Financial Independence for Women: Steps to Take Charge of Your Money

This International Women’s Day, let us begin by reflecting on a few important questions.

How frequently did the women in your family talk about financial investments or building wealth or securing financial independence?

How many times did you hear your mother or grandmother be a part of discussions on how to manage the finances of the family?

Does wealth creation and preservation come as easily to you as it comes to your father or brother?

For generations, women in India were not typically involved in financial decision-making. This tradition left many without financial independence, relying instead on their male counterparts. However, in recent years, women have begun to of their financial futures, and this trend is only accelerating.

Indian Women & Economic Dependence

Women in India have been, for most part of history, barred from making financial or investment decisions, and were often relegated to mostly domestic tasks. In most of the families, the husband was the key breadwinner who took charge of the finances as well. As the Demographic and Health Survey (DHS) pointed out, women in India have historically been deprived of access to economic means, be it through education or opportunities, and were frequently denied involvement in decision-making at home. In 2023, The Directorate General of Employment (DGE) has reported that women's labour force participation still remains much lower compared to men, at less than 30% in the urban sector.

But there has been a consistent growth in women stepping into the workforce and working towards financial independence. With financial literacy for women on the upswing and an increasing number of digital tools becoming available, there are more and more women who are investing, saving, and managing their own finances today.

Why Is Financial Independence Crucial for Women?

Financial independence translates to women not having to rely on anyone else—be it a husband, father, or relative—to take care of or provide for them. This freedom allows them to make decisions, prepare for the future, and thereby accumulate wealth.

Financial independence allows women to make choices for themselves and not just on the basis of their need. It also safeguards them against unexpected events such as the loss of a job, medical emergencies, or crises in the family. For women, being independent financially and planning their own finances allows them to live life on their own terms.

How to Become Financially Independent?

If you are a woman just starting out your financial journey or are willing to upgrade your financial health, here is a quick guide on how to start.

• Start with being financially literate

  Knowing the basic principles of personal finance is the doorway to financial freedom. Build your foundation: learn about budgeting, saving, investment, and even debt management. Women’s financial literacy is largely delivered through internet platforms, which consequently form an excellent starting point.

• Create a budget and adhere to it

  One of the most important features of financial freedom is how to make money work for you by staying in control of your spending habits. Budgets make it easier for you to manage your income and expenses, save, and be careful not to overdo your expenses. You might want to opt for a concise monthly budget planner or a details-heavy expense chart to record your purchases per month.

• Build an emergency fund

  The emergency fund is the very first thing in a budget. This fund is a kind of guarantee to your family in unexpected cases like health issues or job loss. The target is to have an amount of 3 to 6 months of your expenses in a separate, readily accessible account.

• Start investing early

  Investing is the best possible way of earning wealth over time. The reality, though, is that most women are programmed to be risk-averse which is why they abstain from investing. Acquaint yourself with numerous investment options such as mutual funds, stocks, gold, and low-risk assets, for example, fixed deposits. For lower risk, you might also want to consider seeking assistance from a certified financial advisor or a certified financial planner who can specialize in crafting an investment plan that aligns with your comfort zone.

• Plan for long-term goals

  There should be a financial plan for your long-term goals such as buying a house, your child’s education, or retirement planning. Always remember, your savings and investments must align with your goals. A careful plan makes sure that you are always moving in the direction of your financial future, even as you take care of your short-term goals.

• Diversify your investments

  Don't put all your eggs in one basket. An equally weighted portfolio will ensure you control risk and build your wealth. Invest in a combination of securities such as stocks, fixed income, gold, and insurance. Go for an investment portfolio that fits your risk bearing capacity and long-term goals.

• Don't be afraid to seek professional help

  If you are not sure where to begin, do not be afraid to contact a certified financial planner or financial advisor. They will assist you in developing a sound financial plan tailored as per your goals and needs.

Other Essential Aspects of Financial Freedom

• Always have a bank account registered on your name instead of just having joint accounts
• Invest in a good medical insurance that covers your routine health check-ups and OB/GYN procedures
• Build your knowledge on financial planning to overcome risk aversion
• Set goals for yourself and plan your financial investments around these goals

Progress and Moving Forward

Women today are more economically powerful than ever before. Based on statistics from the DGE, more women are now entering the workforce and serving in leadership capacities in business and finance. This in turn has led to an upturn in women’s involvement in the management of family finances.

Financial independence is not a goal, it is a movement. Women are becoming more and more the financial decision-makers in their homes and communities, and the outlook is rosy.

This International Women’s Day, let us pledge to act upon achieving financial empowerment and accelerate our efforts in reducing financial inequality across the country.

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