Guest contributor Dale Marie Golden, VP of Alta Alliance Bank presents her vast experience with women and money. Want to know how she learned tough lessons which, in my opinion, vastly qualifies her to help women with money? Call her: 510-899-7536.
On the topic of women in business and finance, I found it interesting that when I googled “mistakes women make with money” I found there were thousands of “mistakes women make with men,” “mistakes women make when dating,” and the most common was what “mistakes women make with sex.” Either women don’t make mistakes with money or the priorities are skewed a bit.
I think the number one mistake women make with money is that someone else will take care of it. According to The Female Finance Factor, “62% of women manage the family’s checking account.” However, I find the majority of women are still unclear of how the money is coming in and where it is going. There is also the magical thinking that you will win the lottery or receive an unexpected inheritance. However, the biggest flaw is the expectation that a partner or spouse that will carry you through the hard times.
Women on average live six times longer than men. Women many times find themselves with no retirement and facing college age children with elderly parents. Now if your partner or spouse loses their job or dies many women are completely unprepared for the consequences.
So the number one advice I have for women is to take charge of your finances. Know what is happening on the very basic level of your checking and savings vehicles to the more sophisticated nuances of your investments. Indeed, knowledge is power and there are so many resources, including books, seminars and the internet.
The number two mistake I think for women is the ability to care for everyone but themselves. Women indeed are the nurturers for their friends and families, yet many times they overlook themselves.
Financially, one of the most empowering things for women to do is to save. Yes, old fashioned saving. It is crucial that women set up a savings vehicle, rather it be a regular savings, a money market, a short term CD or mutual funds. Depending on your risk tolerance each has the ability to have your money make money rather than sitting in a non-interest bearing checking account.
Saving money is actually easy when done automatically. If you set up auto pay to your savings vehicle on a monthly basis – you will not even that miss that money. Emergencies do happen and having some sort of savings plan can keep you from paying unnecessary high interest on a credit card. Also if you are a sole proprietor it is a way to automatically put money aside for taxes and retirement.
Speaking of credit cards, they are a woman’s worst enemy. I know, because many times they have become my demon. You pay off your credit cards and then in one fell swoop you charge it up again. It is the quickest way to get into debt and the quickest way to stay in debt. Men and women tend to spend more when using a credit card, that is proven.
However, the mindset of many women is that they will just do this now because they know that big bonus is coming, or that big account is going to come through or finally that client is going to pay you. The majority of the time the big payoff is not as big as we thought and you are left with a bill you can’t pay off at the end of the month and an interest rate that is climbing astronomically!
If you can’t pay for an item now, wait until you can. If you can pay for it now, it’s fine to use your card and build your credit. If you know you don’t have that self discipline, take it out of your wallet and put it in a drawer now!
The fourth largest mistake is taking advice from a well-meaning friend rather than an expert. This ranges from the type of accounts you have at the bank, the type of mortgage to the type of stock investment. Everyone can find a personal banker at their own bank. Even the large banks have personal bankers, you need to ask.
One of the many advantages of a small bank is that the officers of the bank will be far more accessible to you. A personal banker knows what is happening in the community in terms of trends and is a good source for financial advice. You might be able to dabble with some stocks on E-trade, however sometimes you get what you pay for and it is great to have an expert help balance your portfolio.
The fifth mistake is women feel they are out of control with their finances. Many times talking about money becomes overwhelming. The best advice is to empower yourself and take control of your money.
You work hard for your money, don’t let it sit and not work for you.
If you know what you make and what your expenses are you are well on the way to not only budgeting, but taking control of where you can cut expenses, where you can save more and thus in the long run make more. Money can be magical, but it doesn’t necessarily come with magically thinking.
Wishing you well on your journey of managing your money. You deserve it!