It's time for housewives to empower themselves on financial front
Written on Wednesday, November 25, 2015
By Anil Chopra- Group CEO & Director, Bajaj Capital Ltd.
A medical emergency in the middle of the night is always scary. Imagine, it strikes and the husband has to be taken to the hospital immediately. Typically, in most Indian households, it is the women of the house, who usually become active. From somewhere, she gets hold of cash, accumulated over period of time, and helps the husband in the time of need. Women tend to have a sense of savings. They have always been saving for emergencies situations. The time has come for them to graduate from just being a saver to becoming an investor. They have the all the ingredients and should stop under-estimating their money managing capabilities.
Housewife has very critical role to play in every family because they control the budget and they can set the culture whether it is saving culture or spending culture. In Indian society where saving for rainy day is considered very important housewives can play very important role by following austerity and by remaining within the budget and by saving something out of the monthly allocation which they get from their husbands. They can do smart planning within their budget whether it is Kitchen Budget, household budget or School fees budget. And also it is seen that in most families the working spouse is the one who take most of the financial decisions but times are changing now and housewives are also need to play very active role by ensuring that some proper planning being done to take care of the long term goal.
Now what has been seen in Indian society that most housewives who do not have a proper educational background will go on hoarding money, saved out of their budget either spending it recklessly or just may be accumulating physical Gold, which is not very healthy and it’s time that housewives should be educated through Radio or through magazines or through some seminars about the constructive role which they can play in building robust financial planning system for their family which will take good care of their immediate and future goals. Also it has been seen that some housewives indulge into monthly committee or monthly kitty system, where they are able to save Rs. 5000 – Rs 25000 depending upon husbands income or family over all income and they end up accumulating that through unstructured ways and they end up with buying some irrelevant or not required items like gold, personal consumable things.
So instead they should invest their savings in Systematic Investment Plan (SIP’s) with a long term horizon which can actually create wealth apart from necessary tax saving which her husband must be doing already. But whatever budget is in the hands of the Housewives if they are able to save some part of it rather than consuming it or spending it on irrelevant things or buying physical Gold every now and then and if they can put it to some long term schemes then lot of family future can be brightened and it can be improved considerably, the children can be given much better higher education and the retirement can be much more comfortable and over-all status of the family can be improved. So it is important that the basic fundamental principles of financial planning are known to every housewife.
The First Step
To begin with Housewives need to take complete interest in the financial matters by discussing with husband, understanding whether all the needs has been taken care of or not. Starting from first buying a Health Insurance Plan or Family Floater Plan, whereby paying some Rs. 15000-20000 premium, reasonable sum insured can be taken for unforeseen medical expenses which may come to any member, whether young child or housewife herself or husband or the parents. Otherwise if proper Health Insurance Plan is not there, if any illness comes in the family all the saving which housewife has made, hidden from husband etc. all that will be lost by just one stroke of medical illness.
Similarly housewives have to ensure in consideration with their husbands that there is enough protection on the family in case of the unfortunate event happening, so there has to be adequate Life Insurance Cover which can in the shape of term plan, which are low premium and high protection schemes. Generally it is said that the 7 times of the household annual income should be the sum assured. So if the husband income is Rs.15 lacs in a year, so housewife must ensure that Life Insurance of at-least Rs.1 Crore should be there for just in case any uncertain things happens then the family status is not disturbed and the children education & other Goals which are pursued without any hindrances.
Even if she has a special liking of physical Gold, she should consider other options like a going for gold ETF or going for SIP in a Gold fund to get the benefits of the appreciation in the Gold Prices but without the risk of keeping physical Gold at home or in locker. Some housewives wile away their time in playing cards of going for kitty parties etc. which is complete waste of time (which can be utilized for ) if the same amount of time is spent on doing some quality research on internet and taking some financial decisions which will improve the family over all wellbeing, that is something which housewives should consider.
First of every housewives must be financial savvy and they must a Bank account and cheque book and they must learn to how to operate the Bank A/C. So that whatever saving they make from monthly budget so that it can deposited in Bank A/c rather then spent or hoarded in house and then through cheque book the same can be invested systematically in different good schemes which can build a good portfolio.
When we talk about housewives we not only discuss about middle class housewives but also housewives of very rich industrialists or high earning MNC employees. So, some of them may get access to Rs1-2 lakh a month or even higher budget to spend upon the household. So if they do it very intelligently and smartly they can always carve out good amount they can create a separate line of income or separate portfolio which can be very handy for the future goal of the family.