For Seema Kwatra, a 42-year-old schoolteacher in Delhi, planning her finances as a single mother has been anything but easy. She feels often stumped by unexpected expenses and overspending and, as a result, a lack of savings.
Sheela (name changed on request), who has been a single mother for 10 years, also struggles to keep up with the complexities in policies affecting financial planning. Earlier, she used to ask her colleagues where to invest, how much to save, and so on. Now she takes advice from her 24-year-old son, who is a mass communication graduate.
Single mothers in India find it hard to plan their finances and become financially independent, as a majority have scant understanding of which schemes should they put their money in, the safe avenues, and whether to engage financial analysts.
According to a 2020 UN report, 13 million households are headed by single mothers who live with their children, while another 32 million live with extended families. Globally, it estimated a single mother population of 101.3 million.
A mother must also save up to provide quality education, which is becoming increasingly expensive in India, for her children. According to an ET report last year, the overall expenditure spent on a child at a private school in India from age 3 to 17 is a staggering Rs 30 lakh.
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Since raising a child is regarded as a priceless experience, especially for a mother, the thought of taking charge of her own future and retirement takes a back seat. Kwatra, a mother of two for the last 11 years, admits that she hasn’t thought about her future or retirement yet.
Harinder Kaur, a single mother of twins who has been living with her parents for 23 years, is better prepared. She has invested in instruments like Public Provident Fund, insurance, and mutual funds to plan her retirement years. Kaur says she is self-reliant and keeps track of the markets, but also depends on a friend who advises her and also invests on her behalf.
Many single mothers are hesitant to seek help from a financial planner or advisor, as they often rely on men within the family.
Neha Nagar, founder of tech platform taxationhelp.in, says this is mainly due to “the societal conditioning that has traditionally placed men as the financial decision-makers, leaving women to depend on their male counterparts for such matters”.
Arvind Rao, founder of Arvind Rao and Associates, says, “Women are generally used to somebody else taking decisions on their behalf — either the father or somebody in the extended family.” He adds, “When a situation arises where they are forced to take decisions, we have seen hesitation and a little apprehension. This fear, so to speak, arises because they have never taken these decisions and they don’t feel that confident when they have to decide on their own.”
Single mothers need to seek help from professional advisors, stresses Vishal Dhawan, CEO and founder, Plan Ahead Wealth Advisors. Says Dhawan: “One may not have the skills to understand all the dimensions of financial planning. One of the risks of managing by yourself is that there could be decisions that are taken emotionally or based on partial or incomplete data.”
Dhawan says it is important to keep in mind that the responsibilities of a single mother are both towards her children and herself. “Irrespective of the age groups of children, multiple financial goals are looked at and not just education and marriage.”
He further advises the single mothers to “try not to combine insurance plans with investments, because these tend to be inefficient often. Try to buy term insurance independently, and make the investment strategy independent of that”.
Nagar, on the other hand, says, “It’s important to consider factors such as risk tolerance, investment goals, and liquidity needs while investing. It’s also important to diversify investments to minimise risk and maximise returns.”
Mohua Chinappa, author and podcaster who is a single mother herself, recommends consulting financial experts. She adds, “If you can afford, please hire the services of a professional financial planner. Become obsessed with your financial security and keep checking your money growth with the same fervour you scroll down your social media handles for fashion tips.”
Experts list educating oneself, building a strong support network, and taking charge of finances as ways in which single mothers can empower themselves.
Aniruddha Bose, chief business officer of financial planning firm FinEdge, says that women should aim to educate themselves about important financial concepts so that they are able to make investment decisions with conviction.
Another key factor that can empower women is financial independence, says Piyali Chatterjee, head of customer experience, Hansa Research.
To become financially independent, women can educate themselves on financial matters by reading books, attending seminars, and enrolling in courses. Some of the well-known institutes to gain financial literacy are the National Institute of Securities Markets, the Bombay Stock Exchange Institute, and the National Stock Exchange Academy, says Nagar.