Despite progress, women still make these 3 crucial financial mistakes

Woman paying her billsMove over men of America: There's a woman running the family finances.

A landmark study released today by Prudential Financial concludes that a record number of women in the U.S. - 95%, to be exact - are financial decision-makers.

What's more, 84% of married women are either solely or jointly responsible for managing their household finances, according to Prudential's 2010 study on the Financial Experience & Behaviors Among Women.

The study, administered by Harris Interactive, is significant for several reasons.

First, it's the 10th anniversary of this survey; Prudential has updated the survey every two years. So this long-range perspective offers a more in-depth glimpse into how U.S. women have handled their finances in boom and bust periods.

Additionally, the survey highlights some interesting trends over the past 10 years and shows – in the wake of the Great Recession – how much work remains to be done to truly empower women economically.

Despite a decade of progress, with women becoming more aware, engaged and actively involved in their finances, the study also concludes that women lack confidence about providing for their families' future, are behind in saving for retirement and admit being mystified by various financial products, such as stocks, mutual funds and annuities.

Among the survey's other findings:

  • Less than 20% of women polled feel "very prepared" to make wise financial decisions; Half said they "need some help," and one-third feel they "need a lot of help"
  • 64% said they either need to "catch up" (39%) or are "way behind" (25%) in their retirement savings
  • 76% of those polled either plan to work longer (56%) or worry if they will be able to retire on time (20%), due to the recession

Are You Guilty of These Financial Mistakes?

As a Money Coach, I often hear from women who tell me their economic problems and the financial mistakes they've made.

While some women complain about fiscally irresponsible husbands who don't to pay bills on time or boyfriends who ruined their credit, others lament having "loaned" money to relatives or friends, only to see that money vanish forever.

Mostly, though, the women I hear from aren't placing the blame elsewhere. Instead, these women are remarkably honest in confessing their own shortcomings.

They admit overspending. They acknowledge using the credit cards way too much. And they know they've failed to save sufficiently.

So it is with the Prudential Women's Study: the 1,250 women polled this year (aged 25 to 68) candidly acknowledge their strengths, as well as their own economic failings. And the chief financial mistake women are making is that they are failing to properly plan for the future.

Only 33% of the women surveyed said they had a concrete plan to help reach their personal and financial objectives. Among younger women, aged 25 to 34, just 10% had a financial plan.

Whether your goal is to have a comfortable retirement, pay for your child's education, or start your own business, it all starts with a plan.

So if you're a woman who hasn't been planning, stop making the following three mistakes in order to start enjoying a richer, more rewarding life.

Stop Procrastinating

Failing to plan for the future is perhaps the biggest financial mistake you can make. Yet many of us neglect to do smart financial planning because we're procrastinators.

How many times have you told yourself that you'll get around to creating a will, buying life insurance or hiring a financial advisor – only to let yet another year slip by while those tasks remain unaccomplished?

Until you stop procrastinating on handling basic money chores – yes, even those things you might initially find "boring" or "complicated" – you won't achieve your full economic potential.

Stop Multitasking

Women's lives tend to be packed with too many things to do. We work. We take care of children and spouses. We fret over our siblings, parents, friends and partners. We tend to a host of family, social and civic obligations.

And then we try to "squeeze in" time for reviewing our budgets or monitoring our investments – while we're checking the kids' homework or walking on the treadmill, of course.

Although we can (and do) juggle a dozen things simultaneously at work or home, that's not the way to become more financially savvy. Enough already with the multitasking, Superwoman heroics.

Plug your knowledge gaps about personal finances by being willing to S-L-O-W down and focus. Take uninterrupted time to read a good money management book. Register to attend a financial conference or investment seminar. Or simply spend an hour with a financial planner.

By concentrating on one specific thing, your financial affairs, you'll learn and retain a lot more. Boosting your financial acumen will also go a long way toward increasing your confidence in your ability to make good financial decisions.

Stop Assuming

One other finding of the Prudential survey revealed a serious disconnect between women's expectations and reality.

An astounding 75% of women polled believed they could rely on Social Security for their retirement. Most financial experts agree, however, that women (and men) should be actively saving and investing for their Golden Years, not counting on Social Security to meet their retirement needs.

Another assumption women make: that friends and family can give them good financial advice. Over 60% of women surveyed said they rely on relatives and friends – not qualified professionals – for investment information.

People in your inner circle may be good sounding boards, but your social network is no substitute for a trusted, reputable professional when you're trying to fix your ailing 401(k) investments or create a long-term financial plan.

If we women can stop procrastinating, multitasking and assuming so much, we'll reap a host of benefits, including improved financial planning, heightened financial knowledge, and more self-confidence in our money-management skills and abilities.

If you asked me, those are worthwhile goals for women of all ages.

Increase your money and finance knowledge from home

Understanding Stock Market Indexes

What does it mean when people say "the market is up 2%"?

View Course »

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Add a Comment

*0 / 3000 Character Maximum