Common Mistakes Women Make In Spending And Handling Money
As the world celebrates Women’s Month this March, many women still forget to address many issues women face when it comes to money, including lower wages, lower life income, and fewer years in the workplace.
If there is little you can do to address these problems, there are so many things you can do instead to make use of your money smarter.
According to financial adviser Nina Mitchell, there are many things women don’t notice they do differently when it comes to their finances. Here are a few common mistakes women make about their money—and what can be done to address them.
Putting finances last
Women, especially mothers, are expected to juggle so many things. There’s taking care of the husband, of the kids, of the household chores, their own work, themselves—and putting financial goals have just lost its place in the list somewhere down the line.
“As women, we make time and take care of the needs of our children, spouse, partner, parents, friends and co-workers at the expense of taking care of ourselves,” Mitchell says. “But, when we put our finances last, we miss out on opportunities to grow our wealth and secure our own financial future.”
That’s why women should set financial goals for themselves, even if they are in a relationship or not. Be conscious about how and where you spend your money and make financial well-being a priority. Seek help from a professional, review your financial goals, evaluate yourself, and make changes wherever necessary.
Being financially unprepared
Being financially literate is a choice and you won’t be able to control your finances and your future without being prepared to do so.
Some of the basic things you should be aware of and be preparing for are the differences between good and bad debts, different types of insurance for your family, benefits from your company and the government, and the importance of setting aside an emergency fund.
Sometimes, you’re suddenly faced with an unexpected life event that you have to shell out money for. Not being prepared for these kinds of events can turn really ugly.
In fact, Mitchell adds, “The current statistics show that 50 percent of marriages end in divorce and the average age of a widow is 55. By age 75, 75 percent of married women are widowed. These are sobering numbers and a major reason that women should be prepared to take care of themselves or their family financially.”
Getting stuck in credit hell
Women are guilty of shopping, sometimes more than we can handle. There’s always the need to upgrade your wardrobe, buy new stuff for your husband or your kids, get a new non-stick pan—there are just so many things to buy! The joint evils of credit cards and online shopping has made shopping even more convenient and victimizing, luring more women into spending on stuff they don’t even need.
A look at credit card data suggests that, “Unlike men, women tend to pay minimum credit card dues for a longer period (paying more interest), use cards more for instant gratification and also do costly balance transfers to other cards when they are unable to deal with a mountain of credit card dues.”
Because of overspending, you might catch yourself paying more interest to financial institutions, and these negatively affect your financial potentials.
Saving instead of investing
Putting money in a savings account generally would accrue you money in the long run. But investing is an entirely different animal altogether and would let you grow your money better, but with some levels of risks.
“Perhaps out of fear or lack of knowledge, women in general tend to be more risk-averse than men. By being too cautious, afraid of the stock market or not investing regularly or early enough, you will miss out on compounding. Compounding is having your money continuously grow based on reinvesting all the earnings,” Mitchell says.
The more time and effort you give your investments, the bigger and richer you’ll see your money grow. If you make every effort to invest regularly and smartly, you’ll be more equipped for your retirement and for future emergency spending.