Housewives do not earn any money for household chores that they do. For many decades now, a male breadwinner has handed over a certain amount of money to his wife to take care of all household expenses. A typical homemaker cuts down on all sorts of unnecessary expenses and saves the money and deposits in a bank. In case of any emergency, she withdraws from the bank. Sometimes, the husband and children would be surprised to notice that the mother has saved a considerable amount over a period of time.
With the pandemic taking away many principal bread earners, many families are facing immense financial distress. It is important for homemakers to step up and start looking at avenues to invest and sustain themselves in difficult times.
Though many women have joined the workforce and things have changed now, there are still 160 million homemakers in India, according to a BBC report, who typically save any amount — be it Rs. 100 or ₹1,000, a month.
According to the World Bank, women account for only 20% of the total labour force in India, in 2019. This data shows that women in large numbers are still struggling financially, and are also dependent on their husbands for all expenses.
Financial tips for housewives
Housewives generally save anywhere between Rs. 100–1,000, a month, and there are many options available for them to invest the same. Financial advisors say though there are Recurring Deposit and Post Office Monthly Income Scheme, among other options, housewives should also consider Mutual Funds for long-term wealth accumulation.
Sujatha Govind, a homemaker says, “After my marriage, I could work only for a couple of years and had to quit after the first kid. Since my husband works in a bank, I am able to save at least Rs. 5,000, a month, and I invest all my savings in a Recurring Deposit account.”
If Sujatha could save ₹5,000 a month, financial advisors say she should invest at least Rs. 1,000 in mutual funds. Starting a Systematic Investment Plan (SIP) will be a good option for her, as it will secure her future too. It’s not necessary to earn money to invest in mutual funds, whatever a housewife saves, she can invest the amount in MFs.
Though it’s a good idea to open a RD account, financial advisors say it is not wise to invest all the money in a RD account, instead she could allocate Rs, 4,000 towards RD, and the rest in a mutual fund scheme.
“Apart from Savings account, Recurring Deposits, FDs, Community and closed-circuit chit funds, Gold chit savings schemes are also more common among the women folk,” says C Sathish Kumar, CEO, Tradewise India.
Vidya Bala, Co-founder, Primeinvestor.in says, if housewives are risk averse, they can stick to regulated products such as bank FD or RD, post office small savings and so on.
“For those who have long-term goals and can take some risk, then mutual funds with proper asset allocation to equity and debt, based on the time frame of goals, will be a better option for them,” she adds.
Mutual Funds through SIPs
Homemaker Sujatha Govind says though she has heard about mutual funds, she is not confident enough to invest in the same, fearing losses.
Sathish Kumar explains that it is necessary to create awareness among housewives about mutual funds. “At present, there is no awareness among them, and women need to overcome the fear of investing in mutual funds. Once they understand various advantages of mutual funds, housewives will be very happy to invest or save through mutual funds because of the ease and liquidity nature. Also, unlike a FD, a partial redemption is available in mutual funds. Thus, in case of emergency, they can withdraw a partial amount anytime,” he says.
Housewives can invest even Rs. 500 or Rs. 1000 in MF schemes. If someone can profile them as regards to the time horizon and risk appetite and the returns associated thereon, MF will definitely lure a larger number of people. If one invests with proper guidance, losing money in MF, but for the market losses, is absolutely next to impossible, he adds.
Vidya Bala says Mutual funds are great investment vehicles for all investors. SIPs — which are disciplined monthly savings- ensure small sums can be invested in mutual funds over a length of time. But knowing which products to use for different time frames is important in MF.
Since word of mouth helps in creating new investors, if a group of housewives can discuss mutual funds and explain the same to other women, a greater number of people will come forward to invest in mutual funds. Also, they need to be very clear about their goals and time horizon. If a housewife starts investing in SIP with just ₹500 at the age of 30, by the time she turns 50, she will be having a considerable amount for her future.
1)Housewives should consider investing in mutual funds through Systematic Investment Plans (SIPs).
2)One can invest in equity schemes, to achieve long-term goals.
3)If housewives are not aware of market conditions and are not familiar with mutual fund investments, instead of investing on their own, they should seek the help of a mutual fund advisor or financial advisor.
Disclaimer: This article is part of the HT Friday Finance series published in association with Aditya Birla Sun Life Mutual Fund.