Time for women to play a proactive role in managing their family's finances

March 8 will be celebrated as International Women's Day. On this occasion, we've got three highly accomplished women from the corporate world to offer advice to their younger counterparts

Renu Sud Karnad, Managing Director, HDFC Ltd talks about the need for women to participate in one of the most crucial financial decisions that a family takes—homebuying. Radhika Gupta, MD & CEO, Edelweiss AMC, dwells upon the need to save for retirement from an early age, given life’s uncertainties. And Rituparna Chakraborty, co-founder and executive vice president, TeamLease Services, discusses how women whose careers got derailed by the pandemic can get back into the corporate fast lane.

“Women need to take charge of crucial financial decisions like home buying”

Renu Sud Karnad, Managing Director, HDFC Ltd

Today’s woman wears multiple hats. She successfully juggles the pursuit of a demanding professional life, fulfils family commitments, and even does daily household chores. In addition, women need to be financially independent. They should not only earn money but also manage and invest it well to achieve financial security.

Traditionally, men have been the key decision makers in key financial decisions like buying a house. Women, on the other hand, have played the role of homemaker. However, things have changed now. With Indian women being well educated and pursuing excellent career paths, they are becoming crucial decision makers in property buying.

In the housing sector, of which I am a part, the biggest advantage of buying a house is the sense of security, stability and ownership one gets from having one’s own place.

Women should consider taking a home loan as it offers multi-fold benefits such as tax benefits on interest and principal repayment, lower interest rates, benefits offered by the government under the Pradhan Mantri Awas Yojana (PMAY), and so on. Also, data analytics indicates that loan default is lower among women applicants. Thus, a woman’s chances of being approved for a home loan are higher.

To encourage more women to become homeowners, we offer 5 basis points lower interest rates to women borrowers. This provides some savings over the tenure of the loan. More importantly, it ensures that women have a stake in the property as their names are registered on these properties.

Also, HDFC has been the most successful lender under the government of India’s CLSS (credit linked subsidy scheme) scheme – Pradhan Mantri Awas Yojana (PMAY). The scheme gives priority to women for buying homes by giving interest subsidy and making women ownership mandatory in Economically Weaker Section and Low-Income Group category. One can expect a subsidy under this scheme between Rs 2.30 lakh and Rs 2.67 lakh.

“Life is uncertain, participate in your family’s retirement planning”

Radhika Gupta, MD and CEO, Edelweiss Asset Management Company

Typically, it is the men of the house who have taken all the financial decisions, including planning for retirement. But it is important that women participate actively in it as well.

One reason is that women tend to outlive men. Life is uncertain, so both partners need to be involved in decision-making. Women need to have knowledge of how much the retirement corpus is and where it is invested.

Retirement planning is a basic life skill all women need to possess. I believe women have the ability to do so. It is a myth that retirement planning is complicated. Indian women are very good at managing finances. Our mothers and grandmothers have managed household finances very efficiently. It is just a matter of turning the saving habit into investments.

Retirement planning needs to start early—certainly in the 40s, if not earlier. You may not work till 60. It is possible that you will retire earlier. On the one hand, lifespans are rising and people may live into their 80s or 90s. On the other, corporate jobs are becoming so stressful that many people choose not to work till 60. They start working part time once they are in their 50s. They prefer to take up consulting assignments and work for abridged hours. This is possible only if you have saved and invested carefully.

Many women may choose to have a second innings as an entrepreneur. To do this, you need to have some financial assets.  

Budget for your retirement smartly. Maintain two buckets. Your lifestyle needs are only going to go up. Inflation could be higher than anticipated. So, have one savings pool for lifestyle expenses.

You also need to budget for a rise in medical expenses. Buy adequate health insurance. In addition, build a health corpus. That should be your second savings pool.   

“Remote working will open up new opportunities for women”

Rituparna Chakraborty, Co-founder and Executive Vice-President, TeamLease Services

Covid has definitely taken a toll on working women. In the white-collar space, if the man and the woman were both working, there was no domestic help and the kids were at home, it was often the woman who had to leave her job to take care of the house and the children. Many international studies have also shown that the pandemic affected women more than men.

However, Covid has also created opportunities for working women on account of trends like remote working. Many women could not work because they were needed at home while the job required them to be physically present in office. But now, the pandemic has led to greater acceptance of remote working. That will open up more options for women to work from home using digital technologies. A lot of women could also not work due to issues like transportation and safety. These are likely to be less of a constraint in the future.

Also, the gender bias that occurred because of some of the constraints that women face, and due to which they lost out, could get mitigated because of the remote working option.

Women who have lost their jobs during the pandemic should pick up whatever comes their way right now. It is essential that they get back into the workforce. They need to be less choosy. They should consider taking up jobs that are beyond their locations.

Reskilling is obviously important. But the crucial thing in the current situation is to stay flexible. You may have been doing a certain kind of job, but if you have the necessary skill sets, you should be open to doing some other job too. Also, pick up short-term assignments and projects. They will keep you in the game and enhance your employability.