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Avoid Money Mistakes

I just finished reading Nice Girls Don’t Get Rich by Lois Frankel, PhD.  In it, she sites “75 Avoidable Mistakes Women Make with Money.”  Really, anyone can commit these errors, however, she asserts that women are more at risk due to some of their common predispositions towards money.  Here are a few of the differences between men and women regarding views on money that Frankel points out:

Men:  Invest


Women: Save


Men:  Buy what they need.


Women:  Buy what they want.


Men:  Spend money on themselves.


Women: Spend money on those they care about.


Men:  Ask for what they want.


Women: Ask for what they think they deserve.


Men:  Learn how to be effective investors.


Women: Expect others to know more than they do.


Men:  Advocate for themselves during trying financial times.


Women: Want to be fair during trying financial times. 

Of course, these are just generalizations.  Husband buys things he wants all the time.  You think he needed that PlayStation3?  Oh, please. 


 


Actually, all of the mistakes that Frankel points out are incredibly relevant.  That made it difficult to choose some to share, but here are the ones that I enjoyed the most; my favorite mistakes, if you will. 


2. Not Creating a Financial Goal


As Frankel puts it: “A vision without a plan is a dream, and a plan without  vision is marching in place.”  It’s important to know what you’re working towards in order to make an effective plan.  Rome wasn’t built in a day, nor without blueprints.  Be it homeownership, comfortable retirement, or sailing around the world, don’t let your goal get stuck in the dream phase. 


10. Choosing to Remain Financially Illiterate


Now this mistake I associate more with women than men.  Many of my close friends are either completely uninterested in money management or are completely intimidated by it.  Reliance on someone else to maintain your finances or a belief that somehow things will ‘just work out’ is simply unacceptable in a financially responsible life.  Listen to your inner Boy/Girl Scout.  Be prepared.  And bring cookies.   


12. Managing Egos, Not Your Wealth


If you’ve trusted someone to manage your finances, questioning their methods and or results can be intimidating, particularly if it is someone close to you.  Your financial future is worth more than someone’s hurt feelings.  Now, I’m not saying you should go to your adviser’s office and make it rain office supplies (however amusing that might be).  Just be assertive and maintain the ultimate control of your future. 


15. Living Together Before Discussing Finances


There are couples who put more thought into the furniture arrangement than the financial arrangement.  Where there is no legal commitment, there is plenty of room to be burned.   It’s worth it to sit down and have the painful conversation.  You’ll wish you had done this with your last roommate who still owes you both rent and your prized Backstreet Boys CD. 


18. Not Taking Care of Your Most Important Asset: You


Workaholics everywhere: stop it.   Listen to the doctor: “Taking care of your body and mind is essential to having the physical and emotional stamina needed to earn, manage, and enjoy your wealth.”  It may  be difficult to hop on the treadmill after a long day, but the endorphins are totally worth it. 


26. Not Distinguishing between Wants and Needs


Who doesn’t have a problem with this one?  Spending money on crap is a surefire way to get off budget and further away from your goals. 


42. Thinking You Don’t Have Enough to Invest to Make A Difference


I’ll start saving for retirement when _____(fill in the blank)_____.  If you can complete this sentence, then it’s time to stop procrastinating.  There is no reason why you can’t start working towards your goals right now.  Even if you only contribute $50/month, that’s $600/year more than not saving anything at all.


Article publié pour la première fois le 05/08/2010

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