Recently I read an interesting article about common personal finance errors that women tend to make. This article got me thinking about how gender has affected my approach to personal finance. Although women are a diverse group of people, we may be more likely to make certain financial mistakes due to factors like social conditioning. Here are three financial mistakes that I’ve noticed women are more likely to make, myself included!
Participating in Shopping Culture
Men aren’t immune to consumerism and often indulge in expensive tech gadgets and outdoor gear. But in my experience, shopping culture has a stronger hold on women. We’re more likely to view shopping as a social activity and enjoy milling about the mall. Men tend to be destination shoppers who only head to the store to buy what they need, not browse around.
Participating in shopping as a hobby and bonding activity may cause women to spend more money on nonessentials, which can hinder our financial progress. I’m guilty of indulging in retail therapy to cheer myself up and inviting friends to the mall to hang out.
It can be hard to break these behavioral patterns, but I’ve been able to curb my shopping habit by finding inexpensive hobbies I enjoy. Instead of shopping, I spend my leisure time reading, trying new recipes, working out, and birdwatching. I’ve found that these activities can be just as satisfying as shopping, so I’m not missing out by avoiding the mall.
Being Overly Generous
Although both men and women can be generous, studies have found that women tend to volunteer and donate to charity more often than men. Women are also more likely than men to prefer giving back to others rather than spending money on themselves.
This research matches my own experiences. Although my parents are both giving people, my mom takes generosity to the next level. She still sends me huge care packages even though I moved out years ago. During my childhood, she always gave my teachers giant gift bags full of goodies at Christmastime.
She loves giving gifts and her generous spirit is one of my favorite things about her. However, my parents are approaching retirement and don’t have a lot of savings. So I wonder if my mom’s generosity is one of the reasons they don’t have much invested.
It’s OK to Pull Back
Although generosity is a wonderful character trait, you shouldn’t help others to your detriment. You have to make sure you’re in a good financial place first and foremost. After all, you can’t pour from an empty cup!
If giving back starts to feel stressful, it may be a sign that you need to pull back and focus on yourself for a while. For example, studies have shown that women are more likely than men to feel pressure to overspend on Christmas gifts.
If your budget is tight and gift-giving feels like a burden, it’s not selfish to cut back. Remember that gifts are optional and your financial well-being is more important than finding the perfect presents. It’s okay to set a lower budget for presents this holiday season so you don’t overstretch yourself financially.
Failing to Ask for Raises Regularly
Another common money mistake women make is failing to ask for raises. For instance, 73% of women refrained from asking for raises during the pandemic, compared to 58% of men.
Research has also shown that women tend to diminish their skills and achievements starting from a young age. Because women are often encouraged to be modest and polite, we usually have a hard time with self-promotion at work, which can negatively affect our earnings.
I’m guilty of this mistake myself. As a freelancer, it’s my responsibility to increase my rates. I don’t get merit raises or cost of living adjustments like my spouse who works for a large company.
I should probably raise my prices on an annual basis, but I don’t always do this. I work with a lot of small businesses and don’t want to burden them with a price increase. I’m sure they’re already dealing with plenty of inflation in this economy!
I also feel like I need a reason to raise my rates. If I haven’t improved my skills or services in some way, it feels wrong to boost my prices. But I need to break out of this mindset because it’s not benefiting me financially.
I’d love to hear from other women in the comments. Have you ever made any of these mistakes? What are some common financial errors you’ve seen women in your life make? Let me know!
Read More
Why Women Invest Less And What To Do About It
My Favorite Personal Finance Books for Women
4 Traits for Success Among Wealthy Women from All Walks of Life
Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.