Common Financial Mistakes Women Make And How To Avoid Them

In a recent Fidelity study, it was revealed that many women are taking proactive steps to better manage their money. This includes making smart purchases, successfully managing household finances, and striving for financial independence. However, along with these positive actions, women also admit to making some costly mistakes when it comes to their finances.

One of the most common mistakes highlighted in the study is the lack of sufficient emergency savings among women. According to Lorna Kapusta, head of women and engagement at Fidelity, having an emergency fund is crucial for unexpected circumstances such as losing a job, medical bills, or home repairs. Many women are realizing the importance of building an emergency fund and are taking steps to prioritize this aspect of their finances.

In addition to emergency savings, the study also found that a significant number of women are not following a budget. Kapusta emphasizes the importance of budgeting in understanding spending habits and working towards financial goals. She provides practical steps for creating and sticking to a budget, including setting goals, tracking income and expenses, and making adjustments as needed.

Another key finding from the study is that a considerable number of women regret not prioritizing their finances early enough or starting to save for retirement too late. Kapusta stresses the importance of starting to save for retirement as early as possible to take advantage of compound interest and give investments time to grow. She recommends aiming to save 15% of income towards retirement annually and seeking professional guidance if needed.

Lastly, the study reveals that many women have accumulated “bad” debt, such as credit card debt with high-interest rates. Kapusta advises prioritizing paying off debts with high-interest rates to avoid paying more in the long run. By focusing on reducing “bad” debt and increasing savings, women can work towards a more secure financial future.

Overall, the study sheds light on common financial mistakes made by women and offers valuable insights on how to mitigate them. By taking proactive steps, such as building emergency savings, following a budget, starting to save for retirement early, and managing debt effectively, women can improve their financial well-being and achieve their long-term goals.