The old model of financial planning basically exists for men, and thus needs reinforcement. These forecasts do not take into consideration females and therefore fail to provide adequate guidance in terms of women’s financial paths.
But what distinguishes women from other people when it comes to managing their own money? And why does carrying on with one-size-fits-all logic put them in a structural discrepancy that accumulates throughout the years?
Longer Life Expectancy
Females in the country tend to live longer than the male counterparts with a life expectancy of 71 years as compared to 69 years for the males. This means that women have longer lifespan stretching into their post-retirement income earning years, hence, they need larger retirement kitty to finance the longevity. This situation means that they endanger a chance outliving the cash that they have managed to save.
Career Breaks And Income Disparities
Self-employment is common among women who interrupt their careers for child bearing and child rearing as well as caring for other relatives. Such interruptions can reduce chances of a career advancement and hence lower one’s lifetime earnings. Also, increase in the gender pay disparities mean that women earn less than man hence, they save little and will not be able to invest much.
Financial Literacy Gaps
This phenomenon still persists in Indian women due to lack of financial literacy. According to a report of the Humanity Welfare Council, low level of financial literacy is observed in most women in India where 80% of them face some financial illiteracy while 62% of the women have poor or no access to the banking facilities. This gap hampers women’s capability in making the right decisions when it comes to finances.
Societal Norms And Decision-Making
The traditional culture expects the women to sacrifice their powers of decision making in financial matters to the men. This not only leads to their dependence on others for financial issues but also makes them have low self-esteem on financial matters. Such emphasis needs to be made to ensure that women present themselves to take visible parliamentary seats as well as seize any opportunity that is present with regard to active participation in financial arrangement and investment.
Risk Aversion In Investments
Research show that women are more likely to avoid risks as compared to men and hence are more inclined to invest in safe securities. But it is always wise to avoid risks that can slow down the flow of capital; in turn result in minimal returns on the invested money harming the long-term financial earnings. The current change in investing can be used as an advice to propel women to do more than just invest safely and make sure they begin adopting risky investments.
Strategies For Empowerment
There is a need to come up with a sound strategy to economically empower the women. First and foremost, increasing a wide range of financial literacy training to women will enable them to make the right decisions.
Women’s participation in financial matters within the households can also change existing roles and provide them with full control of their financial lives.
In the professional front, there is a need to ensure employment flexibility that may ensure women’s continuous employment so as to recover from financial cost resulting from career interruptions.
In addition to flexibility, remaking the policies and recruiting more organizational commitment to tackle the gender pay gap enables women to be paid equitably, thus the probability of their savings and future investment.
In addition, there are other factors on how to influence the women to be fully informed on various investment options, as well as how to strike a balance between risk and return so as to enable them build strong investment portfolios.
The Path Forward
The question that arises in this case is no longer whether there is a possibility of change or not, but as to how soon this change can be brought about. The pending advice of financial planning for women has come to show how it is high time to rethink it since the world knows that women will work towards changing the economic fortune of the world.
(The author is the founder, managing director, and chief financial planner at Dilzer Consultants Pvt. Ltd. Views expressed are personal and do not reflect the official position or policy of Outlook Media Group and/or its employees. The article is for information purpose only; please consult your financial planner/s before investing.)
