Financial inclusion in relationships

It is critical to break down preconceptions when managing finances amongst partners and to cultivate transparency in order to effectively attain family goals.

Personal finance planning should be approached not only through suitable risk-return analysis and asset allocation techniques but also through a process of financial inclusion in which both partners participate in decision-making.

When it comes to ideal scenarios of financial compatibility between spouses, it is easier said than done! It is uncommon for both spouses to be responsible for their day-to-day finances and to take on the responsibility of planning their future as one unit in order to achieve their financial goals.

Most of the time, it appears to be a “ideal” scenario in financial inclusion.

There is no doubt that women have gone a long way in recent years when compared to three or four decades ago. Women have made significant achievements in education, profession, business, and money, and they now find themselves in a much stronger position than ever before. Despite this, women face unique challenges when it comes to handling money and financial management, the most common of which is a lack of financial literacy and confidence in managing their individual and family finances.

Women are traditionally thought to be better at ‘saving’ money than most males, as evidenced in our households and families over the years. However, there is a significant difference between saving and making sound investments that develop in the appropriate and well-regulated instruments.

Saving is a feeling, but investing is an action. And, given the growing variety of investment channels and tools, the world of investing across asset classes based on risk-return profiling is rather complex. This is usually the source of the problem. Traditional housewives typically avoid becoming involved in big picture financial goal planning and execution, which is where one side of the problem emerges. Even today, traditional housewives avoid participating in financial decision-making or goal-setting because they believe the subject is difficult to understand and follow.

Then there’s the married, working woman, who is practically a ‘Super Woman’ since she manages to do a fantastic balancing act between taking care of her family’s needs and handling her professional duties. With so much on her plate, she may prefer to delegate all financial choices to her spouse. Due to an ego struggle between the pair, there are times when the male takes care of the household money. Some men continue to assume that managing household money is their area of competence or prerogative, and that they can do it alone without consulting their women.

The three examples above are typical stereotypes in which the woman takes a back seat in the personal finances of the relationship or family. Let’s pretend the roles are reversed…

There are a variety of situations in which women are the professional and financial leaders of a family while males take a back seat. In other circumstances, the husband’s workplace or career may be stressful or require him to be away from home for extended periods of time. In this position, the woman is responsible for managing the family’s finances on a daily basis.

Another possibility is that the woman is a professional in the field of finance and is naturally more good at this skill set. The husband would then automatically shift the responsibility for financial decisions to the wife, making it a unilateral process. Not only would this place a significant burden on the woman, but it would also instill in her a fear of making the wrong decision, which, if made alone, could jeopardize their financial future.

Financial inclusion also entails sharing financial obligations and working together to achieve their financial goals. Financial inclusion is as simple as establishing openness and honesty in financial affairs to begin this process. In the case of couples, financial inclusion places the onus of financial management on both partners.

To summarize…Having an open discussion about money, creating a joint budget, merging finances, setting future financial goals, determining individual boundaries and independence, being transparent with one another, and, most importantly, streamlining responsibilities could all be ways for couples to instill the habit of financial inclusion.

This will promote equality between the two and allow for successful money management.

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