Top Five Things Women Do Wrong with Their Finances


You don’t have to have an MBA or watch The Wolf of Wall Street in order to get into finance. Even if the thought of tax season makes you shudder, managing your finances can prove to be more beneficial than boring.

So, here are the top five mistakes women make with their finances and what to do instead. No need to put on a blazer – you can start getting your personal finances on track from the comfort of your couch.  

Not Being Financially Literate

The first step to taking control of your finances is knowing what you’re talking about. Studies have shown that, on average, women report having a lower rate of financial literacy than men, even though women are increasingly becoming the primary earners in a household, according to Forbes.

The simplest way to learn something new is to take a class. There are hundreds of free personal finance classes online and most are self-paced to fit even the busiest schedules. You can learn from experts on platforms such as,, and Take an overview course or a deeper dive into specific topics like credit, housing, and investing.

If you want to do some reading on your own, websites such as,, and should be your go-tos. If podcasts are your thing, start with Afford Anything which breaks down complex financial topics with a focus on how to save and manage your money.

Finally, if you want a more personalized conversation about your personal finances, don’t hesitate to reach out to a financial advisor at your bank or credit union. These appointments are usually free and can be set up in person, over the phone, or virtually.

Misusing Credit Cards

Studies have shown that people spend more money when they use credit cards than when they use cash. Besides overspending, another mistake people make with credit cards is making late payments and letting bills pile up. Not only does this rack up more interest on your account (that you have to pay off later), it contributes to a lower credit score.

According to the US Federal Reserve and the credit bureau Experian, the average credit score is 680 and the average household has $6,200 in credit card debt. Even making the minimum payment each month can set you on a track to improving your credit score and reducing your debt. A higher credit score means you’ll qualify for lower interest rates, a better mortgage, and lower car payments. 

Another mistake is only having one credit card. Having multiple cards is a great way to take advantage of rewards programs and help your credit score in the long run. Most credit cards also have cash back which lets you earn money while you spend. Choosing different benefits for different cards can help you earn cash back on groceries, accrue airline miles, or save money on gas – your benefits are up to you.

Not Investing

Numerous studies have shown that women are less likely to invest their money than men. BlackRock found that men are more likely to invest in stocks, while women prefer to keep their money in savings accounts as cash. This contributes to a growing wealth gap between men and women, and women are missing out on as much as $1 million over their lifetimes because of it.

The number one way to start investing for your future is to start a retirement account. Saving for retirement is more important than ever for women who live longer than men on average. You may already be familiar with the standard 401k which many employers offer, but another option to save for retirement is a Roth IRA. A traditional 401k invests pre-tax dollars which lowers your taxable income each year. A Roth IRA invests your money after taxes, so all the growth is yours to keep. Find out which type of plan is best for you and don’t wait another day to get started.

Investing can also be fun and as easy as downloading an app on your phone. Investment apps such as Acorns and E-Trade allow you to invest your money in stocks and track the progress of your savings. Acorns allows you to invest small amounts of money such as spare change, while with E-Trade you can make larger investments without maintenance fees. These apps are geared towards beginners so you can learn about the stock market and investing strategies as you go.

You can even make investments that fit your values. Ellevest is an investment platform built by women committed to reducing the wealth gap. Sustainable or “green” investing is another strategy to put your money only in stocks that are committed to helping the environment – think wind farms instead of oil companies. No matter how you go about it, investing is one of the best ways to save for your future and help close the wealth gap. 

Not Spending Smartly

Online shopping and subscription services have become two of the leading industries in e-commerce. When you can buy at the click of a button, it’s easier to ignore how much you’ve spent. Thankfully, there are plenty of ways to track your spending that will help you monitor your purchases and find deals on your online shopping.

Albert and Mint are two free financial monitoring apps. The apps will watch your spending, so you’ll always know you’re on track to meet your saving and spending goals. Other companies like YNAB and EveryDollar have more budgeting features but come with purchase or subscription fees. Whichever you choose, tracking spending habits can help you understand your shopping habits and make more mindful decisions.

Another way to spend your money smarter is to stop paying full price. Penny pinchers and coupon queens are a thing of the past – now, you can get savings on online purchases automatically. Honey and Wikibuy are two browser extensions that check for discounts whenever you shop online. You can apply your savings at checkout and get cash back at participating retailers.

Finally, if you’re prone to going over your budget, a tried and true way to be more mindful about your spending habits is to simply use cash. Since cash is tangible, spending it feels more real than using a credit card, which can make any shopaholic think twice about their spending habits.

Not Having a Clear Plan

You know yourself best – your priorities, your guilty pleasures, your goals for the future. Having a clear personal financial plan is the best way to make sure that you are preparing for your future. Studies have shown that simply writing down your goals help you to achieve them, so whether it’s saving up for a house or a Gucci belt, making a long-term financial plan early on is the first step.

The best long-term financial plans include the following elements:

  • Clearly written goals
  • A statement of your net worth – your assets (such as savings and investments) minus your debts
  • An analysis of your cash flow and your budget – how much you earn vs. how much you spend and what you’re buying
  • A plan for paying off your debt
  • A plan for retirement
  • A review of your investments, insurance, and taxes
  • A plan for your will and estate

Even if you don’t have a lot of money right now, a financial plan can help you understand your current situation, fix anything that doesn’t align with your goals, and prepare you for emergencies and life’s unexpected twists. The Schwab 2019 Modern Wealth Survey showed that 60 percent of people who have a written financial plan feel more financially stable than those who don’t. Start writing your plan today or consider finding a financial advisor to help you.

Final Thoughts

It’s no secret that the financial industry wasn’t made with women in mind. Despite challenges, women have become top earners, are more likely to earn advanced degrees, and report feeling more fulfilled in their careers. With this in mind, think of your personal finances not as a chore, but as an opportunity to move the needle towards equality and financial growth for all women. Every financial decision you make, no matter how small, will help you achieve your goals and help future generations of women achieve theirs, too.


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