Money management has long been a male-dominated undertaking, but now, a resounding number of women might be putting that stereotype to rest for good — at least when it comes to managing finances in the household.
A paradigm shift in the way how women invest is seen as the a next big step in money management, which began with women becoming a permanent fixture in every aspect of financial decision making. Regardless of age and profession, they can increasingly take full charge of their own financial fate by embracing and adapting the complexities of managing the finances for family.
Money management for the family
Male members in the family lead in taking major financial decisions regarding big-ticket purchases and investing. When combined with statistics,
it shows that 80 per cent of purchases are female-driven. This makes a case for many women being more prepared for smart, substantial spending than for stingy saving.
Much of the responsibility for managing and preserving family wealth clearly rests with women and they tend to view money in the context of their relationships and how their wealth can benefit the ones they love.
Women are the ones who start the education process of money management with children at an early age.
The disparity in terms of financial decisions could lead to families handling their money less effectively.
Here are five reasons why women should step up and assume an equal role in household financial decisions:
Women generally live longer than men
Women are physically active throughout their life in each relationship or professional role that they play and so they generally tend to live longer than men.
So, because a female member is more likely to handle financial decisions alone at some point in life than her life partner, it is best that she stays on top of contributing her finances well and contribute in every decision making for the family.
Social security decisions are a joint exercise
As we talk about the expectancy of life is higher for the females and the overall longevity is increasing due to improved medical facilities, social security is an utmost concern for all the family members.
In singling out the best approach as to when a couple should start receiving benefits, identifying the appropriate cash flows should be taken up as a team strategy.
This may involve initiating benefits at different times. Females are the best to project and control finances in the phase where the income sources are constrained.
Practical side of decision-making
Some traits that lead some men to insist on taking the lead on financial decisions can also lead to excessively risky or stubborn financial habits.
Females can tone down this theory of taking a decision with not so very emotional but practical approach. This plays a catalyst in the entire process of making and managing money.
Understanding expenses is key to saving money
Even though men are more likely to take the lead in major financial decisions, women are more likely to handle day-to-day household budgets.
Knowing what those routine expenses are is essential to achieve financial goals and retirement saving, since it allows for a more informed estimate of how much money you will need than any rule of thumb about replacing a given percentage of income.
The bottom line
As investors, women face unique challenges both in terms of making money and making that money grow for the future.
Despite this, women also have equal access to investing and investment advice. Accumulating adequate resources for longer lives and higher health-care expenses requires substantial savings coupled with reasonably aggressive investing.
Women excel in both saving and investing.
(The author is the founder and chief executive officer of financial portal, 5nance.com)