"When I was young I thought that money was the most important thing in life; now that I am old I know that it is."
Money is important to all of us, and yet sometimes we are pretty ignorant about it. We all know that the economy is still in its struggling phase, and the uncertainty of employment is something that hangs on everyone's head like a dangling sword.
Nothing against the fairer sex here, even men make financial blunders, here we've tried to take a look at the common money mistakes women make. Often, women let emotions take charge while spending money. It isn't wrong to help a friend in need or pay your boyfriend's bills but just because you have the financial resources, doesn't mean that you should spend.
Financial Mistakes Women Make
Be nice with your neighbors and loved ones, but being overly helpful in lending money to them is a bad habit. Avoid fixing everyone else's financial mistakes. In today's times, no one can afford it.
This means you should try to avoid buying a new house for your kids, paying the entire wedding bill for your daughter/son, or paying the college fees for your grandchildren if you do not have enough money for your retirement. It might be difficult to say no, but helping out others by sacrificing your own needs isn't healthy.
However, if you can't resist the temptation to buy designer stuff, wait for the sale season. You don't have to spend a ridiculous amount of money on shopping, and you don't even have to compromise on your guilty pleasures.
Refrain from Talking on Financial Matters
This is one mistake that women make more than men. From the very beginning, society has kept women away from money matters; hence, most women have been trained not to ask questions related to finances, and leave everything to the men. This isn't right.
As a woman, you should be well-informed about money matters of the house. This gets essential especially when you are married. The more you understand money management, the easier it becomes to cut down on unnecessary purchases.
Failing to Pay Credit Card Bills
At present, Americans owe more than USD 853.6 billion in credit card debt. The average American carries a credit card balance of more than USD 8,000, but ends up paying almost USD 1,000 every year as interest.
Most consumers prefer paying the minimum amount of their credit card bills, and therefore, it takes them years to pay off the actual bill. To solve this financial crisis, limit the number of credit cards to just one or two. If you want to pay via the card, use the one that has the lowest interest rate, and try to clear the bill by paying the full amount.
Letting Someone Else Handle Your Money Matters
Women are known to be more trusting, and hence, readily give up their financial responsibilities to someone they know and trust. The numbers and financial plans might look confusing, but this is no reason to step back and let someone else handle your finances.
Learn to take charge; this is your money, and you should know how to manage it. Hiring a financial adviser is good only if your hectic job doesn't give you time, but even then you should be well aware of your finances.
Using the 401(k) Pretty Early
According to a study conducted by Hewitt Associates, after changing their jobs, most Americans tend to withdraw their 401(k) money, rather than transferring it into another retirement account. This behavior is particularly noticed in women, as they are most likely to resign or take a break once they have children.
They tend to forget that 401(k) money is retirement money, and hence, shouldn't be spend anywhere else. Almost 20% of the American workforce cash out their 401(k) money when they change jobs. Be smart, and rather than spending this money, reinvest or transfer it into another retirement account.
Understanding Property Rights
Changing the title of assets into joint names is a good idea for a couple to save tax, but if they ever decide to separate, it can surely cause some chaos.
For example, if you owned an apartment before marriage, then there is no reason to make your partner the co-owner of that property. The same goes for all the other investments and assets. Most women are clueless about their property rights, and hence, end up making decisions they regret in the future.
Another common mistake which women often make is called 'Retail Therapy'. Well, it is common knowledge that women love shopping, but unnecessary shopping even when you can't afford it is wrong, and creates a huge financial mess for the future.