Money mistakes women must avoid to be financially savvy

Women and men make the same money mistakes, but there are some mistakes women are more susceptible to. Just like any other person, women should not fall into traps that make them lose money or spend on things they don’t need.

Here is a list of situations you must avoid if you want to be a financially savvy woman.

Abusing the credit card

The credit card is called as such for a reason. It takes credit, meaning you are not getting anything you purchase for free. In fact, you are paying for more just so you can buy it now.

It’s not bad to own a credit card. It’s very useful and it will help you purchase things that are too expensive to pay one-time-big-time.

However, using a credit card comes with great responsibility. Make sure you don’t swipe and feel that you got something for free. You will have to pay in cash when your bill arrives and you have to make sure you pay everything on time so that you won’t get a bad credit score.

Giving into peer pressure

With social media’s role in our everyday lives, it is so easy to see how our friends are doing.

Oh, she went on a beach trip? Again?
Another new phone?
Wow, they sure love eating at buffets!

Do not allow seeing these updates on social media to pressure you into buying things you don’t need. You can purchase things you want but make sure that before doing so, you have already covered your basic necessities, bills, savings and emergency funds, retirement, and investments.

Only set-up a “fun fund” once all of these are checked.

Retail therapy

Retail therapy is a myth. You do not have to buy things you do not need just to influence your mood. It is both common and unwise.

According to a University of Hertfordshire study, 79% of women shop to “cheer themselves up”. Here’s the deal: You can also cheer yourself up without having to break your wallet. Emotional shopping is a bad habit that must be avoided.

At the same time, stores and businesses fool women into spending and buying their products. They either make you feel ugly or bad, after which they provide the solution.

Before purchasing anything, make sure you ask yourself these question first:

• Do I need it? If yes, buy it.
• Do I want it? If yes: Can it be sold for at least half the price when I don’t want it anymore? If yes, buy it.
• Will it make me more money? If yes, buy it.
• Will it make me feel better? If yes: Can something else make me feel better? If yes: Is the alternative for free? If yes, don’t buy it.

REMEMBER: There is no reason for you to impress people online. You only need to impress yourself.

Thinking money is a taboo topic

Money is not evil. Whoever said this clearly is an evil person. Money only becomes the root of evil when the person handling it uses it for bad things, much like how a knife can be a tool for murder or a tool for a great dinner.

Do not make the mistake of thinking one should not talk about money because it’s disrespectful. It is more disrespectful to not be transparent about issues that must be tackled, especially if you’re in a relationship or if you’re part of a family.

The cause of many relationship blunders is the lack of transparency when it comes to money. You must know what your partner’s habits are and he must be aware of yours too. In this way, you can talk about ways to achieve your financial goals together.

You must also be open about money issues so that you don’t fall victim to peer pressure. Can’t afford the trip your friends want to go to? Then tell them. Want to save money for your retirement but want to use it on grand Christmas gifts? Then be open about it. You don’t have to lie to yourself, to your goals, and to your future.

These are just some of the financial mistakes women must avoid. While these are common mistakes, they can also be disastrous to your financial health.

However, do not worry. As long as you commit to fixing your finances and avoiding these pitfalls, all will be well.

This article first appeared in thenewsavvy.com

The New Savvy is Asia’s leading financial, investments and career platform for women. Our bold vision is to empower 100 million women to achieve financial happiness. We deliver high-quality content through conferences, e-learning platforms, personal finance apps and e-commerce stores.