How homemakers get left behind financially
Posted by: Uma Shashikant on May 08, 2017, 06.30 AM IST
By Uma Shashikant
The protagonist of the story I'll tell you this week does not wish to be named. She insisted that nothing in this column should even remotely be traced back to her.
This turned out to be quite easy, since several other women to whom I posed the same questions provided remarkably similar answers and shared similar life experiences.
There seems to be a segment of 50 plus women, who put on a brave face, but actually live with tremendous regret.
Research shows that regret is quite a common feeling among both men and women over 40. When people realise that the time they have left is getting shorter than the life they have already led, they begin to wonder if they have lived the way they wanted or just played out someone else's life. They start second guessing whether they have missed moments and experiences that matter more than the career goals that they have been pursuing.
But the story is different for women, whose life dramatically alters with the arrival of a child. An accomplished academic record, extreme competitiveness at the graduate level, and a superb start to what looks like an illustrious career, all come to a grinding halt when women fall off the career path after having a child. There are many who struggle through the demands of their home and work; there are some who find support and manage to succeed in accomplishing their career goals; there are some that pursue something that enables them to care for the children, even if it is not their career of choice; and there are some who simply settle for domesticity, without much complaint. It is when the children grow up and leave that they look back at their lives and wish they could have made different choices. The compromises stare them in the face and seem very unfair and unacceptable.
There is a sense of regret about not being financially independent. My friend tells me that her husband's generosity fails to fill up the vacuum of not having her own earnings. She is always guilted by the cost of what she buys and constantly seeks bargains. But her problem is not about spending, it is about the general attitude towards money. Despite the joint holding of assets and pursuing life goals together, my friend does not influence the financial decisions of the family as a whole. She is willing to take more risks with money and is quite an involved equity investor. She also is very adept at managing the paperwork related to investments and finances, since she works with the chartered accountant on the tax returns and annual statements.
However, her husband is quite conservative in his approach and dislikes the stock markets. He is unwilling to risk the hard earned money, and since he is the one who earns, it is his call to make. The risk profiling of the household has been done by their financial planner based on the preferences of her husband. My friend feels constrained and upset that what she knows and believes to be good for the family will not be implemented with the money they save, since she is not financially independent to make those decisions.
The disconnect between the money attitudes of spouses is a very common problem in personal finance. Our upbringing, our childhood experiences, our attitude towards hoarding and giving, and our sense of security about the future, among other things, determine our attitude towards money and our orientation when it comes to making financial decisions. It is very likely that the husband and the wife do not agree on spending, saving and investing. There are no simple ways to resolve these conflicts. It takes several years of negotiation, understanding, experiences, and outcomes before joint decisions are made easily by a household. Women like my friend, who don't contribute to the income of the household are further constrained because they are back footed, or because they are not interested in getting involved in finance and investments.
The confidence among women to make the decisions to spend and save for the household, does not translate into making actual investment decisions. My friend thinks that she should now pursue an interest that will keep her engaged and involved with the outside world, while also helping her develop meaningful relationships outside her home. She finds this to be a difficult, given her limited network of relationships, somewhat outdated skills and tentativeness with technology. Overcoming the barriers of inadequacy that she feels about her capabilities has taken her much longer, but she is working at it.
The fastpaced modern world of work and network can bewilder someone who has been out of work for over 20 years. Without the helpful groups of peers, colleagues and clients, how far could those of us who have been fortunate enough to continue to work go? In personal finance, we emphasise the fundamental linkages between earning, saving, investing and owning assets. When women have given up all the other roles, asset ownership alone does not provide the fulfilment and satisfaction that they seek.
While some have taken up volunteering and socially relevant jobs, there are many like my friend, who are keen to erase dominant sense of regret that they feel about their lives. They want to make a fresh start and find something worthwhile to pursue that provides them with a sense of success and achievement.
I tell my friend about several women who have taken on various entrepreneurial ventures in food, event management, fashion, and the like. She remains worried and tentative, hoping to find mentors who will guide her along. Simplistic ideas like paying the woman who chooses to remain a homemaker do not even scratch the surface of the issues these women face. It is easy to brush it all aside as psychological complexes or insecurities.
Many women do not delve into these issues, seeking happiness within the familiar context of their households. But for those like my friend, the question the potentially capable and competent woman returning to the economic mainstream of earnings and finance, is critical. It is the existential debate about what could have been, and we cannot fault women who want their worth to be measured by the money they earn themselves.
(The author is Chairperson, Centre for Investment Education and Learning.) This article appeared in Economic Times dated May 08, 2017, 06.30 AM IST