When it comes to improving finances, saving money and building wealth, there are so many excuses people make as to why they don't do it.
However as women, it is critical for us to get our finances in order. Why? Well, for a variety of reasons, including the fact that we earn less than men, we spend more time out of the workforce to have/raise children, AND we live longer than men so we may need more money over the long term to support ourselves. These are just a few of many reasons. So when it comes to women and money, it's time to get our collective act together.
"There is always some room for improvement when it comes to money."
Whether you have your finances in order, you save a little, or you don't save at all, there is always some room for improvement when it comes to money. The relationship between women and money doesn't have to be a negative one! Below are some major money blunders women make when it comes to their finances. Try to avoid these.
Women and Money Mistake #1: I can't afford to save any money
When it comes to women and money, so many women say that after they've paid their bills, they don't have any money to contribute to their retirement accounts or their emergency fund. Not to mention of other short- or long-term goals. However, some of these same women still somehow find money to get their nails done, go out for drinks and dinner, and so much more! A lot of times, I'll even hear them say things like, "Well, dinner only cost $20, it doesn't make a difference."
Don't think that $20 matters? Think again. Putting away $20 for one year in a savings account with zero interest will give you $1040 dollars at the end of the year. Imagine if you did that for 5 years? You'd have over $5,000. Imagine if you saved more than $20? Add on some interest and even invest some of that money and we're talking about potentially much larger savings. So, the next time you think that $20 won't make a difference, think again.
Women and Money Mistake #2: Not having a plan to get rid of debt
I like to describe debt as a stumbling block on the path to building wealth. And in order to get past it, you need to have a plan to roll (or blast) that block out of your way! It can be very difficult to save money when you are paying back debt and high interest.
However, creating and executing a plan to aggressively attack your debt, especially credit card debt, allows you to pay it off as quickly as you can. Then, you can fully focus on saving more money. And if there's one truth for women and money, you can't build wealth by racking up more debt or by allowing interest payments to sap your income.
Money Mistake #3: I have time, I'll save later
This is one of the biggest misconceptions for women and money. Too many women say they have time, but instead of taking action, they waste so much of the time they have. Days, weeks, months, years go by and no progress is made because they think they still have time.
Time is your greatest asset. But only if you use it the right way by making the most of it. Stop waiting to start. Start now. If you can only pay $100 toward your debt today, pay it anyway. If you can only save $10 a week, save it anyway. Leverage your time, build good habits, and establish the consistency. Wouldn't you rather look back and see progress as opposed to looking back in regret because you wasted so much of your precious time?
Women and Money Mistake #4: I'll figure it out when I get married
I say this time and time again: a man is not a financial plan! And neither is planning to marry rich. Life continues after marriage and this means your expenses and financial obligations don't go away. If you can't work on your finances before you get married, you won't automatically start doing it when you do.
By best advice for women and money is to have a plan for your finances before you get married. And your partner should have a plan for your finances after you get married as well. If you don't plan, you fail, married or not.
Women and Money Mistake #5: Not having a back-up plan
Having a back-up plan basically protects you from unplanned life occurrences that cost money. For women and money to have a positive relationship, they need a back-up plan—a solid one—and this includes a fully funded emergency fund (3 to 6 months of basic living expenses) and the right type of insurance (health, auto, life, disability, home, etc).
Having these things in place will literally save you when life happens, and it does, and keep your financial plan intact. You'll have a plan to fall back on as opposed to having to leverage debt or losing all your savings and investments to cover your situation.
Are you making any of these money mistakes above? It's time to work on getting it corrected ASAP. Already doing all the right things to build wealth? Then it's always a great idea to work on saving even more.