Sometimes, we as women can be our own worst enemies when it comes to our personal finances. And while some of our mistakes are more harmful than others, what they all have in common is that they’re avoidable.

In all fairness, this list can apply to anyone, regardless of gender. However, we’re looking at these common financial mistakes through the lens of women in hopes of identifying what it is that inspires some of us to undermine our own financial well-being.

Waiting for “what’s next”

If you’ve ever told yourself that you’ll begin contributing to a retirement fund or otherwise investing when (fill in the blank) happens, you’ve already cut yourself short. Let’s be honest; most of us are waiting for something big to happen. It seems as though we move from “when I graduate” to “when I get into a long-term relationship,” or “when the kids are older.”

No one is promised tomorrow. And even if we were, we wouldn’t know what tomorrow will bring. Putting off financial issues until your life seems more stable or until you’re rolling in cash is a costly mistake.

The earlier you start investing, the more time your money has to grow and work for you. Here’s a breakdown of the power of compound interest over time:

Age of First Investment: Amount Invested Weekly: Average Return on Investment: At age 67, the investment will be worth (rounded):
25 $50 7% $597,800
30 $50 7% $415,600
35 $50 7% $285,700
40 $50 7% $193,100
45 $50 7% $127,000
50 $50 7% $80,000
55 $50 7% $46,400
60 $50 7% $22,400

Data source: Author’s calculations (rounded to nearest $100).

Takeaway: The earlier you begin to invest (even a very small amount), the longer your money has to grow.

Handing over financial power

According to the Pew Research Center, not much has happened to narrow the gender gap in pay over the past 20 years or so. Back in 2002, women earned, on average, 80% as much as men in the same job. By 2022, women were still earning only 82% of what men earned.

Worse yet, some of us place our financial well-being into the hands of someone else. That “someone else” is typically a romantic partner. While it may seem logical at first, there is a risk associated with giving up financial independence.

The Pennsylvania Coalition Against Domestic Violence (PCADV) reports that financial abuse occurs in 98% of all abusive relationships and is the top reason a victim stays in or returns to an abusive relationship.

That’s not to say that any woman who hands her finances over to a partner will be abused. That is absolutely not the case. Sometimes, one person in a relationship is better with money, and as long as both partners agree with the arrangement, there’s nothing wrong with leaving the bulk of day-to-day financial concerns with one person.

Even if your partner is “better with money,” you owe it to yourself to understand how the household budget works, know where your combined money goes each month, and create a plan for how you’ll take over financially if your partner leaves or dies.

Takeaway: It’s okay for one partner to head up financial planning, especially if they have a gift for it. However, each partner in a relationship should have the same access to money. Just as importantly, each partner should understand how household finances work.

Spending on others rather than investing in ourselves

A large majority (80%) of all single-parent households are headed by women, and more than 1 in 5 American children live primarily with a single mother. And for several reasons, including the way women are socialized to “be nice” from an early age, women tend to become family caregivers. In fact, we’re often looking out for our parents while still raising children.

It’s natural that we are first to notice when a parent needs a new living room lamp or one of our children is due for a new pair of tennis shoes. It’s not at all unusual for a woman to see to the needs of the people she loves without considering her own needs.

Note: We recognize that this is a gross generalization, and while it is sometimes accurate, there are plenty of families in which a man is both the caregiver and more self-sacrificial partner.

Takeaway: If you don’t have an emergency fund in place, start building one now, even if you can only put a few dollars away at a time. Before you’re tempted to spend money on someone you care about, ask yourself if you’re on track for retirement and if the person you’re hoping to rescue has the capacity to rescue themselves.

We’ve come a long way since before 1974 (when a woman needed her husband’s signature to open a bank account), but we still have a long way to go. Fortunately, there are steps we can take to avoid repeating our past mistakes.

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