate of the expenditures, and bringing the expected expenditures and incomes in line.

  • Make a list of the commodities and services required by family members throughout the proposed budget period.
  • Calculate a realistic estimate of the costs of the desired items.
  • Group the items on the purchase list together under different categories like food, income tax, housing, transportation, electricity, telephone, clothing, medical bills, education etc.

It’s crucial to involve all family members including children while making a budget. New Delhi-based writer Swati Chopra agrees, stating:

I feel children must value and respect money and so should be encouraged to make their own budgets. It teaches money management, and maybe a good exercise if done with parents to instil the values of using rather than consuming (i.e. buying what you really need and not because you can).

It can also be an opportunity to talk about economically sustainable lifestyle choices, such as buying cotton rather than synthetic clothes, how to limit paper consumption, electricity consumption, and so on, and telling children the value of each of these choices.

I don’t think it is necessary to involve young children in the family budget but they can be included once they are mature enough to understand what is going on.

In the Indian joint family setup, expenditures on dependent family members should be taken into account. Each family member should be reasonable in determining the amount to be paid of them and be generous enough to allocate more funds to a family member who really needs it (for medical treatment or education).

Family members must also be objective while chalking out the budget taking the welfare of the whole family into consideration, rather than personal interests only. Prioritise expenditures according to needs, and eliminate unnecessary expenditures that don’t fit into your budget.

Mrs Ramanathan, while budgeting categorises household expenditures and spends prudently.

The sum total of expenses includes fixed and variable expenses. Fixed are essential costs, which can’t usually be reduced or minimised, like food, repayment of housing loan, flat maintenance charges, school fees.

Variables are essential expenses like phone, electricity, clothing but they can be under our control. The number of calls or their duration can be reduced if planned, and the use of the AC, geyser and microwave can be moderated.

Every budget must pass through a reality check. It makes little sense to keep the expenditures ridiculously low, compared to what is actually required.

A budget needs to be checked on whether the needs of the family members have been met, the ability to pay bills or debts have been assured and inflation rates have been taken into consideration. Also, keep aside an amount for emergency funds.

Best Bank Account For Woman

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How to monitor your budget

Keep a reality check on your budget. Check if your monthly spending is going as planned at the end of each week and fortnight. Have you been spending beyond your means?

Have unforeseen expenditures cropped up? If you’ve overspent in a week try to curtail expenditures the forthcoming week to adhere to your budget. Brainstorm your family for ideas to cut down on expenses. Swati suggests:

Try to come up with ideas for alternative ways of meeting needs that may be healthier and ecologically more viable.

For example, using envelopes and the reverse of old notepads to save paper, organizing carpools to school or work to minimize petrol costs, walking wherever one can instead of taking autos or cars, using the cell phone only when necessary, and so on.

Cultivating an attitude of contentment and simplicity greatly helps too.

Why it’s smart to budget

The word budget may give the impression of an unfavourable restriction to the layman. In reality, budgeting only has positives. A budget ensures that you are not controlled by money, but rather it is you who controls your money with the aim of purposeful spending and judicious saving.

It chalks out a plan so that the family can enjoy itself to the best of its ability within whatever resources it may have. It helps to prevent the family from being extravagant and falling into debt.

When the money saved by successful budgeting is used later to buy your dream house or plan a tour of your lifetime- you’ll be glad that you did take the efforts to make budgets and stick to it throughout the years.

Disclaimer: All investments, including real estate, are speculative in nature and involve substantial risk of loss. The ideas and strategies on this website are based on personal opinion. They do not and should not be considered as professional financial investment advice and should never be used without first assessing your own personal and financial situation, or without consulting your professional investment advisor. We advise you to do your due diligence before acting on any information that we publish and do not, in any way, warrant or guarantee the success of any action you take in reliance on our statements or recommendations.

About the author:

Priya Florence Shah is the Group Editor at SHEROES and author of Devi2Diva, an emotional self-care book for women.

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