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Durga Without Dollars

The implausibility of female empowerment without financial planning


“In the event of an emergency, please put on your own oxygen mask first, before turning to help others”: Standard safety advisory issued by airline crews in every flight.

My oxygen mask first! Before my own children!!! What kind of parent can be as selfish as that? A smart and responsible one perhaps. A parent who delays putting on their oxygen mask will be rendered incapable of helping anyone within seconds due to hypoxia. Denying ourselves in favour of our loved ones may feel like the right thing to do but can actually be short-sighted, ineffectual and irresponsible. At times, thinking about ourselves is the smart way to think about our loved ones.

As with flights, so with finance. Consider the following facts:

  1. Worldwide a majority of the female population of employable age does not have a regular income stream.

  2. Women often need to suspend or sacrifice their careers after childbirth or due to care responsibilities for other dependents; even when women do rejoin the workforce after a sustained break they can struggle to catch up with their previous career trajectory and remuneration.

  3. In many countries, expensive childcare can make it uneconomical for women to return to work after childbirth.

  4. Women tend to outlive their partners

The combination of a societal model that often treats employment for women as a discretionary luxury (in practice, if not in rhetoric) and of female longevity, makes it really important for women to be focus on achieving financial independence or the very least on minimizing their financial dependence.

Any quest for financial autonomy must be built around more than just personal savings squirrelled away in bank account or fixed deposit. The reality of inflation requires a commitment to not just saving but smart, informed and educated investing. This can take many forms from investing in gold to mutual funds to real estate to equity linked life insurance. The key is to practice personal financial planning with systematic intent.

Leadhers(www.leadhers.co) recently conducted a survey of circa 250 women living in urban India, to understand the attitude of urban educated Indian women to financial planning. The women were contacted online and self-selected themselves. As such the sample should not be taken as truly representative of urban Indian women. The results should be treated as indicative though I hope to broaden this to a wider group of respondents over time.

Among those who responded, 66% are employed full-time or are working freelance. The remainder are on a career break or are home-makers.

Some of the key findings from the study were:

  • 70% of the respondents chose the option of prioritising their family’s health, well-being, financial future before theirs.

  • Only 48% have a health insurance in their names. This number corresponds to the ones who are employed and have health insurance package as a part of their employment contract. This leaves the remainder 52% who work part-time, freelancing, on a career break or home makers without independent health cover. Even if they are covered under their partner’s insurance policy, this leaves them vulnerable to coverage deficits any time their partner is in-between jobs.

  • Only 28% of the respondents have a pension plan, which could be interpreted as a failure to plan for their future over the long term.

  • The vast majority of women professed discomfort in making investment decisions; 90% of women said they left all investment decisions to their spouse.

Taken together these findings point to a ticking time bomb and a surprising renunciation of female agency. After all we are talking of educated women who presumably seek parity with their male counterparts in other fields of life. Neither is the matter entirely mitigated if the spouse is responsibly investing on the woman’s behalf. A benevolent spouse investing on our behalf is of course not to be dismissed but marriages can sour or calamities can happen. It is not unheard of for greedy relatives to seek to usurp financial assets while delegitimising the claims of the spouse, in the aftermath of a bereavement. Neither is it unheard of for the elderly to be neglected and left to their own by children who cannot be bothered to discharge their filial responsibilities.

It is therefore in all our interests to take more direct interest in our financial planning. Hopefully, if you have read this far, you are now asking how, no longer why?

A few golden rules

  1. Plan early. Start a pension plan as soon as you start your employment. However, if you already past this stage then remember the wise saying. The best time to plant a tree is 30 years ago. The next best time is today.

  2. Review your health insurance to ensure it covers your specific health needs as a woman. If it doesn’t or if you don’t have insurance, find yourself a suitable policy and switch asap.

  3. Ditto, life insurance: review the sum assured and the protection regularly. Consider insurance schemes that are equity linked so that you enjoy financial upside in addition to hedging risk.

  4. It’s an uncomfortable conversation to have but sit down with your spouse once a year and make sure you both have a shared view of all your household investment assets, bank accounts and liabilities.

  5. Save regularly via instruments like Systematic Investment Plans and review your portfolio periodically to check on your returns. Watch out for funds that charge excessively high management fees. An alternative option might be to invest in index tracker funds. These are funds that hold a portfolio of shares that replicate an actual index (like Nifty 100); this can be done via automated trading i.e. without a dedicated investment manager which means you will get returns in line with the performance of the overall market without having to pay a high management fee.

This is but the tip of the iceberg. If I could leave you with one point, it would be this. Start caring and take ownership of your financial well-being. If you do this, the rest of the pieces will automatically fall in place. And guess what, if more women were to become active, discerning investors, investment products that are today arguably primarily designed by men for men, will start being more genuinely sensitive to women when it comes to their design, marketing, and communication. That is when we will achieve true financial empowerment for women. That is when Durga will not have to worry about dollars. That is a day I very much look forward to.

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