Top 5 Mistakes Women Make With Money

Women may control the purse strings in most households, making 80% of all consumer purchases and paying more than 60% of the household bills, but many struggle with a love/hate relationship with money.

In today’s world it’s more important than ever for women to have a healthy relationship with money, know how to deal with it, how to make it grow and how to pass that knowledge along to their children. The first step is to understand what they’re now doing wrong and why.

Letting Someone Else Deal with Money Issues

In some households, it’s the husband who handles all the money issues. In others, money matters are given over to a professional who advises and invests. Whatever the scenario, everyone needs to know what’s happening to their money and be actively involved in making decisions regarding finances. Everyone - men and women - should know how much money comes into the household, how much goes out, and what they have in savings and investments. Having a clear picture of your financial situation will allow you to make better decisions and feel more comfortable about your future.

Not Talking about Money

Why is it so hard to talk about money? It’s a part of everyone’s life and there’s nothing dirty or secretive about it!

Talking about money is especially important for couples. Money, not sex, is the number one reason for marital discord but couples are often uncomfortable talking about finances. For many, it’s a sensitive subject that no one wants to broach.

Communicating about money isn’t just about numbers. Each of us has a different money style and personal views on spending, saving and financial planning. Simply talking about how you feel about money, your past experiences, and your future goals helps to establish healthy communication about money matters.

For parents, it’s critical to talk openly and honestly about money with children. Start early and teach them about earning, spending and saving and they’ll have a head start on a bright financial future.

Not having a Budget

It’s one of the basics when it comes to money management yet many households don’t have a budget. While it can seem a bit overwhelming, the time it takes to track income and spending is well worth it. It can be as detailed or broad as you feel comfortable with but it’s invaluable as a roadmap to your future. A budget helps you stay out of debt, understand what and where you spend your money, and it can help remind you of your goals and make it easier to save.

Not Treating all Money the Same

There’s a term that’s used in behavioral economics called mental accounting. It refers to how we treat money from different sources differently. Whether it’s a windfall from lottery winnings, a tax refund, or money in the bank you’ve worked hard to save – it’s all money – but there’s a tendency to treat it differently. Money that comes to us without much effort is sometimes seen as less important. For example, if you got a bonus at work, would you put it into your savings account or would you spend it?
If you treat all your money the same, you’ll find you have more of it to go around.

Having the Wrong Attitude about Money

There’s a popular saying that money changes everything. Money can affect career decisions, relationship choices and self-esteem. It can be a major stressor and affect health.

Why are we so conflicted in our feelings about money? Because we deal with money in emotional ways. Some people are infatuated with money and allow it rule their lives. Others spend as a way to make themselves feel better. And some are so afraid of not having money that they hoard it and have a difficult time spending it and enjoying it.

Once you take the emotion out of money you can deal with it in a logical, rational way. People with a healthy attitude about money know that it can’t buy happiness but the choices we make regarding money can go a long way toward making our lives better.