Women can make many money mistakes. As a woman, I believe it’s so important that we are responsible for our own finances. Being in control of our money will allow us to take better care of our families and ultimately live a better life. It’s important to know what money is coming in, what is going out and to be financially prepared for the future. Money is a powerful tool that will help us achieve goals and dreams.
Nowadays, there are more women who have their own businesses, are the breadwinners in the family and there are more single moms. These are great reasons why women should be on top of their finances.
Let’s look at 11 money mistakes women make and see how we can fix them.
Disclaimer: I am not a financial planner or expert. All information in the post is my opinion and should not be used as financial advice. This is based solely on my experiences. Any action you take based on the recommendations from this blog is at your discretion. This post contains some “affiliate links”. This means if you click on an affiliate link and purchase a product/ service, I may receive a small commission at no extra cost to you. However, I only recommend products, services, and/or business that I personally use, love, and/or believe will add value to my readers.
1. Lack of financial knowledge
A common money mistake is the lack of financial literacy. We all know how to make money and spend it. But we can take it one important step further and learn about saving, budgeting, investing money and planning for retirement. Money is such an important topic and it’s crazy that schools don’t teach it at an early age. So often, many go through life struggling financially.
THE FIX: There is so much FREE information out there. I won’t object you to taking a finance course, but if want to learn something look it up for free!
Google it.
Read a finance book. I highly recommend Ramit Sethi’s book: I Will Teach You to Be Rich
Listen to a podcast (My favourites: Money Girl with Laura D. Adams and Smart Passive Income with Pat Flynn).
Talk to people.
Follow a personal finance blog: 8 Personal Finance Bloggers (who are Moms) you Should Meet
Take a free finance course:
It’s up to you to learn. Also, keep in mind that you don’t have to be a finance expert to manage your money, just start and learn as you go.
2. Thinking that you need to be good at math to be good with money
Some may believe that since they aren’t good at math, then finances isn’t something they can focus on. Money management is not rocket science.
THE FIX: If you can do basic math and use a calculator, you can basically keep track of your money on a piece of paper. Although, I believe using spreadsheets to keep track of finances is the way to go. It’s free, it’s accessible on your phone and customizable. Use simple formulas and functions in a spreadsheet to keep the math to a minimum.
Check out this post: How to Use 4 Basic Spreadsheet Functions to Create a Budget
3. Waiting to make more money
“When I make more money, then I will manage my money.” It doesn’t matter how much money you have, it’s the habit and process of managing your money. It’s even more important for those who are in debt and have less income to be on top of their finances (as there are limited funds). Typically when people get a raise, they end up spending more money. When income changes, then the budget needs to be rebalanced to prevent overspending and to stay on track with financial goals.
THE FIX: Don’t wait. start today!
4. I don’t have time to manage my money
Life can get so busy with family and work. Yes, time is needed to get our finances in order. Once the finances are sorted out, then it just requires a bit of time to update and maintain balance. Investing some time each week to manage your money can ultimately save time. If we manage our money appropriately, we can shave off years that we have to work at our 9-5 job.
THE FIX: There are tips and tools available to help manage your money. Put the time in and let your money work for you! Take a look at the different ways of automating finances to save time in this post: How to Best Automate Your Finances to Save Time and Money
5. Believe that you will live a long time
We believe that we will live a long time and so we can worry about money tomorrow. We may get into the routine of everyday life and we put off planning for the future. Life can be short and we just can’t predict what will happen. What if you or your partner dies tomorrow? Do you have your finances in order that will protect your kids and other family members?
Don’t forget the power of compound interest. Saving and investing money at a younger age will help save up for retirement. Time is so important when it comes to money. Let your money work for you!
THE FIX: Don’t wait, start today!
6. Shopping therapy
When we had a bad day or feeling emotional we may use shopping to get a quick fix to feel better. We may use shopping to ease the “mom guilt” with our kids.
THE FIX: Remember your budget! What are your goals and dreams? Do you really need another purse, those pair of jeans, or even that sweet treat? Incorporate a “fun fund” to prevent overspending on unnecessary things.
7. Letting your partner take care of the finances
It’s common to let hubby (or partner) take care of the finances. It’s so much easier to give this important task to someone else to manage. But I believe it’s in our best interest that as a woman, as a mom, that we must know what’s happening with our money. Even if you aren’t the one paying the bills, you need to know what’s going on. Have a say in the family budget, have a voice on what your money is spent on and know how much should be saved.
Protect yourself and your kids. What happens if your partner leaves tomorrow? Do you know where all of your money is and how to manage it?
THE FIX: Get involved with the finances. Many marriages fail due to money problems; therefore, communication and clarity on family finances are key in keeping a relationship strong.
8. Not having Life Insurance
If you have kids, it’s important to buy term life insurance for both you and your partner. Most families have some form of debt (student loans, consumer debt, car loans, mortgages). If you are or your partner dies, then life insurance will protect your family from outstanding debt.
THE FIX: Term life insurance is generally what is needed. It’s cheaper to apply for it when you are younger. And of course, you should budget for this expense.
9. Not investing
Many grow up with this mentality: go to school, get good grades, graduate and get a good job or career. But then what? Work till we are 65 or older? Unless you have a job that pays you oodles of money, you need another form of income in order to fast track retirement.
THE FIX: Investing to make your money grow while you go to work is a smart plan. Investing when you’re young is the best way to get your money to grow. Invest in real estate, a business, or the stock market. This goes back to point #1 about the lack of financial knowledge. Many are hesitant or scared to invest because they don’t know how to. So I’m going to repeat this: Google it. Read a finance book. Listen to a money podcast. Talk to people. Follow a finance blog. Take an investing course. Make your money work for you.
10. Consumer debt
Thinking that consumer debt is okay a major money mistake that women can make. Racking up debt on credit cards is not okay, especially if when there is no plan to pay it off quickly. Credit cards have such high-interest rates! Putting vacations on credit cards is a mistake if it takes years to pay it off. How about saving up for those large luxurious expenses before purchasing them? Consumer debt can put you back so far and it takes time and effort to climb out of debt.
THE FIX: Determine how much debt there is and make a plan to pay it off asap. Use a budget to help prevent going into further consumer debt.
11. Not having a budget
The final mistake that women make: is not having a budget. Without a budget, we can easily overspend. Ultimately, a budget lays out the foundation of your financial plans and it is your guide for daily spending. A budget helps to organize all expenses and to plan for their future.
THE FIX: Review Budgeting 101 for tips on how to get one done.
If you are making these money mistakes, fix it! It’s up to you to take control of your finances. Protect yourself, your family and your future. Managing money is hard, it’s scary and daunting to understand the finance world. You don’t have to be an expert, but it does take time and effort to learn and get your finances in order. The smartest thing you can do is to start now. Ultimately, money is power and if we use it correctly we can have a more fulfilling life and achieve our dreams.
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Which of these money mistakes are you making? Comment below 🙂
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Awesome tips! I know for a fact a lot of people need to learn about this.
Thank you Gebby! Good money management goes a long way!
I personally think these finance basics should be taught in school at a very young age, instead of other less actionable skills.
These are mistakes that are unfortunately very widespread even among adults..
Thanks for the insights
Yes, I totally agree that basic knowledge should be taught in school!
I can say that in the past I have said I will start saving when I am making more money. That is understandable when you are down to your last bucks and you really can’t save. But if you look at your expenses throughout the month even the week you will see purchases are frivolous. If you can save even five dollars a month that’s a start. Happy Holidays!
Lack of Knowledge basic budgeting, saving and investing are things that greatly hinder people and their finances. I agree that kids should definitely start learning about money management at an early age. That might be just what is needed to help society overcome this culture of spending everything you have and relying on credit.
Very good points! It’s important for everyone to understand how to manage money. The peace of mind alone is reason enough to put in the effort to learn the basic skills. Thanks for a good read.