Generation Y women are more independent and in control of their futures than ever before but this doesn’t mean we’re not still getting suckered into silly money mistakes.
Research shows that when it comes to investing, understanding financial language and having enough cash for retirement, women are generally less confident than men.
Be it due to our overstretched schedules or our nurturing natures that tend to see us putting others needs before our own, when it comes to our money there are some common mistakes many of us still make.
So here’s a list of these mistakes along with strategies to turn them around:
Not knowing your net worth
According to Lois Frankel, author of Nice Girls don’t get Rich, for most women the thought of finding out their net worth is as pleasurable as finding out their weight, they just don’t want to know.
Having a rough idea of the value of our home, the mortgage amount and income levels just won’t cut it.
Whether we are in a relationship or not, being in the loop at every stage, knowing exactly where money is coming in and out is crucial.
There are a tonne free financial calculators available online not only to help you work out your net worth but determine how much you’ll need for a comfortable retirement.
A crucial part of their process is showing you the reality of your financial situation and uncovering your spending habits.
Falling to negotiate
Whether we’re in the market for a new car or working at a salary less than we deserve, research shows that women are less likely than men to ask for what they want and to use negotiation as a tool to promote their own ambitions or desires.
This means, we’re missing out on opportunities to both make and save money.
The key is to do your homework and arm yourself with the relevant data to get the best deal.
According to a study conducted by Tahira Hira and Olive Megenda, women really do have fewer sales resistance than men when it comes to impulse purchases.
The best way to avoid impulse spending is to make a shopping list and stick to it. Period. If it’s not on your list you don’t need it.
Frankel also suggests making a habit of sleeping on all purchases that exceed $250 before you buy.
Making emotionally driven purchases
The truth is everyone’s decision-making process when it comes to spending money is driven by emotions.
Buying a knockout dress or some killer heels when we’re not feeling our most fabulous selves is a common story.
There’s nothing wrong with buying nice things as long as we can afford them. It’s how much we allow these emotions to take the wheel that becomes the issue.
Getting in the practice of being aware of our emotional state as well as being accountable to our financial goals is a great way to put the brakes on this type of spending.
Having a budget is the first line of defence against emotionally driven purchases.
The second is including an ‘emergency’ fund in your budget for occasions where things pop up.
According to Frankel, despite the fact that we are becoming increasingly empowered financially, studies are showing that women are still more conservative and less likely to take calculated risks than men.
The fact is every investment involves some level of risk but playing it safe and staying out of the game entirely won’t get you anywhere.
So whether it’s making the decision to start your own business or purchasing shares for the first time, start small and become educated in your area of interest.
Not making your financial well-being a priority
Until life throws us a curveball, such as a divorce, and we are then forced to react to these issues rather than proactively learning and putting strategies in place to protect ourselves.
Making time to create a solid financial future should be as important as making time to move and nourish our bodies.
Frankel suggests scheduling in “get rich’ time as a recurring event to learn about finance and investing and track your spending.
Importantly, put processes in place to protect against unforeseen events such as purchasing income replacement insurance and setting up a will.
Adhering to social pressure
Anytime you spend more money than you think is sensible you have succumbed to social pressure. And let’s face it, today the pressure to have it all seems to fall harder on the ladies than the gents.
Once again, this is where financial budgets and goals come into play. If it doesn’t fit with your wealth creation strategy and it has been allocated for, is it really a purchase you need to make?
Not taking care of the most important asset: You
Research conducted by the Centre for the Study of Aging found the state of an individual’s health played a great role in determining their ability to reach and secure an independent income in their retirement age.
We all have different versions of what makes us our best selves, but as Lorna Jane’s active living philosophy goes, there are three main areas we need to focus on to live our best lives; moving our bodies, nourishing them and believe we have the power to achieve anything!
Whether you can relate to all of the above financial mistakes or you’ve got it all handled, real growth comes from continuous learning. And the key is to keep making improvements, even small ones.