7 Common Money Mistakes Women Make
After staring at spreadsheets at work all day and balancing corporate budgets, it’s very understandable that at home, a woman might just be too exhausted to crunch more numbers or even balance your checkbook. Often, when we are exhausted, we allow fast and convenient to take over, both of which can lead to over-spending.
But as every woman who has ever wondered, “Where did my money go?” knows, not managing personal finances can end in financial folly.
1. Retail Therapy
Nothing kills a budget faster than impulse buys. You had a crappy morning when one of your biggest clients went to another agency. You leave your office for lunch to take a walk and clear your head. Feeling sorry for yourself, you stroll leisurely past department store windows when you see IT. The perfect, Summer Blue Michael Kors satchel in the Macy’s display summons happy memories of Easter’s gone by, of flowers and candy Peeps and happiness. The healing begins at the first touch of the soft leather and Boom! Your client worries disappear. Out comes the credit card. You’ll worry about paying it off later.
2. Eating Out
According to a U.S. Department of Labor’s 2010 report, Americans spend an average of $2,500 a year eating out. Grabbing Chinese take-out on the way home may seem like the simplest way to fit dinner into your tight evening schedule and is far less exhausting than stopping at the market to buy ingredients and prepare a meal, but it also puts a significant crimp in your budget. If you save or invest even half of that money each year, imagine the significant impact on your ability to travel or to live better in retirement.
3. Not Negotiating Better Pricing
The last thing that any of us wants to do in our already busy day is hang on the telephone line negotiating with the cable company for a better rate, however, that is exactly what you should do. If you aren’t sure where to start, websites like LowerMyBills.com or Eversave.com can help you figure out where you could save money every month. Homeowner’s insurance, renter’s insurance and cellphone bill savings can all add up to extra money in your budget every month.
Automobile insurance rates fluctuate greatly between companies and as you and your vehicle age or where you live changes. Shop for a better rate online or just call your agent to see if there is a less expensive alternative. Even a modest reduction of $25 per month will put an extra $300 in your savings account for emergencies or rainy days.
We love movies, books and even our premium cable channels, but those expenses quickly add up to thousands of dollars each year. According to the National Association of Theatre Owners, the average movie ticket costs $8.38 before essentials like popcorn or candy. Instead of dropping $20 at the theater, find entertainment with Netflix, Crackle or YouTube that cost less or are free. Amazon Prime offers members free or very inexpensive movie options as well.
Avid readers know how books can break the bank too. Hardcover releases at $17 apiece, e-books at a couple dollars here and there… A trip to the public library alone could save as much as $20 per month. Many libraries offer e-books as well that you can check out just as you would any book. Online options like http://www.booksshouldbefree.com and www.openculture.com offer many free options from audiobooks to certification courses. Anyone can pay retail, but sharp women know where to find the deals.
5. Not Keeping Track of Extras
You start your day with coffee in a paper cup from one of the numerous chains with specialty carma-latte-whip-frothed goodness and sometimes grab another as an afternoon pick-me-up. You cave when the girls want to grab drinks after work, again. You purchase snacks at the vending machine or from the newsstand down the block and never consider how many of those purchases you make each month. Cash flows like water out of your wallet for “extras” that you really don’t need. At $5.00 per cup, those lattes add up fast! And while the loose change in your car’s center console may not seem like much when you insert it into that vending machine, bear in mind that some people finance entire vacations with their loose change. Which sounds better, the instant gratification of the chips from the snack machine or the seven-day vacation to Bali?
6. Not Prioritizing Debt
Not all debt is created equal. Prioritizing your debt and paying down higher interest balances first saves you money every month in interest and fees. Take the time to track which loan or credit card has the highest interest rate and calculate your savings if you paid off higher interest versus higher balances first.
7. Assuming Other People’s Financial Burdens
You would never consider assuming another company’s debts, why would you think it makes financial sense to pay off your mother’s, your boyfriend’s or your BFF’s? Have you bailed out your adult children when they had financial struggles? Have you “loaned” money to a friend who came up short? Even highly successful women—perhaps because they are highly successful—can feel obligated to help someone financially because that person would only ask, “if they really need” the help. While it may make you feel better emotionally to assist a friend or relative in need, how will you benefit from doing so? A better option is to help that person to find solutions to their own problem. Can you help your son or daughter to create their own financial plan or budget so they can better track their expenditures? Can you suggest ways for your best friend to earn more income? If you give a man a fish, he eats for a day, but if you teach a man to fish…
It’s easy to have more month than money, even in the 36% tax bracket. Honestly, sometimes the frenetic pace of today’s businesswoman can leave you less than eager to play with numbers afterhours. The benefits of avoiding the seven most common money mistakes that women make far outweigh the time invested. Still not a believer? Start with one area and see how much better your bottom line is in three months. You have nothing to lose.18
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