There’s nothing like a recession to highlight where we’ve gone wrong with our money management. But do recent events mean people will be more financially cautious this year?
Given all the horror stories about banks collapsing, asset devaluations, and credit hardships, I was wondering how this would affect people’s money management and future planning, so I did my own research online. through an online survey.
As the new year approached, I asked 200 men and women about their past and anticipated financial management. He was fascinated by the subtle but important differences in the financial resolutions of men and women. Women were very interested in getting better control of their finances in 2010, while men were determined to earn as much money as they could.
Most men said they would focus on maximizing income, and nearly three-quarters of them focused on making more money in 2010. Although about half of the women surveyed said making money was also important, many more said that taking charge of her finances was her main goal for the coming year. These are the main resolutions revealed by the survey:
Women’s Top 5 Money Resolutions for 2010:
- Take charge of my finances more (66%)
- Get better value for money (63%)
- Plan my financial future (62%)
- Being more responsible with money (59%)
- Plan how to make more money (56%)
Top 5 Men’s Money Resolutions for 2010:
- Plan how to earn more money (73%)
- Plan my financial future (70%)
- Get better value for money (70%)
- Take charge of my finances more (56%)
- Reduce my personal expenses (52%)
When we think about how good we are with money, our past mistakes with money often come to mind. The time we blew a windfall on a fancy car instead of paying down debt. We leave the money too long in a poor investment fund. The years it took to set up a pension fund. When the economic climate is reasonably healthy, our finances can take those kinds of hits a little better. It is when times get tough that we are struck by the insanity of our past behavior. And of course, the money we mindlessly waste during prosperous times becomes a loss during lean times.
Not changing a mortgage to a lower interest rate, for example, could cost thousands of pounds over the life of the mortgage. Even that daily cappuccino and newspaper add up to hundreds a year. I’ve also found that one person in three will have a direct debit from their bank account that they should cancel, a magazine subscription they forgot about, a gym membership they never use, or a charitable donation they thought was one. -off that has been taken every year since 1989!
When I asked men and women in my survey about their past mistakes with money, it was clear that women’s biggest mistake was not being as honest as men when asking for money. Whether it was pressuring the boss to raise his salary or negotiating better rates for self-employment, many women had less for fear of asking for money or undervaluing what they had to offer.
Looking at the differences between men’s and women’s spending behavior, I found that women spend more emotionally. For many women, that usually means shopping when they’re feeling down, unhappy, or stressed. Women were also more likely to name children’s treats as one of their financial weaknesses. This is another example of how, when it comes to money, women are not so good at putting themselves first. After all, women are socialized to take care of others and arrogance is not a quality that is encouraged in girls, but it is clear that later in life this can leave them poorer. This is something I try to address at Sheconomics and is highlighted in the following statistics from the survey:
The most common money mistakes made by women (and men) in the past:
- Emotional spending 70% (men 61%)
- Reckless spending 64% (men 39%)
- Reluctance to ask for money 62% (men 47%)
- Spending on children/dependents 46% (men 30%)
- Fear of money 44% (men 48%)
