Know Your Money: The Importance Of Being Financially Educated

One day, my help came crying to me: Her husband had wiped out her entire savings and left. My first question to her was, how she could be so silly to hand over all her money to him. Her reply was simple: She had trusted him. But you should have been cautious with your money, I argued, this was plain stupidity. The poor girl didn’t know what to say.

A few months later, I heard from a friend whose husband did something similar. Due to heavy debt in business, he took all the money from their joint account and their investments and liquidated it all without informing her. He didn’t recover his damages and also lost all of my friend’s hard-earned money. She did not have any separate holdings of her own and relied on her husband to manage her income.

She was from an upper middle-class background, educated and doing well in her job. How different was her situation from my help’s? In my arrogance, I believed that it was the latter’s economic strata and lack of education that made her trust her husband with all her funds.

Both these events got me thinking about the attitude women have towards taking control of their finances. I asked friends and family and realised that while most enjoyed making money and loved spending, they didn’t like managing it much. Given an option, many didn't bother to keep track of their finances.

Believing that with family and career responsibilities, managing money wasn’t on top of the priority list, the monthly cheques handed over to the partner or father and that was it.

The rest wasn’t their headache. No checking of yearly tax returns, bills, investments and other multiple financial details. While some dabbled a bit in savings and investments, they didn’t take complete charge.

Anyone may have to go through what my help (and my friend) did. Your partner may not cheat you; but what if something untoward happened and you are left to manage the monetary situation? Isn’t it better to be in charge now?

While it’s acceptable if the partner handles the money, it is your responsibility to see how it is being used. Question them if required; you have the right to know the details of your finance.

It seems like a colossal task to begin with, but the more you take control of your money, the better you get at it. Women administer the family expenses; keep budgets and stick to them. We manage finances in our daily lives effortlessly; so why not our own?

The future is uncertain; if we learn to oversee our funds correctly, we will be better prepared for financial emergencies.

A few tips to manage resources intelligently -

While dividing your investments, look at short term easy liquidity and long-term security options.

To begin with, invest smaller sums, so if you make a mistake, it won’t be a heavy loss. Also don’t allow initial mistakes to bring you down. Learn from it and make better decisions.

Make contingency plans; see to it that money needed for unforeseen emergencies is available easily.

Look at retirement income options in earnest.

Women get many financial benefits in our country; make the best use of them, take advantage of what’s on offer. Moreover, be aware that some loans are available at lesser rates for women. Make sure you don’t sign anything without knowing what would be the liability to you in case of default.

Inquire about different interest rates on similar investments; take time to study them and pick one whose payment terms and returns suit you best. If need be, ask your financial advisor repeatedly, till you thoroughly understand what’s on offer; but don’t make your decisions on the instruction of one person. Sometimes, advisors may sell you something for their benefit more than yours; educate yourself and then invest.

Keep track of important deadlines like dates for filing taxes or paying investment premiums etc.

“If money management isn’t something you enjoy, consider my perspective. I look at managing money as if it were a part-time job. The time you spend monitoring your finances will pay off. I’d challenge you to find a part-time job where you could potentially earn as much money for just an hour or two of your time,” said Laura D Adams, personal finance expert.

It is important for women to not just be financially independent but to have sound financial knowledge. We live in volatile times; while we may not be able to control our circumstances, being financially educated can make tough times easier.

Happy managing to you!

image source