I have a special place in my heart when it comes to women and money. I am a woman who knew nothing about money, and I am a spender at heart. So both women and money are near and dear to me.
I’m on a mission to help women get better with their money. And over time, I’ve noticed 9 money mistakes I see women make frequently. Of course, a lot of women don’t make these mistakes, and I’m sure a lot of men do make them. However, in my limited experience, this is what I see women getting wrong when it comes to money.
If you’re a woman and you are learning about money, check out the 9 mistakes below to see whether you are making any of them. I know I used to be guilty of some – especially numbers 4 and 7!!
1. Letting your husband take care of all the finances
You are making a huge mistake if you let your husband (or any other person) take full responsibility for your finances. Something can happen to your husband (he could die, become injured or disabled, or God-forbid make financial choices out of line with what you would think). There are countless variables that will play in to your future. And you simply cannot predict what will happen in your life. For that reason, you have to take control of your money.
Furthermore, no one will care more about your money than you will. So, you need to take responsibility for it. It doesn’t matter if you don’t like money or personal finance. You still have a duty to manage your own money.
You need to be involved in the finances of your household. Period.
2. Not planning long-term
You are making a big mistake if you fail to plan for your long-term financial future. You are going to want to stop working one day (or may need to stop due to circumstances out of your control), and unless you have money, you won’t be able to retire. The earlier you start saving for retirement the better (because you have time to help your money grow). You need time to achieve your financial goals, and you will never have more time than you have right now. No matter where you are financially, you need to start thinking long-term right now and create a plan for your future.
3. Not negotiating
If you don’t negotiate, you are missing opportunities and losing money. Whether you’re negotiating for a house, a car, a job, higher pay, or a random painting from a street vendor, you should negotiate to get the best deal (and save money).
Negotiating isn’t a skill that most people are born with. Like most things, it takes practice. You can learn how to negotiate and get better at it. This is a life skill that will pay dividends throughout your whole life. It’s too important not to learn.
4. Trying to keep up with the Joneses
If you are trying to keep up with the Joneses, you are setting yourself up for financial failure. When you focus on what your neighbors have, you are comparing yourself to other people, which will always leaving you feeling like you don’t have enough. It’s a deadly trap.
Instead of trying to keep up with a lifestyle that isn’t yours, focus on yourself and where you’ve come and where you want to go. You should compete with yourself – not other people.
5. Surrounding yourself with big spenders
If you surround yourself with people who are big spenders, you are making a big mistake if you can’t afford a similar lifestyle. You’re the average of the five people you spend the most time with (read a full post about that here). If you spend time with people who are big spenders, then you will become a big spender, too. This is just how we work as humans – we’re susceptible to peer pressure and we are very malleable, whether we realize it or not.
Be aware of the company you keep. If you find yourself spending a lot of money around other people who also spend a lot of money, try to find ways to spend time with people who aren’t big spenders.
6. Making financial decisions out of guilt
If you make financial decisions because you “feel bad” or “feel like you have to”, then you are setting yourself for failure if you can’t afford it. You should make decisions about your money based on whether you can afford to do it, not how you feel about it. For example, if you feel like you should contribute to your niece’s college savings because her parents aren’t, but you are in debt yourself, then you make be sacrificing your own financial success because you feel guilty not doing it.
I recommend trying your best to be as objective as possible when it comes to your money. Prioritize your financial goals and learn how to budget and make financial decisions ahead of time, so you aren’t tempted to spend out of guilt if it’s not in your financial plan.
7. Emotional spending
If you spend money to feel better, it’s generally a bad idea. Have you ever heard of “retail therapy”? That’s what I’m talking about here. Shopping to make you feel better in the short-term. It works for me, which is why I have to avoid it at all costs! It doesn’t actually make me feel better long-term, and I typically regret the spending. So, if you are feeling emotional, resist the urge to shop – your wallet will thank you later.
Make your financial decisions when emotions are low to avoid regretting the decision later.
8. Being intimidated by personal finance
It is a mistake if you let yourself be intimidated by personal finance. No one will ever care more about your money than you will, so you need to understand how to manage your money. You can only do that if you don’t let yourself be intimidated by it. No one is born knowing anything about money. Everyone learns about money at some point. It is not too late for you. Start now and dive right in.
9. Thinking that your financial future is out of your own control
If you think your financial future is out of your control, then you are making a huge mistake. Your financial future is 100% in your control. You have to choose to make your financial life better, then learn how to do it, and then implement what you learn. It may not be easy, but it is possible.
A Final Note!
There are 9 money mistakes that I see women making – and it pains me!
- Letting your husband take care of all the finances
- Not planning long-term
- Not negotiating
- Trying to keep up with the Joneses
- Surrounding yourself with big spenders
- Making financial decisions out of guilt
- Emotional spending
- Being intimidated by personal finance
- Thinking that your financial future is out of your own control
Clearly, there are so many women who don’t do any of these and who are leaders in personal finance. We need more women like this and there’s no better place to start than with yourself! For me, I have to be careful not to spend when I’m emotional and remember not to fall into the comparison trap.
Whatever it is for you, fix it – you owe it to yourself to stop making money mistakes and start crushing it. 🙂