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Talk about money management to most women and you get the eye roll, the head shake and the disparaging half laugh that says—what, me, manage money? I get a variety of responses when I’m introduced as a personal finance writer. I get the self-deprecating confession: Oh, I know nothing about it—I simply don’t have a head for numbers. Or the smart answer: I leave it to the husband—let him make himself useful, na? Anyway I just spend it. Or the I’m-too-cool-to-bother-about-such-things answer: I don’t have the money, my dear, what to talk of its management! It is almost as if women pride themselves with not being able to deal with all things money and play the helpless feminine stereotype of being too brainless to deal with complicated things like money.

But don’t get fooled. Behind this apparent I-know-nothing mask is a savvy saver who has taken the lessons passed on silently from woman to woman in Indian households and put them to good use. Other than the infinitesimal strata of Indian women who are financially independent and have broken free mentally of the patriarchal society, judiciary, government, religion and family, most women (even those who earn) live in homes where the men are the money decision makers. It gets a little worse for women who do not earn and need to ask for personal spending from husbands, brothers, fathers they live with. Even for those with some control over money, the access to financial products is difficult. Women have traditionally found ways to work under all these constraints.

The much-maligned “kitty" party is the place women, especially housewives, go to bond, socialize and also participate in a savings programme. Usually small amounts (not talking of the ladies who lunch with lakhs in the pot) are squirrelled away and when their “chit" is drawn, there is a lump sum at hand. And what do these “non-smart" ladies buy with either the “kitty" or other amounts they manage to save? Gold, silver and precious stones. The Indian woman’s obsession for precious metals and stones is explained away with an indulgent shake of the head by men and also by women, who may have never been in a situation of being dependant on anybody else financially, but this obsession has very real roots of self-preservation. With inheritance rights for women weak and a largely patriarchal judiciary, the only way to have a personal buffer against a divorce or widowhood has been gold and precious stones.

I find that the urban educated woman who has curled a cynical lip at these silly women and their obsession for gold and who may have yet not made the leap to financial independence and security stand at the highest risk in case of a divorce or death of the male partner. They neither have the traditional back-up of gold nor are they in control of their financial lives. Speaking at a leadership summit for women (www.womenofindiasummit.com) last week, I put down a list of must-dos that women should see to that are in place. First, ensure that assets are bought in joint names. Two, ensure that your name is there as the nominee and beneficiary for financial products. Three, make sure you know where the locker key is. Four, make sure you know the location of documents and paperwork that go along with financial and real estate assets. Five, online access points will need a system so that the location of usernames and passwords are accessible to you. Six, make sure there is a will with the details of assets and their location. Remember it is the duty of the person managing the money for a household to do this.

While rights over assets is one part of the journey to be financially secure, the other part has to be with getting increasingly involved with money and its management. Women (and most men too, actually) get intimidated by the enormity of financial choices ahead and the desire to take the absolutely best decision, get the highest return and be the smartest person in the room with money. But real life is about small decisions and tiny first steps. It is not about straightaway buying that super derivative product, but about getting more control of your cash flows. Start very small. Start with having your own system of cash management. I’ve written about this before, but will say it again. Create three bank accounts. One is your “inflow" account. All possible incomes—salary, rent, interest, bonus, gifts—flow into this one account. Call it your income account. By the 5th of each month, this account should have just the minimum balance in it. You will remove the amount you spend each month on living costs into the second account, I call it the “spend it" account. The rest of the money moves into the “invest it" account. You may or may not invest the money right away, but you’ve moved it out of the reach mentally of spending it. You will never have to say again: I don’t know where my money goes. And everytime there is a large inflow—a bonus or a gift—you will be forced to take a decision on how to split it between spending and investing.

Monika Halan works in the area of financial literacy and financial intermediation policy and is a certified financial planner. She is editor Mint Money, and Yale World Fellow 2011 and is on the board of FPSB India. She can be reached at expenseaccount@livemint.com

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