Abstract

Decision-making in household finances is a crucial driver of economic resilience and lasting financial well-being. The present study aims to study the role of gender in decision making regarding expenditure and savings in the households in urban and rural households of Hamirpur district (Nadaun and Bhoranj blocks) of Himachal Pradesh, India. The data were recruited with a survey-based research design and collected from 148 respondents (60 males and 88 females) to evaluate the financial decision-making authority, financial literacy, and investment behavior. There are large gender gaps when it comes to financial decision-making: In most households the predominant financial decision-maker is male (65%) and women more commonly engage in joint decision-making (52.3%) or rarely exercise unilateral control over financial decisions. A Chi-Square test (χ² = 88.19, p < 0.001) confirmed the strong association of gender and financial authority. Moreover, an Independent Samples t-Test (t = 2.25, p = 0.025) confirmed that men (Mean = 70) scored significantly higher in terms of financial literacy than women (Mean = 65), supporting difference in financial knowledge. Investment preferences varied as well, with women preferring low-risk investments, including fixed deposits (43.2%) and gold (40.9%) while men favoured high-risk investments like mutual funds (33.3%) and stocks (16.7%). These trends are driven by a lack of financial literacy, risk aversion and socio- cultural factors. The study recommends long-term strategies to bridge gender disparities, including financial literacy programs, employment opportunities, gender-sensitive banking policies and initiatives educating women on investments. Empowering women with economic independence is critical in achieving economic equality and financial inclusion.

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