In our work as Certified Financial Planners™, we have observed there are certain financial missteps that women are particularly apt to make. Take a look and see if any of the mistakes listed below have plagued you. Then be sure to check out our “Mistake Erasers” (in the sidebar on the right) to help you get back on financial track.
You CAN erase all these mistakes. What are you waiting for?
1. We assume we do not know enough about finances.
Women are generally under-confident when it comes to making financial decisions, and as a result fail to take the steps needed to secure their financial futures. We often choose “safe” investments, rather than taking the necessary risks to ensure our money will grow for our longer life expectancies.
2. We let someone else – a spouse, a parent, a partner, an advisor – take care of everything for us.
This mistake is related to the first. If we think we are not good at finance, we may want someone else to do it for us. But finances are like health: you cannot have someone else keep you healthy, physically or financially. You have to be involved. Furthermore, most of us can expect to spend a significant part of our lives on our own, so we will need to be able to stand on our own two feet financially.
3. We put others’ needs ahead of our own.
Our care-taking “hormone” is what makes us great mothers, partners, and friends, but too often, we put our own financial security at risk to help someone we love. Examples include helping a boyfriend pay off debt, lending an irresponsible friend money, spending so much on expensive child care or schools that we cannot save for our own retirements. It’s no different from what you hear on the plane: You must put on your own “oxygen mask” first, so you are in a position to help others.
Everybody makes mistakes.
4. We do not ask for what we need financially.
Unlike their male counterparts, women are less likely to ask for the salary they deserve or flexible hours because they think they will not be liked if they assert themselves. We fail to ask questions about investing or other financial matters because we are afraid to appear stupid. Women need to put people-pleasing behaviors behind them, in order to get what they are worth and what they need to succeed.
5. We do not talk with our family or friends about money.
Women often think money gets in the way of close relationships, and do not talk to their partners or others close to them for fear of pushing them away. But this silence only compounds relationship problems and can lead to nasty surprises later on, such as learning that a spouse has terrible credit, or that a family member has not been properly insured. Start talking now about money issues, and keep talking regularly. Your financial security depends on honest communication with those you love.