Rent, travel, and utility bills represented the primary planned expenses and constituted the largest proportion of household cash outflows, at 22% of expenditures, on average. Expenditures on food (17%) were the next largest portion of household cash outflows. Around half of the workers interviewed had remitted money to their relatives. Those remitting were primarily single women, whose remittances to their parents accounted for an average of 25% of their total cash outflow for the month.
The researchers also found that certain expenses were lumpy in nature and could be either planned or unplanned.² For instance, some workers reported that 50-60% of their total household expenses were dedicated to their children’s education in the month prior to the survey. Other workers’ households faced health shocks or participated in family occasions that claimed as much as 35% of their total cash outflow for the month. Households that were able to save at the beginning of the month relied upon these savings heavily during times of resource crunch. However, most of the respondents shared that they typically utilized their incomes as needed and saved any remainder, indicating that savings are mostly unplanned. Thus, many households did not save systematically, and this has implications for meeting their emergency needs and building assets and wealth over time.
Sources of credit
Approximately 40% of all women workers in the sample reported repaying principal, interest, or both for loans taken in the past. Thirteen percent of the respondents borrowed in the month prior to the survey. Some households were so deeply entrenched in debt that 50% of their monthly expenses were dedicated to equated monthly installments or interest payments.
Single women reported relying upon friends or colleagues for financial support during emergencies, while married women relied upon their family or neighbours, moneylenders, and pawnbrokers. Some women in the sample reported that they had no role whatsoever in financial decision-making, and their spouses or parents were responsible for arranging money in times of need. Given these demand-side constraints, reducing the supply-side constraints only through access to financial products may have a limited impact on certain women.
The resource mapping exercise prompted women to intentionally consider nuanced aspects of the timing and magnitude of incomes and expenses, as well as consumption smoothing patterns. Thus, this approach can help researchers fine-tune quantitative survey instruments to effectively capture aspects of women’s financial well-being, resilience, and budgeting patterns. We intend to apply the learnings from this experiment to design financial instruments that can help workers meet their financial goals, like easing their liquidity constraints through a zero-cost flexi-salary option and enhancing micro-savings.