Why then do we keep making money mistakes that could come back to bite us one day?
Here are 6 common money mistakes we women make, why they are blunders, and what we can do to fix them.
1. You Leave the Family Finances to Your Husband or Significant Other
It's wonderful to have a companion in life, and it's especially delightful when you discover that he/she is willing to take over the family finances; pay bills, deal with insurance, credit rating, investments, etc. It's all just so darn confusing and complicated, after all.
BIG MISTAKE!
Every year millions of women are forced to take over the family finances due to the illness, injury, death or divorce of their significant other, only to discover that they are thrust into yet another situation that leaves them feeling overwhelmed.
Sadly, they often find that the finances are not in as good a shape as they thought and they don't have an inkling about the amount of money coming in and going out each month.
Be an active and knowledgeable paticipant when it comes to the 'business' of the family finances. Even if you aren't the main money person, sit down with your partner on a regular basis and discuss every facet of your finances.
Life is unpredictable and you never know when you may be called upon to step in and take over.
2. "Budget" is a Dirty Word
That may have been your financial viewpoint when you were in college, but you're a big girl now, and a budget is one of the most important financial tools you will ever use.
If you feel that a budget is limiting, think again.
A budget helps you plan for upcoming expenses so you're not hit with a big bill and no money to pay it. A budget can help you save for a dream trip, a new car, or even that purse you've been eyeing at the department store.
Basically, a budget provides you with a clear picture of what's coming in and what's going out so that you can make educated decisions that will have a great impact upon your future.
You can go low tech with a paper ledger, take a simple approach with an Excel spreadsheet, or go high tech with some fancy software. The choice is yours.
3. What Do Your Credit Reports Say About You?
When was the last time you ordered and reviewed copies of all three credit reports?
This is something you should do once a year, without fail:
- You may find that the credit card account you thought was closed, is still active on your report even though you no longer have or use the card.
- You may see accounts lised that your ex is responsible for, per your divorce, and now they're affecting your credit score.
- You may find that you have been a victim of identity fraud.
- Sometimes it's only a matter of making sure all your personal information is correct: your name is spelled correctly, your Social Security number is listed accurately, etc.
It only takes a few minutes to sit down and write a letter to the credit card company to request that your account be closed, or to report that you have been a victim of identity fraud, and they will be minutes well served. A little financial house cleaning can help improve your credit score, which is like money in the bank.
4. Congratulations! You Just Gave the Government an Interest Free Loan
Do you get a tax refund every year?
If so, you may want to seriously consider changing your W-4 deductions so that you have more money in your paycheck each pay period.
You may say, "I like getting a nice check in April; it's like hitting a lottery jackpot. I don't really see any reason to change things."
If those are your sentiments, consider this. Why would you pay hudreds of dollars each month so that the IRS can send you a check in April, or, why would you give the government an interest free loan?
By recalculating your withholdings, you can put more money in your pocket each payday to use throughtout the year to pay down credit card debt, to add to your savings, to help ease the pinch between paydays, or to help pay for little Sally's braces.
After all, it's your money; make it work for you now.
5. Savings? What Savings?
Your budget should include putting money into your savings account on a regular basis.
Now, before you tell me that you just don't have enough extra money each month to save, here are a few easy ways to begin saving.
A good rule of thumb is to budget 10% of our earning for savings. For example, you bring home $500 each payday. If you use the 10% rule, that's only $50. If that amount is more than you can save at the moment, then go for 5%, which is only $25. Heck, that's cheaper than going to the movie and getting popcorn and a drink.
As you are able, increase the percentage you place in savings.
Another option is to save a set amount, say $100 a month, and again, once you are able, increase the amount.
Save all of the loose change that comes your way. Instead of spending those pennies, nickels, dimes and quarters, put them in a jar. You'll be surprised how quickly they add up.
Think of a savings account as your emergency fund. When the hot water heater goes out unexpectedly, or the dog needs to go to the vet, you have the cash to take care of the situtation and you can forgo the usual weeping and wailing.
Knowing that you have an emergency fund will provide you with a great sense of seurity and peace of mind. I promise that once you start saving and watch your balance grow and grow, you're going to feel so proud of yourself.
You'll also discover that your impulse buying doesn't hold the thrill it used to, and you just might sleep better at night, too.
Remember, having a saving asccount does not replace the need to contribute to your 401K, or having a 401K does not negate the need for a savings acount.
Your saving goal should be to have at least 6 months worth of living expenses in your account; don't let that goal overwhelm you - take baby steps. Saving something every month beats not saving at all.
6. You've Lost Your Financial Identity
Every woman should have a credit card as well as checking and savings accounts, in her name.
Even though your relationship with your sweetie is the stuff movies are made of, a little financial independence is not a bad thing. Building your own credit score is always a wise decision.
According to the FTC, the two main reasons why women don't have credit histories in their own names are, that they lost their credit histories when the married and changed their names and because most creditors reported the joint accounts in the husband's name only. That stinks!
You worked hard for your financial identity. Don't loose it just because you get married. If you never established your own financial identity, it's not to late to start.
Life is a journey of living and learning. If you've made any of these mistakes, don't feel bad, most of us have. We did the best we could with the knowledge we had at the time, now that we know better, we can do better.
ree'J
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Good info!
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