Looking to take care of yourself and your family by successfully managing your personal finances? Avoiding the common financial mistakes that can reak havoc in your bank account is key to achieving that goal.
It is becoming increasingly important that women learn to manage their personal finances. 80 percent of single-parent families are headed by single mothers. This means that women are becoming the sole providers in their households.
Women also have a higher life expectancy than men. On average we live five years longer than men. According to the CDC, on average, men will live to age 76 and women to age 81. Making it important for women to be financially literate.
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#1 – Not Having a Budget
Not having a budget is a common mistake that many women make. Budgeting isn’t fun or glamorous but it is necessary.
Budgeting allows you to know exactly how much money you have coming in and how you are spending that money. It also gives you the opportunity to plan the flow of your money.
#2 – Living for Today and Not Saving
Making money decisions based on how you are feeling that day is a big mistake. Being an emotional spender isn’t good for your long term financial health.
Saving money is necessary for you to prevent yourself from going into serious debt in emergency situations. It is also helpful in achieving life goals like owning a car, house, or traveling.
#3 – Not Having an Emergency Fund
Not having an emergency fund is a costly mistake. Many people feel that they should not have an emergency fund if they are in debt or if they have a low income.
This is absolutely incorrect.
It is even more important to have an emergency fund if you are living paycheck to paycheck or you have large amounts of debt that you are trying to pay off.
An emergency fund is designed so that you have money available when unexpected things happen. You not only have the money you need to pay for unexpected expenses, but you also protect yourself from acquiring more debt in these situations.
Without an emergency fund, you can find yourself erasing all of the progress you have made with your debt repayment plan.
#4 – Allowing Debt to Linger
Allowing debt to linger is another common financial mistake. High credit card debt and large student loan debt aren’t hurting you, right?
Wrong!
Carrying debt costs you your hard-earned money in the form of additional interest, can damage your credit if left unpaid, and can cause you unnecessary stress.
Eliminating debt frees you up to do other things with your money. The less debt you have the more money you have to save and invest.
#5 – Not Taking an Active Role in Your Finances
When in a relationship, especially a marriage, we as women sometimes allow our partners to “handle the money”. This is a mistake.
No matter what your financial role is when in a partnership you should always be aware and take an active role in managing your finances. No one wants to think about relationships ending, but they do (for various reasons).
Understanding how to manage money is a skill that you should practice so that you are prepared to take care of yourself when needed.
#6 – Being Too Scared to Invest
41% of women say their biggest financial regret is not investing more. Investing can be a scary venture because no one wants to lose any money. But not investing, can be a regrettable mistake.
There are many ways to start investing. Many of which do not require you to have a vast knowledge of investing or large sums of money. There are also apps and professionals that you help relieve the overwhelm that comes with investing your money.
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