Are all women bad with money? No, but there are far more rich men than rich women. Here are the most common money mistakes women make – plus ways to stop being so bad with money!
If you’re a woman who admits to be bad with money, you’ve taken the most important first step. By understanding your money personality, your financial and other plans for the future, the timeframe you have, and your risk tolerance for investment, you’ll achieve your financial goals faster than you thought possible!
Understanding why you’re bad with money will help you develop a plan, and chances are you’re in better shape than you think. Use these tips for taking control of your personal finances to get where you need to go in life.
One of the best ways to stop making money mistakes is reading tips from strong, powerful, wealthy women. Suze Orman’s The Money Class: How to Stand in Your Truth and Create the Future You Deserve is an excellent example!
Why Are Women Bad With Money? 7 Money Mistakes Women Make
“Many of the characteristics that make women uniquely feminine are the very same behaviors that prevent them from becoming financially independent,” writes Lois Frankel in Nice Girls Don’t Get Rich. “In many ways the greatest gifts women bring to society are, ironically, the ones that cause them to act in ways counter to their own best interests.”
Being bad with money isn’t an insult to women, nor is it something to be ashamed of. It’s just that some women make the same money mistakes over and over – and it’s because of their feminine nature.
These reasons some women are bad with money are from financial expert and author, Lois Frankel. Read her book for the full explanations and theories – the link is at the end of the article.
Women don’t separate money from relationships
Many women like to rescue people in different ways – and finances are one way. If someone asks to borrow money, many women lend it freely – to their own detriment. I watch Judge Marilyn Milian almost every day, and it’s almost always women suing men for non-payment of financial loans. A mistake women make with money is letting their relationship affect their financial decisions.
If someone you care about need money, find different want to help him – other than giving or loaning money! Help with resume writing, help with networking, cook dinner, babysit, help with paperwork. If you lend money, always write up a contract. To achieve your financial goals, avoid sacrificing your own future to take care of the needs or wants of others.
Do people ask you for money? Read Loaning Money to Friends or Family Members – Warnings and Tips.
Women don’t negotiate before making big or little purchases
“Women don’t get as much as men because they don’t ask for it, and they don’t ask because negotiations make them nervous,” writes Frankel. Men think of negotiation as fun and exciting; women view it as scary. This doesn’t mean women are “bad” with money; it means they don’t get as much bang for their buck.
What’s your next major purchase or financial transaction? Prepare in advance, whether you’re dealing with a car salesman, a raise at work, or the amount of money you and your husband should spend on your next vacation.
Women don’t get things in writing
Another mistake women make with money is failing to get a contract that stipulates the details of a sale, job offer, divorce settlement, family property division, or service contract. If you’re bad with money, maybe it’s because you don’t treat your purchases or financial transactions in a business-like manner.
Make sure every financial transaction you do is in writing, signed by all parties. Keep your finances organized with file folders for your receipts, contracts, financial agreements, payments, etc.
Women don’t work towards financial independence
“If you’re not accumulating the amount of money you need to be financially independent, ask yourself why,” writes Frankel in Nice Girls Don’t Get Rich. “Are you better at playing the role of ‘nice girl’ than you are at playing the financial game?”
Men are willing to win at all costs. “Playing like a girl” is a money mistake women make. There’s nothing wrong, illegal, or immoral about walking away with a lot of money!
If you’re so bad with money you don’t know what financial independence is, read Can You Support Yourself? 5 Signs of Financial Independence.
Women let social pressure influence their financial decisions
“One of the biggest mistakes I’ve made around money is allowing myself to be bullied into contributing to group gifts at an expense greater than I wanted to spend,” writes Frankel.
Social pressure can cause us to spend more than we have. For instance, buying a $100 gift for a baby shower because you know others will spend that amount of money can lead you to spend 10 times as much as you would have. This can make women bad with money because it influences their financial decisions.
Women don’t choose financial planners carefully – or at all!
Not hiring a financial planner is a money mistake women make. But so is trusting the wrong person with your investments is a money mistake women often make, and it can devastate them financially. Don’t blindly trust anyone – a partner, husband, child, relative, or your best friend’s stock broker – to take care of your investment portfolio. When you’re interviewing potential investment brokers, ask for a free consultation, review their charges, and select someone with a broad base of knowledge.
Women don’t talk to other women who took financial risks and succeeded (and failed, too!)
A money mistake women make is striving to survive – not to be wealthy. Frankel encourages women to visualize being surrounded by money. To stop being bad with money, picture yourself not just paying off your Visa bill, but actually having money left over to invest in yourself, your portfolio, or your kids.
A great article on visualizing wealth is Money and the Law of Attraction – 4 Ways to Attract Wealth.
For more ways to stop making money mistakes from Lois Frankel, read Nice Girls Don’t Get Rich: 75 Avoidable Mistakes Women Make with Money.
What do you think – are women bad with money? What’s the worst money mistake you ever made? Comments welcome below…