By Priyanka Bhatia,
Navratri celebrates the victory of good over evil, as it depicts power and determination. The festival honors goddesses who conquered adversity, serving as a source of inspiration for women to take charge of their finances. Despite the significant economic roles women hold in India, achieving financial independence remains their primary goal. Financial stability empowers women to make independent decisions and portrays them as confident individuals. With this empowerment in mind, here are nine impactful and innovative strategies to help women in India strengthen their financial independence.
1. A solid understanding of managing finances is a crucial step towards financial empowerment. Unfortunately, only 27% of Indian women know how to handle money. Meanwhile, the percentage of men who are not financially literate is as low as 39%. Financially literate women are better empowered in decisions related to savings, investment, and budgeting requirements. Proper financial planning starts with knowing financial statements, betting chances, and tax preparation.
2. An alternative yet effective investing option that women might consider here is P2P lending: P2P lending involves lending money to individuals and businesses through websites. It allows the users to earn higher interest rates, sometimes more than in a savings account. P2P lending presents huge potential for capitalizing on the natural, intrinsic capacity of women to create and sustain groups. The Indian P2P Lending Federation has claimed to possess 50% annual growth potential in this domain. Women can support entrepreneurs and increase their wealth by lending money to them, which adds another level of financial freedom and economic contribution.
3. Women can invest in equities and mutual funds through various platforms thereby investing small amounts of money. Women will benefit from progressively building up their portfolios with small, sensible contributions spread over periods based on their financial flows. Because of the accessibility that these internet platforms offer, women can now enter the banking industry without having to make significant financial commitments.
4. Tax management is one powerful tool to achieve financial empowerment. Though many women avail of the Section 80C basic deductions, investments in PPF and ELSS being some examples, there are certain tax breaks often missed that could bring a sizable reduction in taxable income. For example, an entrepreneur woman or a woman running some business from home can claim a percentage of living cost electricity, and rent in proportion to business expenditure. Women are also entitled to claim the entire cost of loans taken under Section 80E of the Income Tax Act, in case they have taken loans for training or higher education.
5. One significant source of capital stability is holding property. Many Indian states, like Rajasthan and Haryana, charge lesser stamp duties to women investors in real estate. In some states, women save an extra 2% on the registration of properties than men, and this adds up to become big money. Being named on a property title not only increases financial security but also improves creditworthiness, which makes it easy to secure loans at affordable interest.
6. Though the goal is to avoid debt, using a credit card could be one of the best ways to establish a credit history, especially for women who may have little credit history owing to household duties. In fact, a high credit score makes it easier to get better financial products, such as favorable terms on house loans. Women who use credit cards wisely should concentrate on paying off the entire amount each month and take advantage of cards that provide cash back or points on necessities. Some platforms not only track payments but also offer special deals to timely payers.
7. If women want to invest responsibly and ethically, ESG funds should be their first choice. These Indian funds concentrate on businesses that support social and environmental ideals alongside financial success by prioritizing ethical and sustainable operations. According to Morningstar India, ESG funds have grown assets at an annual rate of 34% over the past two years. Women can accumulate more wealth and contribute to both social and personal development as a result of this form of investment.
8. The Indian government has implemented several programs that are beneficial to women, including the Mahila Samriddhi Yojana, Mudra Loan Scheme, and Sukanya Samriddhi Yojana. The goals of all these initiatives are to encourage financial inclusion, entrepreneurship, and savings. Under the Mudra Loan Scheme, women can access loans of up to ₹10 lakhs with almost no collateral. These programs are also a good source of funding for women, especially those who want to pursue entrepreneurship.
9. A solid financial network is the cornerstone of economic independence for women. Women can access a variety of communities to obtain resources, mentorship, and information. They can share their experiences, learn from other members, and advance together economically. Financial literacy, encompassing empowering networks, opens roads for long-term economic independence and also helps women conquer specific challenges they face: career gaps or limited access to capital.
(The author is Co-Founder of Women on Wealth. Views expressed are personal and do not reflect the official position or policy of the Outlook Media Group or its employees.)
