Top Mistakes Women Make
By Anthony C. Williams, ChFC, MRFC, CLU & Sheila M. Evans
#10. Facing difficult situations alone
Having professional, unbiased advice when dealing with death, divorce, or other life-changing events can make a huge difference in your bottom line. When our spouses or parents die, having solid, trusted partners to help guide the financial decisions can prevent costly mistakes.
#9. Divorce-induced paralysis
Divorces are exceedingly destructive to wealth. In addition to the dollars that are diverted to pay attorneys’ fees and the time and energy lost dealing with division of assets, it can also be paralyzing to see your financial progress reversed or scrapped completely. It can be hard to know how to start over alone. See #10 and seek the help of a trusted advisor.
#8. Short-sighted perspective
Women are likely to live 6-8 years longer than men. So why are their investment portfolios about 2/3 the size of men’s? Part of determining a suitable risk profile involves consideration of the time horizon. In addition to preferring “safer” investments, women also lose out on saving during breaks in employment to care for children or aging parents. These short-term decisions can have long-term effects on portfolio performance and retirement age.
#7. Spending Problems
Two major forces tend to drive problem spending: competitive spending and therapeutic spending. When we purchase things we don’t need because of the company we keep or because “we deserve it”, bad habits are formed. Peer pressure among adults can take many forms. Saying NO to that expensive vacation invite or dinner splurge after a long, hard week can take will power. Lacking discipline in your spending can eat away your wealth.
Do you know what’s on your balance sheet? What you own and what you owe? Can you name your CPA, financial advisor and attorney off the top of your head? Do you know how much you spend every month? If you’re married, do you and your husband handle the finances together? How can you get to where you’re going if you don’t even know where you are?
#5. Deprioritizing yourself
Just as you are instructed to put on your own oxygen mask before helping others at 30,000 feet, you must put yourself first in your personal finances. While putting others first is a noble mindset, when it comes to your future, draining your retirement savings to pay for college tuition or other familial financial assistance can be detrimental.
#4. Avoiding the subject
Why are people so funny about money? There is no secret that talking about money makes many people uncomfortable. It can evoke feelings of anxiety, worry, confusion or even jealousy. A few bad conversations can make a couple shut down the subject completely. This might work for a time…until something goes wrong. It’s imperative to stay current and aware.
#3. Cloudy decision-making
It’s no secret that women are naturally inclined to say “yes”, and to advocate for others before advocating for themselves. Trusting a relationship over a contract, walking away from an important conversation in exasperation, or giving into guilt are the norm for many women. Having a fact-based decision-making process can reduce regret.
#2. Empty toolbox
What risk management tools are in your toolbox? What about asset protection? Tax planning? What about insurance to protect your loved ones? Even if you have the time and wherewithal to manage your financial life, do you have the tools? There are resources available for every level of investor, whether you’re a beginner or seasoned investor, delegator or do-it-yourselfer. Get the tools.
#1. No direct involvement
The number one regret shared by women surveyed in recent years is that they let someone else handle their finances without their involvement. Sometimes it’s a parent, who continues helping with finances long after independence, but most often it’s a partner. Letting their spouse handle all of the finances sets women up for failure in both possible scenarios: death or divorce. In either case, grief will be compounded by the anxiety of feeling completely lost in handling finances. Knowing what you’re signing, attending meetings together, and all other manner of direct involvement is the best way to protect yourself and maximize your future wealth.
Securities and Investment Advisory Services offered through NEXT Financial Group, Inc. Member FINRA/SIPC. Mosaic Financial Associates is not an affiliate of NEXT Financial Group, Inc.