Column: 5 Money Mistakes Women Are Making

January 14, 2022 | 0 Comments

Carla Seely Bermuda October 2018[Written by Carla Seely]

Interesting fact: women control the finances in most households. Statistics show that women make up to 80% of all consumer purchases and also pay more than 60% of the household bills [Nelson 2019]. However, a lot of women have a love-hate relationship with money.

Whether it’s just you or you and a partner, responsibility and accountability for the finances can be overwhelming, especially when you don’t have much experience or don’t have anyone else to turn to for advice.

Here are five mistakes women often make when it comes to money:

1. Having the wrong attitude about money

There’s a classic saying that having money changes everything. Money can affect career decisions, relationship choices and even self-confidence; it can also be a major stressor and even a relationship killer.

It’s important to recognize that many of us deal with money emotionally; some of us may become completely infatuated with it and what it allows us to do and control. So, if you take the emotion out of money and look upon it as a tool to achieve your goals, you can apply logic in your money management and financial decisions instead.

2. Not talking about money

Discussing money matters in a constructive way is especially important for couples; money is often a significant driver for marital arguments. However, a lot of couples are often uncomfortable talking about finances as it often revolves around a sensitive topic: our spending and saving habits. It’s important to recognize that a lot of people have different views about money and that you may have been raised differently to your partner.

Communicating about money isn’t just talking about numbers. Each of us has a different money style and personal views on spending, saving and financial planning. Simply talking about how you feel about money, your past experiences, and your future goals helps to establish healthy communication about money matters.

3. Not creating and sticking to a budget

It’s the basis for all money management, yet many households either don’t have a budget or they have one but are terrible at working within it. While it can seem a bit overwhelming, the time it takes to track income and spending is well worth it to your long-term financial goals.

It’s important to recognize your budget needs to be detailed, otherwise it minimizes the accountability of it. A budget will help you climb out of debt and hopefully stay out of it, it will help you understand where you’re spending your money, and it can also give you a friendly reminder of how well you’re working towards your goals.

4. Letting someone else deal with money issues

In some households, it’s the husband who handles all things related to money including spending levels, allowances, and investing. Regardless of who takes the helm, all parties involved need to know what’s happening to their money and be actively involved in making decisions regarding their finances. It’s essential to have a clear picture of your financial situation as this will allow you to make better decisions and feel more comfortable about your future, financially.

5. Not treating all money the same

Ever heard the phrase “mental accounting”? It refers to how we treat money from different sources differently. Whether it’s your salary, a windfall from an inheritance, or even rental income—it’s all money. However, there’s a tendency to treat it differently depending on its source.

Money that has comes to us with little effort often seems less important and therefore tends to be more easily spent. For example, you’re more likely to spend an extra bonus received from work—or a good portion of it—than if that same amount of money came from working 40 hours a week. Your view on spending is probably entirely different in these two scenarios, but money is money. If you treat all your money the same, you may find you have more of it to go around.

One thing is certain, we have one life and one chance to get it right. Therefore, taking care of number one [i.e., you] and managing your finances properly today will ensure you have a comfortable tomorrow.

- Carla Seely is the Chief Operating Officer at Freisenbruch-Meyer, if you would like any further details please contact cseely@fmgroup.bm or call 441 297 8686

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