The three money mistakes we make - and how to avoid them

Jun 02, 2022

The three money mistakes we make – and how to avoid them


Here at Ladies Finance Club, we are always scouring social media to waste time  find ideas to help you. So it was with great interest that we stumbled on a Reddit discussion asking women about their worst money mistakes.

There were over 300 responses, but interestingly, there weren’t that many different mistakes. The majority could be summed up under a few different themes. Yes, we are all wonderfully individual snowflakes, but we are very predictable when it comes to stuffing things up.

And so, to help you avoid these very mistakes, we hereby give you due warning in the list below.

Mistake 1: Choosing the wrong partner

This was, far and away, the most common error - although it plays out different ways. Firstly, there is shacking up with someone who’s terrible with money; they pull you off track with your own financial goals. Then there are the freeloaders: “dating a deadbeat and paying for everything”, as one woman summarised it. Apparently lending money to these deadbeats is also an oft-repeated mistake, as is inheriting debts they rack up in joint names – the dreaded ‘sexually transmitted debt’.

And then there’s possibly the most expensive mistake: getting married/divorced. From the cost of divorce lawyers to the pain of splitting assets, the message is clear. Think twice about who you are going to couple up with, and if you come to the table with significant assets, consider a binding financial agreement before you walk down the aisle.

Mistake 2: Signing up for products you don’t understand

It used to be credit cards and ’24 months interest free’ kind of deals that got young, inexperienced people into trouble. Easy credit, multiple cards and high interest rates after the promotional offer ends - these have long caused grief for people who make decisions without reading the fine print. Paying off only the minimum amount, and thereby racking up more interest, is also a classic trap.

Now, it’s just as likely to be a buy-now-pay-later product that gets people into hot water. Sure, there are no interest charges, but there are definite risks. The first is spending more than you really should or could afford – the lack of pain at the point of purchase can make it waaay too easy to drop some dosh. Then there are the late fees if you miss payments, plus any other admin fees depending on the provider.

There are really two issues to address here. The first one is reading the fine print so you genuinely understand what you’re signing up for. If it’s in-store, the pressure of making a purchase on the spot can make it even more dangerous. The second is that delaying a payment can shift our sense of what we should be spending – and often makes us hand over more than our sensible selves really should.

Mistake 3: Putting off investing til tomorrow

There were lots of comments from women who didn’t understand retirement saving – and the magic of compound interest – until well into their 30s or later. Luckily for Aussies, we have a compulsory super system that takes some of this choice out of our hands.

But there are still aspects of super we should focus on in our younger years, like finding a super fund with low fees; rolling multiple accounts into one fund (to avoid duplicate fees); and making sure the default insurance is right for our needs.

But outside of super, there are still plenty of investing topics to learn about. Letting our money sit in the bank makes sense in some situations, like when we might need it in the next few years. In many instances, though, we can make way more over the long term by educating ourselves and taking action with investments in equities, property or fixed income.

And even if your 20s or 30s are behind you, there’s no such thing as ‘too late’. The best time to start investing may have been in your 20s, but the next best time is today!

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