Editorial > Women Manage Households and not Money; Leave the Money Management to the Men
Women Manage Households and not Money; Leave the Money Management to the Men
Dais Features | 08/03/2021 06:00 PM
…Now that we have your attention, let’s clear the first thing first – the above statement is utter rubbish!
From starting out successful ventures from scratch to helming uber-productive businesses, women have made their mark everywhere- Breaking glass ceilings at every stage of their journey. There was a time when this too was considered a utopia for them – but they climbed out of the depths of that trench and proved that it was not just a man’s domain.
But unfortunately, while acquiring new skills, women decided to forget some valuable old ones. Money management was something that came naturally to our grandmothers and great-grandmothers. These women of yore managed household finances so deftly that they would always have enough saved for a rainy day.
A lot of them even ‘introduced’ their families to traditional systems of investing – deposits, hundis, and oh.. gold! Why then, did women forget this basic part of their DNA and decide they can run entire companies but cannot fathom how their families would invest and grow their wealth?
Dais World begins its journey of traversing the wide-wild-world of Money Management with an experienced and conscientious partner on its side, Harsha Vardhana V M, Founder and Managing Director of Atom Privé Wealth Management. And what better way to begin than to shake up half the world that silently but surely believes that it is not their cup of tea.
On the occasion of Women’s day, Harsha shares his perspective about the pathbreaking role that women have and are capable of donning in the family’s financial journey while impressing upon us some eye-opening reasons why it is important for women to know this art and science – Now, more than ever.
Women are creators – in every sense of the word. They create life, they create livelihood, they create businesses and they also create sustainable growth in everything they do.
As economies the world over begin accepting that even the woman who is a homemaker is actually contributing to the GDP and her ‘services’ to her household and family must be measured in monetary terms, we cannot afford to ignore that acknowledged or unacknowledged, paid or unpaid, at home or at an office; women heavily contribute, and also control a large portion of the economy’s wealth.
A lot of them do start their careers in the financial industry and many more of them go to the C-suite positions as they cross every hurdle (read: Childbirth, elder care, health issues, spouse dependencies, and so on) – so what is it that keeps them from the thought of managing their family’s wealth? We delved into some common reasons we came across in our experience -
1. Self -doubt: This is the first and foremost hindrance in most female clients we met. They are extremely confident of taking multi-crore decisions for their companies but when it comes to their own portfolios – their shoulders begin to droop and they start looking around for a male family member to help them out of this ‘misery’. Often, the men ‘help them out’ – a father, a husband, a brother or even a well-meaning cousin would do. Everyone else is capable but themselves.
2. Inexperience: It is, unfortunately, true that a lot of women have perhaps seen their mothers asking for a set budget from their fathers and running the household with that money. The savings were tucked away in a pickle-burni or in the bed. Too much gathered, then perhaps a gold or silver coin. The ‘main decisions’ of the family’s wealth were taken by the dads – going to the bank, making FDs, buying insurance policies or properties even. Occasionally, the mom contributed to the decision-making process, but never took the reins of it.
As time progressed, women started working and earning a living for themselves and their families, but money-wise, their minds remained confined to the pickle-burni because that is all that they had ever learned.
3. Others-before-herself: It is in a woman’s nature to care for others, sometimes.. actually no.. many times even before herself. So even if she seems like an independent, well-earning, empowered individual – back home, she actually still believes she is only adding to a ‘family kitty’. And who is the decision-maker of the kitty? The man of the house. In the process of earlier nurturing the kids and managing the household and now raising companies and driving KPIs, her ‘motherly’ nature of putting-others-before-herself has just taken a new avatar not changed. She confines her understanding and her level of control to her allotted areas and lets others take over everywhere else, most importantly in the money matters.
4. Lack of interest: Do not smirk, this is the truth. The most important and prevalent reason is the sheer lack of interest. The question of ‘Why’ that comes to women when it comes to money. “I have a husband/father/son/brother/maternal uncle managing wealth for the family and they are very good at it. Why do I need to bother?”
While we address the above three reasons too in our current and subsequent features, it is the inertia we sense in the fourth reason that compels us to shake our women investors up in this particular one.
1. It is your money – you can trust someone else to help you with it, sure. But you should know what’s happening with it and hold the reins in your hands
2. Traditional forms of investment lack the lustre – The gold coins and insurance policies, the large land parcel, and the fixed deposits – the way traditionally your family managed money is no longer valid. You need to learn quickly and you need to learn NOW. There would be no wealth left to manage otherwise.
3. You are good at it – India’s Finance Minister is a woman. The country’s top bankers are women. My co-founders at Atom Prive are women. And beginning at home, my wife heads the advisory desk of a major Multinational bank and guides the thought processes of an entire financial organization. Women are instinctively drawn to making sound investment decisions and their ability to reach goals is usually quite exceptional. Take the lead in your financial decisions and creating wealth for yourself and your family – trust me, you are good at it.
4. The gender pay gap is real - This is that unfortunate elephant in the room that not many like to address. You are seldom paid more or even as much as your male counterparts (a study places that number at 25% lesser than a male colleague with the same KRA)– various reasons – but the fact remains, the gap exists. And until the glass ceilings are completely non-existent, it is wise for you to take control of your own finances and safeguard your interests. You never know when you may need it.
5. You live longer – Like it or not, you are probably going to outlive most of your male decision-makers. And then, you will be compelled to make these decisions yourself. At that time, you will either learn in a haste, learn with costly mistakes, or again, depend on a man to manage it for you. I am sure you get my drift by now... This dependency needs to go.
Cheerfully ever after… or until we run out of money. No thanks, to the latter. Yes, to the former.
6. Mid-career breaks would come: Marriage, pregnancy, caregiving for one’s parents/in-laws, an important school year for the kid – women are more prone to taking a mid-career break than men. Often, when they return they don’t get the same position and remuneration that they left at.
But it is not always a bad thing. Taking a mid-career break offers the perfect chance for a woman to mentally recharge herself, provided she has planned her finances to sustain her lifestyle when she is on a break from work. The sabbatical must be a blessing. Not a curse.
7. Your parents could be dependent on you: It is possible they depend on you in their later lives for basic financial needs. It is furthermore possible for them to depend on you to manage their money because you are the only one they trust. What do you do then? Read some DIY articles and make band-aid decisions? No. You know that’s not how they raised you. And you have a larger responsibility than that.
I am sure the above has evoked interest and perhaps some worry too – “yes, I need to learn.. but where do I begin?” Let’s help you with the first step and draw out a checklist of 10 basic thumb rules or ‘mantras’ like we call them.
1. Treat your money like you treat a child. It needs care, nurture, attention, and perspective – every day.
2. Understand your household finances: That is where budgeting begins. Jot down a list of major expenses :
- School fees for the kids
- Credit card bills
- Social spends
- Parental care/Medical expenses
Try to get to a point where all the above does not cross 50% of what you earn in a month. The rest of the 50% of the recurring income should be parked away in investments (not savings, investments!). Maintain a 60:40 there too – Keep 40% for immediate short-term use (emergencies, holidays etc.) and use 60% for longer term portfolio plans.
3. Start a fund for your child’s future education with your child as the minor holder and you as the guardian.
4. Include some beneficial tax-saving options such as Provident Fund, Public Provident Fund, and Rajiv Gandhi Equity Saving Scheme (RGESS) in your investing life. Try to max out on the Employee PF deductions from your salary and utilize Conveyance allowance, Section 80C, home loan interest, Mediclaim and HRA to the utmost best. Involving a tax advisor and your company HR may not be a bad idea.
5. All work and no play is not good for anything, not even money. Keep little incentives for yourself. Spend on yourself on every wealth milestone you achieve. It will encourage you to keep going. But, but, but be conscious of the Credit Card Trap. Have a card, but aim to clear the dues by the due date. You should know the bank charges you 36% p.a. on unpaid dues. Also, track other charges such as joining fee, annual fee, and late fee in your statement. These are leakages, plug them.
6. Pick Debt carefully – Home loans, personal loans, credit card loans, overdrafts, loans against property, or jewelry are not just a lower and middle-income household phenomena. We see a lot of affluent families get into these traps in a bid to invest more in their businesses or merely to do a favor to their bank relationship manager. Reserve all favors to yourself – don’t take loans where not needed, especially if your investments earn you less than the interest you are paying to borrow.
7. A portfolio to manage 5 years’ worth of expenses - If you spend 1 lakh a month, aim to have a portfolio of 60 lakhs. By the time you retire, you must have about 10 times your salary as your portfolio. Don’t forget inflation. You drive a car more expensive than your parents’ first home. That's inflation for you today!
8. Aim to create long term wealth for you and your family –
Here’s what your dream basket should look like-
- At least 5 percent of post-tax income every month.
- Short-term monies: money market funds.
- Medium-term monies: tax-free bonds and debt mutual funds and structured products.
- Long-Term monies: Equity stocks and equity mutual funds.
9. Prepare for the worst:
Death is inevitable. Personal accidents happen. Chronic Illnesses drain out ancestral wealth. Prepare yourself and your family for these situations:
- Create a 24-hour emergency fund with 3-24 months of expenses parked in it
- Have an updated Will and update your nominees in all your investments.
- Your Life Insurance cover should be ten times your annual income if you have dependents.
- Consider Disability insurance if your family depends on your monthly income.
- Health and critical illness insurance is not a luxury anymore. Get adequate cover.
10. Build a gut for risk: Create a fair mix of investments and don’t go overboard doing anything. Take time to set the initial plan in place which has a mix of investments and long-term assets. Once done, review it regularly for performance and recalibration. A few months of underperformance or a sudden event should not perturb you and throw you off-track from your path. Read and enrich yourself with knowledge and don’t be afraid to ask questions to your Wealth Advisor. You may only sound stupid once but you will be equipped with information for life.
Candace Bushnell once said – “Women with money and women in power are two uncomfortable ideas in our society”. Well fortunately for us and unfortunately for them, we have both today and the number is only compounding exponentially. What isn’t catching up though is the confidence of women in their own abilities.
As you shed the importance of the Knights in Shining Armour in your lives and exude power and tenacity in everything you do, Dais World proudly encourages its women readers to build on this one last aspect that now screams for attention. In our subsequent parts, we will keep unraveling the ‘terms’ and ‘jargons’ that wealth managers often throw around to showcase knowledge superiority.
The endeavour is to make this Feature your go-to resource for everything you hear out there and need a sounding board to guide you while you navigate the World of Money.
H a r s h a V a r d h a n a is the Founder and Managing Director of Atom Privé Wealth Management and the heart, brain, and thought behind this Feature.
Having been in the industry for over 19 years now, he wanted to incorporate the best of what the wealth management industry has to offer with the change he genuinely wanted to see in it.
Every client at Atom Privé is a growth partner and every approach is centered around what is most important to them. He therefore strongly believes in walking with them in their wealth journey by adopting the most holistic approach.
Dais World proudly partners with Atom Privé to guide its readers on the rewarding path of Money Management. Feel free to reach us at
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