TomorrowMakers

Women’s Day offers us an opportunity to take some time to acknowledge and appreciate how far women have come – especially in financial matters.

The changing investing habits of a millennial woman

Till a few decades ago, a woman’s primary role was that of homemaker and caregiver. The idea of women having a job, or even getting an education, was alien to most. Naturally, an independent income was out of the question. These women were completely dependent all their lives – first on their fathers and then on their husbands. 

In the past, investing and all other money matters were considered to be the domain of men. Women were expected to be satisfied discussing household tips and tricks. But now it’s 2020 and women – especially millennial women – are well-educated, hard-working professionals who are breaking glass ceilings and taking control over their money and their lives. 

The reason women can do what they are doing today is because, over the last century, women across the world have been fighting for their rights. To recognise this, 8th March every year is celebrated as International Women’s Day. 

The best way young women can acknowledge the sacrifices made by women in the past is by being 100% financially independent and building a life for themselves where they are self-reliant, confident, and capable of taking care of those close to them. The good news is that they are already working towards this. If you’re reading this, chances are you’re one of them! 

Here are some ways in which the millennial woman’s money and investing habits are changing:

1. They have basic investment knowledge

While young women may not know all the investment jargon and technicalities, they know the two things that matter the most: first, the need for investing; and second, the basics of investing. Research shows that 70% of women in urban India have a basic understanding of investing and investment options1. That number is a huge win! 

2. They use technology to their advantage 

Millennials are the lucky generation who got to see the changes wrought by modern technology, and millennial women are ensuring that they use this to their advantage. Whether it is increasing their financial literacy by researching online or installing (and using) mobile applications of financial advisory firms on their smartphones, millennial women are more engaged than ever in managing their investment portfolios. 

Related: 5 Women-specific financial products you must take advantage of today

3. They follow the FIRE movement 

Financial Independence, Retire Early (FIRE) is a lifestyle movement that’s extremely popular with millennial women. Its purpose is to maximise savings, by either increasing income or decreasing expenses (or both), so that one can retire early and continue to be financially independent. Research shows that about 70% of women save 10–20% of their income2. While the FIRE movement requires this number to be higher, it is definitely a great start.

4. They invest in different forms of gold

Traditionally, women thought of only one thing when they thought of gold – jewellery! That too was for the purpose of fashion and status and not as an investment. Now, however, millennial women see gold as an investment and go beyond physical gold. Gold ETFs and digital gold are becoming increasingly popular with today’s young women, who are more interested in investing for their future than in flaunting jewellery. 

Related: Gold ETFs vs Physical Gold: Which one is better?

5. They follow goal-based investing

Millennial women are focused and know what the    y want from life. Whether it is funding their own wedding and not burdening their parents, or travelling solo around the world, they have solid goals and are working towards saving up for them. Goal-based investing is popular among millennial women – since they have their priorities set and a number and a time frame to achieve them, they can financially plan and pick their investment options prudently. A study reveals that about 66% of women in the country invest for a period of 6–10 years, to facilitate and fund their life goals3.

6. They take insurance decisions

Women today think long-term about their financial security, as well as that of their family. Hence, insurance decisions and purchases are no longer dominated by men. Whether it’s ensuring that their elderly parents have a comprehensive health insurance cover and get annual health check-ups, or securing a critical illness cover that includes female-specific cancers, millennial women today are taking important and financially prudent decisions. 

Related: 5 important reasons why women need life insurance

7. They prefer mutual funds and SIPs

Mutual funds are more popular with millennials than ever before. A study shows that in 2018-2019, 47% of new mutual fund investors were millennials. Out of this, 24% were women . Systematic Investment Plans (SIPs) are more popular with millennial women than investing lump sum amounts in mutual funds. This further shows the commitment of young women today to save consistently and work towards their long-term goals. 

Related: Savvy millennials betting big on Mutual Funds

Last words

If you can relate to the above investing trends associated with millennial women, give yourself a pat on the back! If not, seek inspiration from them – and on this International Women’s Day, make a commitment to your financial future and independence, and begin investing. Where and how do millennials invest? Read this to understand. 
 

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