The best part about running Saij Elle is spending time with women (and sometimes men) of various backgrounds talking about all things money. There’s no amount of research on “How women view money” that can replace the insight I’ve gathered by speaking to several hundred women over the years.
In creating a safe environment, I’ve learned from them the things about finance they want to know, their regrets and what they wish they had known and what their biggest fears are.
If there are two recurring themes that comes up, it’s these:
- Women too often underestimate their financial ability, and too often overestimate the capability of others, including their partners.
- They too often underestimate the financial risk they face.
That’s why I’m compelled to write about this, with the hope that for those of you reading this, you’re empowered to build confidence, the skills and the know-how to take financial control of your life.
Here are the five biggest mistakes women make when it comes to their finances.
Mistake #1: Not Asking for Help
I truly believe that the greatest obstacle to financial security is not the lack of knowledge – it’s shame. So many women tell me they are embarrassed they don’t have more control over their financial situation.
There are a few reasons for this: 1) The financial world has made it so unnecessarily complicated that most feel they need to invest a lot of time to get financially fit. 2) Most women are juggling family obligations, work and personal time and can’t see where they’d even make time to manage their money, and 3) Many women I know (myself included) suffer from the “perfectionist” complex. That is, they feel if they can’t learn everything there is to know about their finances (and get it right) they won’t bother doing anything.
So I will say this.
It doesn’t take a lot of time to be on top of one’s finances. I show women a method on how to get started, what’s necessary to know and how to build “learning” blocks over time. They are always pleasantly surprised at how painless it can actually be!
Second, there are professionals and financial wellness advocates whose career it is to know this stuff so they can help you. Ask for help. Speak up when you don’t understand a financial concept. Remember that we were not taught this in school so you’re not expected to know it all. And it’s the industry’s job – it’s their responsibility to ensure you walk away knowledgeable.
Mistake #2: Thinking Their Partner is Better at Finances
If I had a dollar for every time a woman tells me she lets her husband or partner handle the family finances because he’s better at it. (Face)
There are countless of studies done globally that provide insight into one’s financial skills. And while almost all of them show that men rank higher than women in this area, the ugly truth is that men on an absolute level, rank average at best.
More so, men tend to be overconfident in their financial skills (such as picking stocks). They’re often “one-dimensional” in their approach, that is, while they’ll look at one aspect of the finances, they won’t often engage in holistic planning to ensure they will meet the family’s overall financial goals (i.e. paying for the children’s education, retirement planning). And the biggest characteristic? They are even more unlikely to admit they don’t know what they’re doing than a woman!
Women who solely rely on their partner could be putting their family and own future at risk. Plus, I can’t tell you how many men have told me they wish their wives would get involved and take some of the burden off them. Think about that the next time you hand everything over to him.
Mistake #3: Not Buying Insurance
Women are naturally inclined to protect their family. Yet when it comes to buying that protection in case something unforeseen happens, they procrastinate, or dismiss it.
We all know of someone who’s gotten ill or died unexpectedly. I’ve seen firsthand the many instances where the family discovers there was no critical illness or life insurance and for many of them, it’s financially devastating.
They’re no longer able to lead the lifestyle they’ve had. They stress that they’ll run out of money, and that’s because it’s very likely they will.
If something happened to you or your partner, having disability or life insurance would help you replace the income potentially lost if you or they were unable to provide for the family. It’s a small price to pay for peace of mind.
Download this insurance checklist here.
Mistake #4: Not Creating a Will
Nearly fifty-percent of people do not have a will.
If this is you, by not having one, you are leaving it up to the government and courts to decide how to best distribute your assets, and who will take care of your kids.
Worse yet, you’re opening the doors for estranged family members, ex’s or even business partners to fight for a claim on piece of your assets they believe they’re entitled to. Or that righteous in-law whose lifestyle is so different from yours and yet insists they know what’s best when it comes to raising your kids. All of this could mean a long-drawn and expensive battle in court.
Is that something you want?
Or would you rather have a document that stipulates exactly what your wishes are with no misinterpretation? After all, you spent a lifetime building your wealth – you should have the last say on what your legacy should be. For a few hundred dollars, a good lawyer will help you put things in order.
Read more here.
Mistake #5: Not Investing in Their Future
I see this far too often. The women will take the backseat and sacrifice her career to take care of her family. Others will sacrifice their career to let their partners pursue their passion. Then there are those who go to work day in and day out, either feeling this is good enough, or frustrated that they are not being promoted.
Fast-forward twenty years and some of these women find themselves empty-nesters and feeling they’ve lost their self-identity. Others find themselves divorced or widowed. Every single time, they tell me they wished they had invested more in themselves – by either pursuing a career or at the very least developing skills so they could put them to use in their later years and earn income. It’s easy to leave your financial destiny in someone else’s hands, until it’s too late. Please don’t let that be you. There’s nothing wrong with nurturing your children, but always remember to invest in your financial and mental well-being. Take care of you so you can take care of your loved ones. You’ll be happy that you did.
Questions? Comments? Need coaching? I’d love to hear from you!