When it comes to money, why are women always underdogs? We’ve all heard the stats—that women make 76 cents for every dollar a man makes and that 41% of elderly women are living close to the poverty line.* They clearly show inequality, but does inequality always mean unfair? Are we being forced to play underdogs (or victims) or are we doing it to ourselves?
Not being a fan of victimhood, I thought I’d take a look into what we do, or don’t do, that leaves us on the sidelines of wealth. Here are the top money mistakes women tend to make—see if you’re guilty of any.
Money Mistake # 1: Not having “f@#k you” money.
I hate my job, but I just can’t afford to quit right now. It’s ridiculous how much we say and hear this. Instead of throwing a pity party, “Always have ‘FU’ money,” says Dr. Lois Frankel, author of Nice Girls Don't Get Rich . “How can you leave an awful job, an abusive marriage or some other bad situation if you have no money?” Save that emergency cash cushion and aim for three to six months of living expenses in the bank. You’ll also protect yourself and the financial world you’ve built so that no situation takes it all away from you, adds money coach and author of Make Money, Not Excuses Jean Chatzky. “There are not too many sure things in life, but saving is a sure thing and protecting yourself is a sure thing.”
Money Mistake #2: Typecasting ourselves.
A nationwide survey presented by Money magazine showed that husbands and wives divvy up money-related tasks along very traditional lines, with men doing most of the big-picture, long-term planning and women managing the day-to-day budgeting and spending. There are two disturbing points about this observation, going back to a relentless stereotype: men provide while women make what they provide pretty. As we take on the role of spender and internalize the daily “you need to buy this to look good” messages, we fall prey to blowing our budgets and accumulating debt to maintain that pretty exterior. Women, especially ages 18 to 34, are the most targeted consumer group because advertising and marketing gurus know that just about every financial choice in a woman's life can be, and often is, ridden with emotional baggage that has nothing to do with money. (Does “retail therapy” ring a bell?)
You also can’t afford to only think short term. If anything, we should be thinking “big picture” more than men because we live longer. Knowing this, Chatzky says to set your everyday spending in your budget to 25% and stay adamant about the 10% savings, which should include your IRA and/or 401(k) contributions. Missing out on these opportunities from an early age only means you're going to have to work longer or save more as you get older.
Money Mistake # 3: The need to know all the right answers.
“Women like to know they have the right answers before they proceed in just about any situation,” says Chatzky. “In most situations that works really well for us, but in the world of investing, it’s pretty impossible to know you have the right answer.” If you really want to be wealthy, put your money to work for you as much as you’re working for yourself—that’s what investing is all about. Unfortunately, women become so overwhelmed with the idea of being the best investor, we don’t even get in the game. You have to accept that you are not going to win every time in investing and focus on being a consistent investor, insists Chatzky. Study the market trends just like you do fashion trends and stay in the game. If you don’t, you’ll guarantee not winning at all.
Money Mistake #4: Holding on to the idea of fairy tale endings.
Women are given mixed messages about money, Dr. Frankel explains. We are told to save and plan for the future, but always in conjunction with someone else that will ultimately “take care of you.” As our friends at Wife.org would say, “A man is not a financial plan.” Don’t wait for Prince Charming to carry you over the threshold. The desire of financial success must be accompanied by hard work or else you’ll be stuck waiting. And who likes to wait, especially when it comes to money?
Ladies, if we don’t like getting patronized and treated like little girls, we need to act like the adults we are when it comes to finances. We can weigh in outside influences, emotional baggage and fears behind our money mistakes, but it’s ultimately our responsibility to actively clean up our messes and create our successes in life and in money.
This article was originally published on www.savvymiss.com, a free website community dedicated to connecting, empowering and informing women everywhere. SavvyMiss.com features articles on dating, love, careers, fashion, health, beauty and important societal issues. Members also use message boards and blogs to build relationships with other members.
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