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Spend Less, Save More

Of late, young and educated women have taken up all types of jobs including police services and armed forces. They have excel in every field. Modern women are quite confident about handling jobs and are earning on par with men, supporting the family in every respect. In certain families, their earnings far exceed the earnings of their spouses.Yet, they do not have the freedom to take major financial decisions.

The Nuclear Family

One among the distinctive feature of the social transformation in recent years has been the creation of nuclear family systems. This system made young women involve more in family affairs. They are involved in planning for savings and investment. However, in certain sections, males dominate women and subject them to exploitation. Quite often the earnings of women are wastefully spent. Contrary to this, in certain families, men fail to meet the requirements of the family. In such families men indulge in bad habits such as drinking, gambling and other undesirable actions and waste money. Women are forced to shoulder the responsibility of running the house. One must appreciate that it is painful for women to earn and manage the house if men are out of track.


Reasonable Income And Surplus Money

In this article, we concentrate on the first category of women who earn reasonable income and have surplus money for savings and investment. In the erstwhile joint family system, young women had all the comforts and security coupled with less responsibility. In today’s nuclear family system women have a greater role to manage the family. When things go well, nobody is bothered about savings and investment. The motto is spending and enjoying life. If the husband is incapacitated, or meets with premature death, that is the time women get alerted and think seriously. In such an eventuality, if the family has planned for proper savings and investments and get the minimum income to support life’s demands, much of the hardships will vanish.


Use Credit Cards Wisely

Spending more than ones earning has never worked for any one. To meet the shortfall, people borrow from money lenders, swipe credit cards and pay very high interest rates. For a middle class family servicing high cost loans will keep them indebted for long. Therefore, one should desist from borrowing particularly for consumption purpose.

 Use credit cards wisely… Desist from borrowing particularly for consumption purpose.

Savings and Investment

There is a need for women to think about saving and investment today. Judicious investment, while meeting the exigencies of life, creates wealth substantially in the long run. Till today, women used to invest their money on gold and silver ornaments, hand loans to friends and relatives, subscribing to chit funds. These are of conventional type guaranteeing normal returns. The aim is to earn super normal returns, while securing the capital. There are enough opportunities to earn extraordinary returns, sometimes doubling and tripling the money in a year. What one has to do is carefully select the investment vehicle.


Planning Investments

How should one plan investments to get super-normal rate of return? By super-normal, I mean, anything more than
twice what banks and companies offer on their fixed deposits. To help women to create financial stability, the following road map is suggested:

First and foremost, reduce unnecessary spending to create surplus. We desire to have luxuries and comforts and are tempted to spend to acquire them. Lead a simple life and meet all the essentials. Occasional heavy spending may be welcome, but it should not be a habit.

Some of the steps are suggested here to get financial stability and lead a happy life.


a) Inculcate the habit of regular saving. You must save at least 25 per cent of your gross earnings. Of the 25 per cent, 15 per cent should be in fixed income schemes like provident fund, bank fixed deposit, debentures, and certificates of deposit.

b) One must sufficiently insure for himself and his family members, (both life insurance and health insurance). About 5 per cent of the earnings should be reserved for this purpose. Sufficient insurance coverage ensures better health for self and family members and supports the family in case of unforeseen eventualities.

c) The balance five per cent should be in risky assets – like shares, mutual funds, chit funds etc.,Quite often, in the long run, this meagre 5% of the gross earnings pave way to accumulate wealth. It gives a kicker to earn substantially.

People who invested in stocks and mutual funds have earned very high returns. An example will clear this. An investor, who invested Rs.10, 000/- in 1992 and bought shares of Infosys company made a sum of rupees one crore by 2011. Calculate the rate of return. Tempted by this do not enter the stock market directly and buy tension. Invest through a mutual fund or portfolio manager. Here, patience is required to reap the benefits.

Stock Market

I am not advocating people to invest in stock market. What I advocate is that modernisation has thrown open the flood-gates to earn money. There are plenty of opportunities to earn good returns on investments. How to plan and earn, depends on the risk appetite of the person. Taking calculated risk and putting just 5% of the gross earnings in risky investments, is worth taking.

Any amount of advice will fall short to change the attitude of a person, as regards spending and saving. However, one should learn the craft to grow wealth for the family and remain peaceful and lead a happy life, now and later. Work towards fulfilling this desire.


Prof N. Channabassappa hailing from Bijapur district is Post Graduate in Economics from Dharwad, Karnataka University. At present he is Principal of Agragami Group of Institutions, Yelahanka. He has a passion for writing on socio- economic issues and has published a number of articles.

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