4 Myths about women and money you need to stop believing

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4 Myths about women and money you need to stop believing

02 November 2017
Women have often been looked at as less capable than men when it comes to managing money. But that''s all changing.
 
 

The 2011 census found more than six out of ten women to be literate; almost a twofold increase from the 1991 data.[1] While the numbers prove that Indian women are taking large strides in the professional sphere, there are still certain beliefs regarding the way women deal with money, their financial participation etc. 

Here are a few myths that are wrongly trotted by many in the country.

Related: Hacks to improve your financial situation: A guide for women

Myth: Women are impulsive spenders and cannot save money
It is a common perception that women love shopping and that they often end up spending all their savings this way.

However, various studies have found that women are keenly aware of the importance of saving. The concept of saving for a rainy day is not lost on them. Remember your grandmother who always had money when you needed it? A typical homemaker always saves some money out of household expenses. 

Related: Why a women special credit card makes a great Raksha Bandhan gift?

For instance, Vareen Gadhoke Ray, a Bengaluru-based homemaker, started investing in mutual funds in 2003. Fast forward to 2017, and she has already paid the down payment on a house and has saved for her daughter’s education.

Myth: Women can’t make financial decisions as they are averse to risks 
Men and women have different approaches to investing. Several studies have found women to look for “security” in their investments, while men are prone to taking risks. But, women’s natural aversion to risk make them better long-term investors. Even the ‘Oracle of Omaha’ Warren Buffett advocates this approach, as he himself once said that his favourite holding period is “forever”.[2]

Myth: Women do not understand financial products

There is a popular misconception that Indian women don’t understand financial products. The fact that only 23% of women in India make their own investment decisions [3] does not help dispel this myth. But, financial literacy is not high among men either. The same report found that men were only marginally better. This shows that ignorance about different investing options is a pan-India problem.

Related: Your guide to choosing the best Health Insurance Plan for a woman

The financial literacy rate is increasing in India, thanks to extensive advertising by financial services providers and investor education initiatives.

 

Myth: Women lack mathematical acumen
This is, by far, the most bizzare misnomer pervading in our society. Mathematical acumen has nothing to do with gender. History bears witness to the fact that women not only have mathematical acumen, but have also broken the glass ceiling to secure top jobs at financial services firms. Be it Anu Aga, the ex-chairperson of Thermax Limited and once the eighth-richest woman in the world, or Shikha Sharma (CEO of Axis Bank), women have proved their acuity time and again.

Image text: Indian women who head banks

Arundhati Bhattacharya- Chairman of State Bank of India (SBI)
Chanda Kochhar- MD and CEO of ICICI Bank
Shiksha Sharma- MD and CEO of Axis Bank
Naina Lal Kidwai- Chairman of HSBC India and FICCI (Federation of Indian Chambers of Commerce & Industry) India
Source: http://www.jagranjosh.com/articles/indias-most-powerful-women-bankers-1443618501-1

Though there’s still a long way to go, women have slowly begun to take hold of their financial futures. What’s more? A recent report published by the CFA institute, says that women are expected to control 75% of the discretionary spending in the world in another ten years.[4]

 

Sources:

[1] http://censusindia.gov.in/2011-prov-results/data_files/india/Final_PPT_2011_chapter6.pdf

[2] http://www.investopedia.com/financial-edge/0210/rules-that-warren-buffett-lives-by.aspx

[3] https://www.jagoinvestor.com/2013/07/women-and-investing-decisions-in-india.html

[4] https://www.cfasociety.org/arkansas/Documents/Microsoft%20PowerPoint%20-%20WealthManagement2015BeyondJan2015.pdf

 

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