In an exclusive article for MoneyChat.in, Chitra Iyer, Chief Operations Officer and Financial Coach of financial planning company, My Financial Advisor, writes about the 10 money-mistakes that she has seen women make over and over again.<\/p>\n
The Indian woman is quite possibly among the best money managers in the world. Whether you look at the smallest household in a remote village or an ultra-modern family living in the city, she has always adopted and followed various methods of saving for her family\u2019s needs over generations. From money that is handed to a housewife to manage the household expenses, small portions are cleverly set aside, irrespective of the woman\u2019s knowledge, education or literacy. She is capable of saving money for a contingency or for a need without anyone teaching her the same in a classroom, she just learns it instinctively from her own parents or her financial situation. However, with changing times, despite our cultural reverence for saving, modern Indian women are increasingly prone to financial mistakes. Here are the 10 most common ones; most women would commit a combination of the following mistakes.<\/p>\n
1. Leaving all the planning to the man:<\/strong><\/p>\n In most Indian families, money management is still very male dominated. Either the Can you imagine doing all this yourself if you were alone and there was no one to help you do it? How dumb would you sound if you asked someone \u2013 at a not- so-appropriate point in life \u2013 how do I make a credit card payment, or how do I pay my electricity bill online? Wake up! Even if you don\u2019t need to do this yourself, you need to be aware of how to do daily transactions. Don\u2019t leave this for tomorrow, understanding banking transactions, making payments physically or online, knowing who owes you how much and how much your family owes someone is important.<\/p>\n 2. Not understanding maths:<\/strong><\/p>\n Most women are reluctant to understand or retool their understanding of basic maths. You can handle basic money transactions when it comes to buying vegetables and paying your parlour bills but when you need to pay your home loan EMI or your taxes, you are scared of seeing complicated figures and refuse to go there and understand even though you can.<\/p>\n Why is this? All you need to do is be patient and understand the workings and the calculations. In the Internet era, things are going to get very fast in terms of money transactions and you need to be able to do your math to understand how much you are paying for a product or service, so you are not duped by anyone. Don\u2019t shy away from refreshing your maths skills, or doing your calculations. Slowly, with practice, you will get faster but if you avoid doing this you will only get worse.<\/p>\n 3. Always on the look-out for deals, especially free deals \u2013 decision<\/strong> When you go to buy your vegetables, you check them, bargain and go for the best value for money. Why is it that when someone offers you an \u201cek pe ek\u201d free deal, you lose your sanity and assume this is the best deal by default \u2013 just because it\u2019s an offer? Getting the cheapest is not necessarily the wisest thing to do\u2026you can get conned into very big scams, of buying expensive jewellery, a house, expensive insurance policies or white goods if you get taken in by bargain deals. Focusing on smaller things and not looking at the big picture is not always a smart thing to do.<\/p>\n \u2018Special deals\u2019 are the reason why most women are taken for a ride. For us, everything seems to begin with the price and not with what is the quality of the product. Therefore, men score over us when they can walk into a store and pick the one thing they like the best at the first glance. We ponder, then wonder, and then ponder again. Why should price be the focus when you are clear about what you need? Very often you buy things you don\u2019t need just because there is a deal going on, then you realise later what were you thinking. The salesman or woman knew your weak point about looking out for a bargain and conned you with a hair dryer when you are actually bald!!<\/p>\n 4. Inertia, maintaining status quo \u2013 not taking out time:<\/strong><\/p>\n As an extension to not wanting to do anything with money management, 5. Not enhancing one\u2019s financial knowledge:<\/strong><\/p>\n Usually Indians learn the basics about money from their parents. Today\u2019s younger generation need more training on money since we are in a world that\u2019s way ahead in terms of business, economy and 6. To think you know everything:<\/strong><\/p>\n Today\u2019s women who are well educated i.e. are either CAs or MBAs or are well-placed in good jobs or run their own businesses \u2013 think they know it all. I have come across many women who are unwilling to listen to others and understand what costly mistakes they are making with money, large portions of it belonging to their respective families. They feel they know it all and they don\u2019t need to listen to others who are professionals in the business of managing money to consider their choices.<\/p>\n Professional, seemingly savvy women and the rest who don\u2019t claim to know much, are equally vulnerable to acting on tips, wrong advice from all and sundry \u2013 right from your friendly neighbour to your broker to your insurance agent. This could lead to a huge hole in your pocket. It\u2019s always wise to hire a good professional Certified Financial Planner, pay a fee and get good unbiased advice. No advise comes for free. Remember the advice offered for free is coming from those making money out of you without your being aware about how much you are paying them!<\/p>\n 7. Making an expense budget but not a savings budget:<\/strong><\/p>\n We have been taught how to write down our expenses and keep a watch on the same month to month. The idea being to know if you are over-shooting your expenses in a particular month, when compared to the rest of the year. So you may save some money in a month and you may fall short the next month. 8. Rather spend than save for the future \u2013 live for today:<\/strong><\/p>\n This is a common feature of the younger \u2018moneyed\u2019 generation. Women who earn well are living well for just today and do not care about tomorrow. They would rather have all the latest gizmos, gadgets and consumables than derive value out of their acquisition till it gets a little old. Envying the neighbour and getting the latest before she gets it has become a fad. This only burns a deeper hole in your pocket. It will not help you get that really dear thing you plan for later in life.<\/p>\n 9. Someone else will provide for me \u2013 why be financially independent?<\/strong><\/p>\n To live on one\u2019s own, to provide for one\u2019s needs, is a thing of today. Most women don\u2019t plan at all for tomorrow. They think either their parents or brother or spouse and then their kids would look after them for the rest of their lives. They don\u2019t believe in wanting to contribute to the family corpus that would be needed especially for their old age and health. This is a huge mistake. To follow one\u2019s passion, to do what one really derives happiness and satisfaction from should eventually help you in earning for your needs and dreams of the future.<\/p>\n 10. Not being aware of the need for financial planning:<\/strong><\/p>\n Each and everyone needs to plan for their financial future. You need to list down goals that you wish to achieve in life. For example, I need to buy a car worth Rs. 4 lacs in 2015. Quantify your goals. Write down the year you need it. Then you can start working towards saving for it. Keep on revisiting and revising your goals, tick them when they are done and you will feel a sense of achievement beyond anything since you did it with your money.<\/p>\n Click on these links for previous posts on understanding the need for financial planning, analysing your income and expenses, and creating your household budget.<\/p>\n More about Chitra:<\/strong> Connect with Chitra Iyer!<\/p>\n <\/span><\/span><\/span><\/span><\/p>","protected":false},"excerpt":{"rendered":" In an exclusive article for MoneyChat.in, Chitra Iyer, Chief Operations Officer and Financial Coach of financial planning company, My Financial Advisor, writes about the 10 money-mistakes that she has seen women make over and over again. The Indian woman is quite possibly among the best money managers in the world. 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\nman doesn\u2019t want the woman to know everything, or, where the man is more than willing to teach, the woman is unwilling to learn and understand. Because paying bills, tracking the payments, checking from where money needs to be received and how much, doing online payments, dropping off cheques, depositing cheques\/cash in the bank, withdrawing cash from the bank\/ATM, maintaining records \u2013 all this sounds soooo boring!<\/p>\n
\nmaking starts at the price:<\/strong><\/p>\n
\nstaying put and postponing things that you have to learn to do is a
\nbig issue with women. This will never be on the priority list or it\u2019s always last on the list of things to be done. It doesn\u2019t feel exciting or easy enough to do so you keep pushing it for later and so it never gets done.<\/p>\n
\ncompetition. You need to be aware of various concepts of money to be a smart woman of today. This could be through reading, watching some good TV shows or taking help from a certified financial planner.<\/p>\n
\nThe better way to manage your budget is to decide how much you wish to save from your monthly income. Fix a percentage of the same. Say you get Rs. 10000 per month you decide to save 25% every month. So you save Rs. 2500 and spend only Rs. 7500 per month. You need to figure how much is the percentage you wish to and can comfortably save every month for the future. This automatically curbs additional expenses and also helps you save for emergencies and other specific needs for the future. The best way to do this is through SIPs systematic investment plans where the money gets automatically debited from your bank account at the beginning of the month as soon as you receive it.<\/p>\n
\nChitra Iyer has a range of diverse experiences in the field of finance, with close-to a decade in Financial Planning as the Chief Operations Officer and Financial Coach of My Financial Advisor. She has previously worked as a consultant for Development Credit Bank, and has also been into investment and merchant banking.<\/p>\n