Women And Money: How Exclusion From Financial Matters Affects Women

Despite many years of work experience and a decent knowledge of finance, Shashi Kala, a government job employee in Meerut, relies on her husband and son to handle her income. “Time ki problem hai (There are time constraints),” Shashi said, explaining why she has been unable to put her knowledge to use. “The mind is already occupied with office and home responsibilities, that there is no time to invest in anything else post work hours.” 

Shashi, like numerous women in India, is dependent on the men in her family for investments and financial matters. Out of India's population, women constitute 48.4% of India’s population but the proportion of working women is only around 20%. Even in this significantly small number, only a small fraction of women actively participates in shaping household financial decisions. As per the ‘Financial Inclusion of Women’, a report by Observer Research Foundation in December 2022, only 18% of married women with earnings made autonomous decisions on how to spend their money. But the exclusion of women from financial matters does not start only after marriage. Instead, it can be traced back to much earlier stages of their lives.

Patriarchy and Finance

“Men have more understanding of finance as compared to women as from a young age they are included in the financial decisions of the family and parents also prefer to teach them about finances,” Gitanjali Saini, a software engineer in Gurugram said. According to her, it is a preconceived notion that unlike girls, men do not need to be taught about money matters, which isn’t true. “Boys are made part of financial discussions in a family from a very young age, so it’s obvious they would already know a lot of stuff,” she added.

Elaborating on how patriarchy restricts women from taking financial matters in hand, Monika Halan, author, and chairperson, Sebi Advisory Committee for Investor Protection and Education Fund (IPEF) said, “It really starts from our home and then there is a social reinforcement, which perpetuates through life. The girl is encouraged not to even ask too much. So in the parents' home, she doesn't ask and you definitely don't see women asking for a share in the in-laws house. So there is a gender gap and it is to the detriment of women that they give up the money control to the men in their life.”

Highlighting the unrealistic expectation that society has from women, Bhavana Joshi, who has a government job in Delhi said, “When women work outside, they are expected to complete household chores both before leaving for work and after returning. If they come late from office due to any reason or if she seems happy in the office, family members assume that she is involved with someone.” Joshi said some of her classmates in school and college were not even allowed to study after Class 10 or 12, so that they could learn household work.

These stereotypes and segregations are further ingrained in matters of inheritance, especially in business families. Halan said that business families prefer assets to be inherited by male heirs. “So the less the girl child knows about the family assets, the better it is. She is typically given a royal send off with what can be called dowry, gift or whatever you want to call it. But essentially that's what her share is. It's changing now in certain families in the urban metro but that would still be a minor percentage of the population.”

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Bridging The Gap In School Curriculum

Saini believes that her dependence on her colleagues and friends for financial knowledge also arises due to the absence of personal finance as a subject in school education.

Speaking on the importance of financial education, Nisary Mahesh, founder and CEO, HerMoneyTalks said, “Money management is a life skill because just like you learn swimming, which is mandatory in our curriculum nowadays for most schools, financial management should be a mandatory topic. But unfortunately, this is not the case.” Mahesh added that we often rely on our parents or peers to learn money management skills but that isn’t the best approach. “What our parents were doing years before is no longer relevant today. Men have been learning from their peer groups, which may be wrong advice also. That's why a lot of scams and a lot of financial mismanagement is happening in our society.”

Subsequent Repercussions 

From isolation in financial discussions to experiencing a lack of confidence in social circles, not taking charge in money matters can have multiple repercussions for women. Lack of awareness, according to Mahesh, impacts women’s confidence to take any action in life and they remain devoid of the self-satisfaction that financial independence brings with itself. 

Enumerating the social impacts, Halan said, “A lot of jokes are often made about women who spend a lot or the men say we earn, so that they can spend. So there's a lot of signaling through anecdotes, jokes and the media on the two genders and their attitudes towards money, where women are portrayed to be the ones who spend and the men are portrayed to be the ones who earn and invest for a secure future.”

Akanksha Mishra, who works in corporate communications in Bengaluru, said that she feels underestimated or patronised by the opposite gender in finance-related discussions. “I do feel that in a group of people (mostly men) discussing financial investments, I have never been asked questions about my investments or willingness to manage my finances in terms of investments, despite these discussions happening around me all the time.”

Another prominent and long-lasting impact for women is experiencing indecisiveness in financial matters during challenging times within a family, such as coping with death or going through a divorce. “We don't discuss death as much as we should. It seems like a taboo subject but it will happen to each one of us.So why not just have that discussion to figure out if this does happen untimely what happens then to the survivors,” Halan points out. 

Explaining this further, Mahesh concurred, “In many families, women don't have an open conversation and are not aware where all their husbands have invested or the kind of liabilities they have. But when something goes wrong, only all this will come into picture or you lose the money.” 

Another important reason for women to manage their own finances is that, on average, they live longer than men. Mahesh said that this could lead to a lot of troubles once they reach retirement, and their spouse is no longer with them to guide. It is then they realise that they have been depending on somebody and have not made a retirement plan for themselves, which means they will have to depend on their children now.

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Way Forward: Journey To Financial Independence

Closing the evident gender gap in financial literacy is undoubtedly crucial, but examples of women who despite having enough knowledge and resources do not manage their income, highlights that the journey towards financial independence is indeed a long one. Mishra, who handles her finances herself said, “Financial independence started with my first job. It began with the withdrawal of my first salary. Thanks to my sisters and my mother who had already been managing their finances for years, they guided me. I started stock-investing and mutual fund investments with my first drawn sum.”

Reiterating this, Halan said, “I think parents, i.e. the woman and the man in the house, should start having the money conversation with each other. Children will do what you do, not what you say. The first thing is to begin with the older people in the house and discuss things like where are the assets and in whose name are they? Where is the paperwork? What happens if one of them dies?”

While men do play a consequential role in the overall inclusion of women in financial matters, it is also up to the women to make an effort to step out of their comfort zone and realise the importance of financial literacy. Mahesh said, “Some women feel that they won’t understand finance and need somebody’s help to manage it, not realising the consequences at the point, and being in their comfort zone.” Mahesh, who also runs entry level orientation workshops for corporate employees added, “Financial education is not part of a curriculum but the moment you enter the job, the moment you enter the job, that's the time you should start having a financial discipline.”

Highlighting the key challenges faced by women on their way to financial education, Mishra said,  “I face difficulty in understanding the jargons and reading the candle charts. Share market is extremely tricky for somebody like me who has problems understanding numbers and graphs. Also, with YouTube videos it's very normal to find two contrasting videos on the same subjects and that makes decision-making extremely difficult.” 

Halan, who has written books including ‘Let’s Talk Money’ and ‘Let’s Talk Mutual Funds’ emphasises on relying on books for increased clarity at initial stages, “My first book, ‘Let's Talk Money’ has been a big attempt to dejargonise terms related to finance. Although the book was not written with women in mind, women have found it easier  to understand the financial sector through the book. If one book can make a difference, I'm sure every institution can reach out to their employees to make it easy to onboard women because it isn't that women are stupid, it is that finance is being made tough. Don't talk down to women when they dare to come into a bank or be in a financial institution.” Halan encourages women to read on their journey to financial empowerment as the websites will update one with news. But without understanding the basics, one cannot decode the news.” 

Highlighting how career breaks impact women psychologically and emotionally, Mahesh said, “We have helped a lot of women who are on a career break to return and start their own investments because these are women who are educated in the urban areas. But due to biological reasons, say, when you have a kid, you have to take a break. Many of these women have the frustration in mind, where they may feel that they are getting outdated or they are not good enough for a job or they are not earning, they are not having financial independence.”

The relevance of financial education in life can be summarised through an anecdote shared by Halan. She said, “I learnt swimming very late in life and when I was trying to learn in the shallow, my husband told me those who learn in the shallow will never learn to swim. You have to come to the deep end. I said I will learn and I'll see you on the deep end in a month and I did that. So you’ve got to challenge yourself and say, I'm gonna empower myself and meet you. I'll meet you with an equal amount, or if not equal, at least a reasonable amount of knowledge and be able to discuss with you at par because your future is at stake.” 

“Love doesn't make the world go round. It helps. But what you need is hard money to live your life. So unless you want to give that power away to somebody who controls your expenses or everything you need to empower yourself,” she added.