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“Women’s financial freedom is the sign of social freedom”
Recently when I read some research on gender gap and financial literacy, it shows an alarming information, that women display lower financial literacy and confidence than men, this have leaving them at a potential risk. In my opinion, the real women empowerment can be achieved only by raising their financial literacy. Most of the time women are more likely to leave financial planning to their spouses.
Since women face different type of financial challenges, they need higher financial literacy to construct better future. In general, women have longer life expectancy, lower lifetime income and career interval due to child bring up. Nothing is certain in life, women may spend at least part of their life as widow, divorcee or single women, so they should prepare themselves with higher financial literacy, rather than solely relying on spouses to handle their finances.
I grew up seeing both my parents was in the workforce since I born, although my mother had only limited formal education, till primary education, she was in the workforce for almost three decades. As I grew up in typical Indian family culture, whereby the father is the leader of the family and he manages the finances of the house, till the end of her retirement day, my mother will give her salary to my father, my father will give money for her expenses. But, since young I realised actually my mother had better financial management skill rather than my father. Sometimes I feel amazed with my mother, with limited formal education the financial strength she have today is really an eye opener. My father is a generous person, although my father contributes almost 80% of the household income, but he spends almost all his income. On the other hand, my mother will try to save almost 50% of the money which my father provides for her expenses. My father passed away three years ago, my mother, with limited formal education, resources and income, today she is financially free and not dependent on any active income. I always think, my mother should manage the family finances since day one, rather than giving it solely to my father.
Women empowerment defined as the action of raising the status of women through education, awareness, literacy, and training. Women’s empowerment is all about equipping and allowing women to make life determining decisions through the different problems in society. The question is will women have higher financial literacy if they achieve empowerment? This will be very subjective discussion, many women today still depend on their spouse to manage the household finances, although they are an empowered individual in the workforce and society. Women empowerment will be incomplete without good financial literacy among women’s. Financial literacy is an important element in their life whether they are house wife, working women, single women, less educated or poor. Below are some active role a women can play in household finances:
Start small conversation and stay involved
Home finance discussion do not have to be long. It can be as short as five to 10 minutes. Expressed your idea, belief and explain to your spouse, no one is wrong in giving opinion. The natural character of the husband will try to lead and women will take a backseat and let the spouse to take care everything, this has to come to an end. The communication on home finances likely will not happen overnight, if discussion gets bitter, don’t give up, take a time out. It will not happen all in one conversation. However, both sides of the couple should know what is happening at all times. That does not necessarily mean you have to do everything together when it comes to finances. But be sure to schedule a monthly review so that you both can assess where you are. Believe me “men are not better and are as bad or as good as you in managing money”. Women also need to know the cost to run the family expenses, what are the present savings and investment, how much is the household debt and what type of insurance policies both of you have. Trust me, you will feel more confident, no matter what happens.
Develop reading and learning attitude on personal finance
Reading personal finance book will improve your financial literacy level. By, reading you will learn new knowledge, the more you read, the more you know about cash flow management, budgeting, investments, risk management and financial behaviour. Reading books will increase your knowledge on finance, with better knowledge, you can discuss better, manage better or better you can lead the household finance. Also, the perspective your spouse have on you will differ and start listening to you. Indirectly you are increasing your financial literacy.
Communicate your long term plan and priorities
Sometimes you want to go to Langkawi for a holiday and your spouse wants to go to Europe. Sometimes you want to have baby while your spouse don’t want. Most of the time life partners have different plan for the future that is normal. You must communicate your long term plan and priorities. When your spouse are in the midst of looking to buy a new house, but you know children education is the priority and you don’t want to jeopardise your children education because of the new house, communicate the priorities as rationale as possible. Listen to each other and maintain open discussion. Once both of you have clear financial goals, the next step is working towards the common goal.
Start your own savings and investments
You can open an individual saving account, retirement plan, investment account and set up an emergency fund for yourself. This will boost your confidence level on money management. If possible engage a financial planner or financial advisor, this to ensure you are moving towards in correct direction.
The real women empowerment can only come true when closing the gap on financial literacy between man and women. Man or women, it is on us to change the perspective, we both man and women need to champion for one another for true equality, inclusion and empowerment. Happy Women’s Day!
Gunaseelan Kannan, CFPCERT TM, a Financial Adviser Representative by Bank Negara Malaysia and a Licensed Financial Planner by Securities Commission (CMSRL/B4198/2013), is currently pursuing his Doctorate research on entrepreneurship, financial planning and financial technology. He also lectures on accounting, finance and business fields in Asia Pacific University of Technology and Innovation (APU). He is the Winner of Malaysian Financial Planner of the Year 2020, from Financial Planning Association of Malaysia.
*The views expressed are those of the author. If you have any questions about the content, copyright or other issues of the work, please contact Newswav.