Here are some common mistakes that a lot of women make and that you can learn to avoid:
Learn to live below your means. If you don’t have cash to back up your credit card spending, then do not charge it unless it is a real emergency. Avoid late fees that will lower your credit score. If you cannot make payments on time, call the company and explain why not. Sometimes they will be willing to waive the late fee and work out a payment schedule.
- Spending money on the kids and grandkids and not saving
Put your savings first! Resist giving expensive gifts and large sums of money to your children, grandchildren or other family members at the expense of your own savings and retirement funds.
- Not getting involved in managing the family’s finances
Many women are involved in managing the family’s day-to-day finances, like paying bills, but fewer women are involved in the bigger financial picture, and often leave things like the retirement plans and long-term investments to their spouse or partner. Know where your family’s money is, how it is being spent, where the information about all the retirement plans is located, what other assets there are, and what they are worth. Make sure you are making both the short and long-term financial decisions together. Women will likely outlive their husbands; be prepared and knowledgeable in the event you someday have to manage the finances on your own.
- Spending your tax refund
Many people treat their tax refund like a windfall that they can use to splurge on things that they may not actually need. Instead, try thinking of your refund as an easy way to give your savings, emergency fund or retirement accounts a boost. You can even automatically purchase savings bonds with your tax refund when you file your taxes using Form 8888.
- Not realizing that you may end up living on your own someday
Women live longer than men on average. It is a good idea to be prepared to manage your own finances, and plan accordingly for the additional years you may live after your spouse or partner dies. Furthermore, half of all marriages end in divorce. One way to protect yourself is to make sure your name appears on all of your family accounts and investments, either solely or as a joint owner. This establishes your legal right to at least part of these assets if your partner becomes ill or incapacitated, or in the event of a divorce.