Should you trust a social media influencer with your funds? How do taxes affect women’s incentives to participate in the labour market? In this week’s FYI, The Pioneer’s Shikha Duggal tries to address certain financial issues faced by women with the help of experts from the industry.
Many underlying gender inequities have been exacerbated recently, and a new one emerges: how taxes affect women’s incentives to participate in the labour market! On the other hand, the term “finfluencers” is currently popular among investors because these people offer advice on personal finance investments. So, should you trust a social media influencer with your funds? In this special FYI, we are tackling two finance issues at the same time with the help of some prolific experts from the industry.
Shreya Jaiswal, a chartered accountant, shared, “The “Mahila Samman” savings scheme has been announced in the recent budget, and there are various details where clarity is yet awaited, such as the tax benefits and partial withdrawal clauses. A fixed interest rate of 7.5% is lucrative, but we cannot ignore the rising FD rates. So it is a little early to say whether it is truly beneficial to us or not. We are three daughters in the house, with my father being the only male member.
We cannot expect him to serve the family for as long as he lives. The only alternative would be to get us married so that we could be dependent on our husbands. But dependency, whether on a person or a product, only makes you miserable in the long run. That is also one of the primary reasons for bad marriages, because a woman does not know how to survive without the financial support of a male member. Today, because I make a significant contribution to the house expenses, they call me the man of the house.
I say, “No, I am just a financially independent woman in the house”. As per a case study by Instamojo, there are 15.7 million women-owned enterprises in India, which represent 22% of the total enterprises in India. The numbers clearly show that women simply need to taste financial independence once, after which their success is unstoppable.” As a finance content creator, her audience base is 72% men and just 28% women.
This huge imbalance is her major motivation to keep educating the masses so that more women are drawn to the finance space! Others are recognising the significance of women in macro- and microeconomics. So there is a huge gap in the demand and supply of financially sound and driven women, which increases her value multi-fold. According to the National Centre for Financial Education’s survey, India has a financial literacy rate of just 27%, which is extremely low considering our economic growth as a country.
If an uneducated woman can manage her house and children’s expenses on a meagre income of Rs. 12,000 a month, Shreya feels they are efficient financial managers. They just need to learn to link these skills with the world of investment because, eventually, the fundamentals of finance will remain the same! For beginners, fixed deposits will always be step one of the investment ladder because that gives you a sense of financial security.
As you move upward, you need to sit with your banker and understand the wide array of investment options available, including the government schemes, because they are equally lucrative for the low-income group. Sadly, banks don’t showcase other investments to their customers, and that’s why one needs to watch the informative videos available on social media to at least be aware of the options available.
The last step will always be to have a wealth manager on board because finance is not only a science but also an art that needs to be practised daily, so let the experts handle it. “As a finance content creator, our role is to spread financial awareness and increase financial literacy in India so that the audience can make their own independent decisions.
But the decision to follow a creator and be influenced by the products we promote needs to be an individual one. That’s because, in this world of generalised finance content, people forget that the golden rule of finance is that “finance is personal to all”. What worked for me, won’t work for you. I agree that we have a responsibility while promoting financial products, and one needs to address it legally.
But a business is not based on one factor. The promoters, the investors, the customers, the government, international relations, and economic conditions all have an equal role to play in the stability and growth of a business. We conduct independent research before promoting any schemes or products, but we have no control over these factors or the future economic conditions. Follow an Instagram influencer to learn and be financially aware, but take decisions after personal assessment,” she added.
Another finfluencer Nidhi Nagar, feels the focus of the new scheme is to make investing a habit rather than saving, which women generally do. Women have been saving money their whole lives; that’s what they have been taught. But they need to come out of this mentality because inflation is here, which is going to eat up our whole savings! The emphasis is primarily on tribal and urban women who lack financial stability.
She continued, “India is a country where a person can hold the most regressive views on women and yet be at the highest positions of government and private enterprise. Domestic violence is a sad reality. Dowry harassment still happens. Women have been sacrificing their whole lives. Their aspirations have been stifled, and her dependence on her husband prevents her from trying to escape a home, or better yet, a living hell.
And in most cases, women don’t come out because of a lack of financial support. In many families, the husband is the sole breadwinner! Even for an unmarried woman, financial dependence on parents leads to a narrowing of choices and scope. Many of my female classmates were married even before the completion of our graduation; they didn’t even have a choice, and now for the rest of their lives they are going to be dependent on their husbands. When a woman is financially independent, she becomes a different person, often more confident, and a more vocal member of society.” A woman’s decision to enter the labour force is deeply influenced by her family.
Continuing to work is a daily choice that is rarely made by women alone. Even today, women in India spend up to 352 minutes per day on domestic work, 577% more than men. They are made to believe that it’s their sole responsibility to take care of the house. Regardless of Nidhi’s busy schedule, her mother or grandmother expect her to assist them.
They don’t value her work as much as her brother’s work in the house. There are many times when she has had to put her work down, just because she is expected to do something that doesn’t interest her! “A single parent shouldn’t invest the same way a single woman might. And a woman in her 20s can afford to take risks that a woman in her 40s cannot. If you have just started your career, it’s imperative that you begin investing immediately and consistently.
You should have a mix of both short-term and long-term goals and invest in instruments that help you achieve those goals. Equities might be a good option for you as long as you can take risks. SIP in mutual funds would be a great option for you. If you are in your 40s or 50s, you have children, and you used to consider having an insurance plan or starting a SIP in a mutual fund, women tend to invest in gold. You can invest in gold ETFs; NPS and PPF are great options. It might be a good idea to look at pension plans too.
At this age, you must also diversify your portfolio across different asset classes to minimise risk exposure. And if you are a woman who doesn’t have her own income, you can consider investing in hybrid bank accounts, such as RDs, FDs, and the like. The post office has a monthly recurring deposit scheme that pays an attractive rate of return. As your income increases over the years, your focus should shift more towards securing your own future than that of your family. Investment in less risky products should become the norm,” she added.
Twinkle Jain, a chartered accountant who was also named one of Forbes’ top 100 digital stars for raising financial awareness, contributes. “Growing up in a typical Jain Baniya family, I witnessed women all my life being financially dependent on men. Consider the possibility that an unforeseen event occurs and the person on whom they rely is no longer able to support them. Where will they go? How will they raise their children?
Subconsciously, this leads to unequal treatment. These women were not able to make decisions for themselves, they were not seen equally, there was always a gap. I wanted to change that. Therefore, I started earning when I got out of school, and I have been economically independent since then. I wanted to control my own life. Economic independence has made me independent in many ways, I don’t rely on others for everything now. Economic independence gave me more confidence.
I remember getting life-changing advice from a woman who said, “marry a rich man but don’t leave your job. Leave the man, but don’t leave your job”. Though money may not be the most important thing in life, make sure you are your own breadwinner. Money may not buy other things, but it buys freedom. It’s encouraging to see so many female entrepreneurs taking the lead! But a gap still exists. There are a lot of roles that are considered to be gender specific, “Only men should earn, and women should stick to household chores and babysit their kids.” It is changing, yes, but we aren’t there yet.
When I started working, I heard a lot of “women shouldn’t take a job”. I am still asked why I work so much if I have to get married anyway, and I would not be allowed to work after marriage. Women’s participation in the economic sector is going to enable economies to grow overall and make them more inclusive. It will lead to upskilling, an increase in education, and a smaller gender gap. Women, in my opinion, are better at managing finances than men. My mother has been managing all expenses at my house with a very minimal monthly budget for years.
I personally have learned money management skills from her. As a result, I believe that not only women, but the entire population, require a little more information on this subject. For beginners, I recommend that women invest their extra money in mutual funds because the returns are good and the risk is lower than in the stock market. When I bought gold bonds, my mother asserted, “Will you wear these bonds to a party?”.
I would like to change that thought. I understand a woman’s love for gold. As a result, I would advise them to consider Sovereign Gold Bonds as an alternative to physical gold for investment purposes, as they provide the added benefit of interest and no making charges. Since social media doesn’t have barriers to entry, a lot of misinformation exists too. It’s important for you to filter things out and be more cautious.
Therefore, while an Instagram creator may talk about something, it should be our own duty to Google it too and verify it from other sources before putting our money anywhere. For example, some foreigners have set up numerous fake accounts in my name in order to defraud people.They message people asking for money, enticing them with great returns from crypto and stock market trading. And some people, without researching, fall into the trap and transfer thousands of dollars to them, where they end up losing money.
Instagram influencers should also be more cautious about what they say because they have a large audience that listens to them, and any misinformation can cause significant harm.”
