3 financial mistakes most women make.

Back in the day….like way back in the day, when I was a budget counselor, I met with many women. Most of them were either divorced or widowed. And, every single one was living below the poverty level. And it broke my heart.

Now I had NO idea how the divorced women were so broke compared to their ex-husbands who seemed to be living a large and abundant life. That is a story for another day.

We met because they needed help. They had NO idea how to make ends meet. NO idea how to budget. NO idea how to say no.

I learned that every woman was motivated to make financial changes. They just had no idea how to begin.

A lack of education was the problem.

After years of gathering information I learned that there are 3 main financial mistakes that women make. Mistakes that will prohibit you from having money now AND when you are older.

What are they? Here you go:

Mistake #1: Believing if you are good with math you are good with money. 

Just because you can add does not mean your spending and savings processes are sound ones. 

For example – Let's say that you have $100 in the bank. So you spend $35 on a manicure, $35 on groceries and $30 on gas for the car. You add it all up and it comes to $100. Good job, right? Well…no. Not really. What happens when you need an oil change, or you child needs to go to the doctor, or your refrigerator needs repaired? Where does that money come from?

Putting it on the credit card is NOT the solution. The solution is planning ahead. Saving for a rainy day. Saving for your retirement (old…er age). Not sure how to do any of that? Check out ALL the Personal Finance Posts that I have….so many for you to choose from.

ACTION: A budget is a physical thing and an action. It is something that you DO. Something that needs thought and a plan. Put a plan in place to make sure you are saving for your emergencies, old age, and everything else that might come your way.

Mistake #2: Living for today only and not thinking about tomorrow.

Most women outlive men. It's a fact. So what happens when your husband dies? How much money will you have saved together?

Here is a fun fact for you that will blow your mind:

Mary is 23 and makes $40,000 a year. She takes 15% of that money ($6000) and invests it. Her average rate of return, meaning the percentage of money she earns, is 7% (stock market average over 100 years is 10%).

Assuming she receives NO raises and invests no more than that….and does this for the next 37 years (she will be 60)….Mary will have OVER $1.1 MILLION in her retirement account! That is a million. She contributed $222,000 and earned over $800,000!!

Or how about this example: Sue is 37. She and her husband earn together $180,000. They take 15% of that money ($27,000) and invest it. Using the same 7% rate…they will have when they are 65…$2.3mm! They invested $756,000 and earned $1.6mm in 28 years. Add 4 years to that – ONLY 4 years…and they have $3.2mm.

Crazy huh! The beauty of compound interest.

ACTION: Set aside money now for your future. Read: Saving For Retirement. Cut back on spending that is not needed (see #3 below). Take out a life insurance policy. Just in case! The more money you save now the more money you will have when you are old like me.

Mistake #3: Believing that retail shopping will cure ‘all that ails' you.

Me? I love a good shopping trip. I love catalogs and internet shopping. You too?

But sometimes shopping is a band-aid on a gushing wound. I hate to break it to you… shopping is not the cure for what ails you. Figuring out the cause of your unhappiness is HUGE here.

If you do have a budget in place and you use shopping as therapy, there is a tendency to create a situation where you overspend.

And sometimes with that overspending you ‘need' to figure out a way to hide it from your husband/partner.

As with everything, honesty is the best policy. Hiding one thing leads to hiding more things. I've seen it happen over and over.

ACTION: Figure out why you are using shopping as therapy. Are you bored? Depressed? Frustrated? Love packages? Once you figure out why, go on and analyze those why's and make changes.

Go on and grab the PDF below. Everything that I just mentioned is here…so you can remember to make changes!

I am cheering you on! I know you can do it. Cause, I was once a victim of ALL 3 of these financial mistakes. I put a plan in place and made changes. BIG TIME changes. If I can do it…you can too!

And, if you are just sick and tired of money being the biggest challenge in your life let me help you fix it all. You can find out more inside Financial Independence Society.

A few more posts for you to read:

• What is the Purpose of a Budget?
• Benefits of Budgeting
• What is an Emergency Fund?
• Teaching Money to Kids.
• 10 Tips to Manage Your Household Budget
• How to Pay Off Credit Card Debt Fast
• ALL Budgets & Money

PIN FOR LATER: 3 FINANCIAL MISTAKES MOST WOMEN MAKE