Money Mistakes Made by Women

Money Mistakes Made by Women


By Rashi Wadhera


Here's something to think about: 90 percent of all women will have sole responsibility for their finances within their lifetime, yet a whopping 79 percent haven't planned for this. Scary stats, huh?
But the truth is, even the smartest girls are making some cardinal sins when it comes to their finances. We spoke to the experts and asked about our financial follies, plus how to fix them! Read on to know tips to get finance-smart...
We stay financially challenged: When it comes to the what, how, and where of money, too many of us are blank. "Whether it's because they don't have the time to learn or they're not interested in financial matters, many women choose to stay foggy about fiscal, says Lois P Frankel, Ph.D., author of Nice Girls Don't Get Rich. "But it is pivotal to become financially literate - it will allow you to be in charge of your own wealth. Read financial planning magazines and newspapers, and have conversations about cash, spending a few minutes each day learning something new."
We have mad money moments: A lot of us splurge on things we 'really, really want', and postpone saving because we think there's time for all that 'serious stuff'. "When you're young, it can be hard to picture yourself as an 82-year-old living on a fixed income, says Frankel. "But it's your responsibility to secure your financial future - and that responsibility begins as soon as you start working. Every month, first pay your bills (rent, loans, etc), then take a fixed portion of what's left over from your paycheck to use as 'mad money', to be spent in any way you want. And make it a habit to save a percentage of every paycheck, advises Frankel. "This is one habit that will literally save you for the rest of your life.
We don't set a financial goal: You've understood the importance of saving and putting away a percentage of your income. The mistake you're making is not knowing what you're saving for! Aimless ambition won't get you anywhere - "You've got to know exactly where you're going if you want to win the money game," says Frankel.
A definitive financial goal like 'I want to own a house in the next five years' gives you financial direction. Plus, to be motivated to save money, you need something to save for. To arrive at a specific value, use this formula: Current savings + amount needed to achieve your vision = your mission. "A clear numerical goal in your mind is something your subconscious can get to work on," says Mark Allen, author of The Millionaire Course.
We assume we're not investment worthy: According to findings by Thomas J Stanley and William D Danko, authors of The Millionaire Next Door, the reason most people start investing late is because they believe that they don't have enough to make a difference. But the truth is, even small amounts can add up to a lot over time. "Commit to a monthly withdrawal from your savings account to a mutual fund, then gradually increase the investment each month," says Frankel. "The positive reinforcement of watching your money grow will become a fix you won't want to live without."
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