2017 / 14 August

Should Married Women Worry about Knowing their Finances?

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A Woman who believes in financial planning for women

The other day, I showed my wife our investment portfolio. I was feeling good about the profits made over last couple of years and thought that it was a good time to do this. So, I started,’ Jaanu (Indian equivalent of Honey), let’s do a quick review of our investments. It’s been some time that you saw this.’

 

‘Oh, you are taking care of it, right? Why do I need to see?’, She gave the oft-repeated response that I was well-prepared for.

 

‘Lot has changed between the last time you saw our investments and now. You need to be updated about where is our money invested and how is it working for us.’

 

‘Ok,’ came the most reluctant response which I took as a ‘yes’.

 

‘See, our Equity Mutual Funds have given a fabulous thirty percent profit in last one year. But our Debt Mutual Funds have give only twelve percent. Overall, we made twenty percent profits,’ I stopped short of thumping my chest and was expecting a cute ‘wow’ from her.

 

‘Why didn’t you invest all the money in Equity Mutual Funds? The Debt Mutual Funds have pulled our profits down,’ She was as irritated as my boss during the annual performance appraisal.

 

As with the boss, all my hopes of any little appreciation went for a toss.

 

‘So, why don’t you invest the money yourself? Anybody can make great decisions with the benefit of hindsight,’ I don’t need to tell you what happened after that.

 

I have come across many examples of women not taking an interest in the investment side of financial matters of the family. They are quite good at taking care of expenditures, working within the budget and cutting expenses. But they do not realize how important is financial planning for women. Whether it is a result of social structure, upbringing or something else, this trait is common. Most girls have seen their dad take care of investments and subconsciously do not feel responsible for doing this themselves.

 

Nitin is a well-paid management consultant. Over a career spanning more than a decade, he has earned well. He has been investing the surplus money as per the advice received from investment advisors and his own understanding of what’s hot. His wife Anita is also a working professional, managing her time between the job and their two little kids. Nitin is travelling most of the time due to work and plays hardly any role in running the household.

 

One day, Nitin asked Anita,’ I have been thinking of collating all our investments at one place. Come, let’s open our laptop and do this.’

 

‘I have to take kids for the Karate class and then I will be back just in time for dinner. If you like we can spend our weekend night doing this,’ Anita replied sarcastically.

 

‘See Anita, this is important. I travel so much, I hardly get any time to systematically plan our investments. I am afraid, all the wealth that we imagine to be held in our investments may not be generating great income for us.’

 

‘You are not around most of the time. I have my job, kids and all the home related responsibilities. How do you even expect me to start looking at financial investments? I don’t even have a finance background. Today, we have a little free time and you want to discuss finances. This life sucks!’

 

First, Nitin was irritated with himself for not managing the investments well and now, he lost it completely,’ How do I convince you that this is important for both of us and our kids? If need be, we should drop everything for a couple of days and do this.’

 

‘I understand that this is important but I have so much on my plate. Oh God! You feel that I just do time pass at home and have all the free time in the world. I am willing to take a couple of days off from work. But you need to guarantee that you will also take leave, switch off your cell-phone and not rush out abruptly in the name of a client call.’

 

Both of them got the point, luckily. They actually took a few days off from work and sat down to get their financial investments in order instead of heading out for a weekend holiday. They even invited their trusted financial planner to help them. It was time well spent. They realized that over years, they had invested more in real estate than was required. Their investments in equity mutual funds and debt mutual funds were disproportionate and needed to be rebalanced. In her zeal for collecting gold ornaments, Anita had ended up buying lots of unbranded jewelry of dubious purity. It had little value as an investment.

 

Another couple, Jatin and Smita, were managing their investments supposedly well. Jatin is a finance professional and invests their money according to his judgment. Smita is a professor in Delhi University. They transfer their surplus money into a joint account and Jatin makes the investments from there. All was going well when, one fateful day, Jatin called Smita,’ I have been thinking of talking to you about this for some time. But I cannot postpone it any further.’

 

Smita was surprised at the formal tone of his voice,’ ok, tell me.’

 

‘Listen carefully. I am done with our marriage and I want divorce. This is my last call to you and I am not even coming back home.’

 

Smita was shocked so much that she nearly fainted. She called her best friend after recovering a bit. Couple of days later, her sister and parents arrived to provide emotional support.

 

Her sister, a practical women broached the topic of finances after a few days. Although, Smita was self-dependent with her job, she had no idea where their savings were. Her sister could not find any records of their investments, insurance policies, medical insurance and bank lockers where the jewelry was supposedly kept. She only found the statements of Smita’s salary account and the joint account. There was no money left in the joint account. In effect, Smita was left with some cash at home, her provident fund account and few pieces of jewelry. She had no clue about their joint mutual funds holdings, property investments and fixed deposits. She didn’t even know if these existed as joint investments or she will have to beg in the court for her fair share of the wealth.

 

Even more unfortunate is the case when something happens to one of the spouses or both the spouses abruptly. It is absolutely important for the surviving spouse to know the exact details of all financial matters. The best way to do this is to tabulate all details in an excel sheet and share a copy with each other. In addition, another copy should be shared with a trusted family member. This is also a reason why financial planning for women is so important, to be involved during investments.

 

As a logical extension, one should get a will prepared with the help of a lawyer. The will helps the transfer of ownership to the surviving spouse in a smooth manner helping to quash any malicious disputes by other family members. The will is especially handy if something happens to both parents of surviving kids. The will describes not only the transfer of assets but appoints the custodian of assets and the guardian of the surviving children clearly. Any age is a good age for creation of will.

Knowing about finances and financial planning for women is an integral part of women empowerment.

P.S: Even though the examples given here are from a woman’s perspective, in few cases reverse is also true. If you are a man and not taking enough interest in your families financial investments or doing it passively, it’s time to buckle up! More on this soon.

You may also be interested in one of my other articles, Time to Relook at Your Financial Planning?

My book Happiness is All We Want! is available on Amazon.in and Amazon.com.

Feel free to leave your comments here or write to me at info@ashutoshm.com

 

Ashutosh Mishra - YouthCoach & Author

A seeker and explorer in the quest for lasting happiness, health and well-being. An MBA from XLRI Jamshedpur and a Mechanical Engineer from IIT Delhi. Has been a senior banker with large global banks like Goldman Sachs, Deutsche Bank and ANZ Bank. Working in these demanding global institutions with a gruelling schedule and plenty of business travel. Was fortunate to realise the importance of health and wellbeing early on. Learnt and practiced many wellbeing tools and techniques to focus on his own well-being while balancing the demands of a high-profile career and a lovely family.

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  • Nice financial advice for each one of us from any walk of life.

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  • I would appreciate if we find actual reasons why females dont take much interest and take steps to generate awareness then how much important it is for women and break the myth that only men will do financial planning . Generally in a couple one do investment but other spouse is not aware of the investments . This should be discussed in fmly in a transparent manner plus all investment should have spouse as nominee.

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