Series 5 has all been about managing finances in times of uncertainty and moving from uncertainty to thriving, and for this final segment of the series I am sharing with you three of the most common mistakes women make with money and the reasons why I think that women struggle to create wealth. Getting into a mindset of thriving around finances can be challenging, and I’ve actually also got a free masterclass coming up for you on the 6th of July. In the masterclass we’re going to be doing a very deep dive into the six essential habits to creating wealth when you’re a busy woman.
You can register for the masterclass here and join me talking through those six essential habits to creating wealth, the common money blocks that may be holding you back and how to banish them. We’re also going to be talking about getting financially naked, which is not quite as scary as it sometimes seems. We’ll be talking through a weekly meaningful and powerful money date that you can have with yourself, including a template that you can download.
3 common mistakes that women make with money
There’s actually a lot of mistakes I think that we make, but it’s through no fault of our own really. I just want to pick up on three of the most common ones that I see.
- Mistake 1: Focusing on action
- Mistake 2: Not knowing our numbers & focusing on more
- Mistake 3: Not investing
1. Focusing on action
The first one is we focus on the action, not the emotions and the thoughts that we have about money. This is a really important one. How many times have you self sabotaged? How many times have you received money in and it’s felt so uncomfortable that you’ve just got rid of it as quickly as possible? Or how many times have you thought about what you need to do? What action do I need to take first? How do I get more clients? How do I get a pay rise? How do I make more money? How many times do we think about that?
The problem is that if we focus on the behaviour, then it doesn’t always follow through. It doesn’t always happen. We make these plans but then we don’t follow through, and there could be a number of different reasons why that can be the case. It can be your inner critic comes out and says you’re not good enough. You’re not worthy enough to do that. Or it could be a lot of other factors. But how many times do we think about the action first?
If you think about the way that the brain works at a chemical level, a neurological level, what happens is that before the action actually happens, before we actually get up and do something, we have to have a feeling and there has to be an emotion attached to that feeling. So let’s say for example, I want to launch a new course. That’s the action. The action is I’ll go and set up a Facebook group, build a tribe, and then launch it. But if you don’t feel worthy enough of launching that online course, or there’s a bit of imposter syndrome going on, there’s that little inner critic that says no, you can’t do that. You’re going to get found out. You’re a fraud. All of these little messages that the inner critic tells us sometimes protect us, but often they don’t and they actually self-sabotage.
How would it be if we reversed that? Rather than thinking about the action, we think about what do we need to be saying to ourselves, what do we actually need to believe is possible? I’ve just won an innovation award from NextGen Planners during their ‘Future of the Profession’ awards, but in order to win that I needed to believe it was possible in order to nominate myself in one of the three categories. I needed to have that belief, because if the belief wasn’t there the action wouldn’t have happened. So think about that in terms of wealth creation.
If we’re not focusing on how we feel about money, if we’re not focusing about what the thoughts are – which sometimes can be unconscious, sometimes we don’t even know that they’re there, and then all of a sudden it just comes up. Creation of wealth is actually more about focusing on our thoughts and our beliefs first, before the action. The action happens as a consequence of the thoughts and the emotions. If you’re interested in diving into this a little bit more, I’ve done various podcast episodes on this, and actually last week I ran through the Money Atom exercise. And the Money Atom exercise is a 13 step exercise that you can go through to really dig deep around your emotional relationship with money.
2. Not knowing our numbers & wanting more
The second one is we don’t know our numbers and we focus on more. So we focus on needing to create more wealth but we don’t know our numbers.
How much do you really know your numbers? Do you go in and check your accounts every day? Do you check them every week? Do you check them once a month, or do you leave it until the end of the year? From a business finance perspective this is particularly relevant. Often we see business owners when they get to the end of the financial year get into massive overwhelm because they haven’t kept on top of their numbers throughout the year. And then it comes to the end of the year, they’ve got to do that tax return and it’s a headache. I’ve been there. In the first year of my business I didn’t really pay much attention to my figures.
If someone said to you, how much is your pension worth? What have you got in your investment pot if you have any investment pots? What’s in your bank account right now? What have you spent so far this month? We don’t always have a close handle on that, on our numbers. Now this can be very linked to reason number one; because we feel bad. We feel bad about our money. We feel guilt, shame, and judgement. We feel not good enough, not worthy enough. And that stops us from knowing our numbers. Knowing your numbers is really important, but also not just focusing on more.
We’re in such a consumer driven society where it’s all about wanting more, more, more – a bigger TV, a better car, a nicer house, the latest iPhone. We’re always focusing on more. And I want to share something with you. What would happen if you were to think about creating less? What do you want less of in your life right now?
How many of us feel overwhelmed every single day because we live in this world of excess. Comparisonitis, keeping up with the Joneses, worrying about what people are going to say, worrying about what people are going to think. That can have a huge impact on our wealth creation journey, because as women we do go through more challenging cycles in our life because we often are the caregivers. We often are looking after children, and from a care-giving perspective there’s lots of data and research to show that we are more likely to have significant periods of time where we’re not earning. And some of you may be thinking well, I’ve left it too late, so I’m not going to do anything. And then we get into our fifties and our parents start to age, and then we feel more responsible to look after our parents because we’re the caregivers. It’s just built into our DNA, being the carers. That can have a huge impact on that gap that we’re then left with, with no income potentially.
Or perhaps earlier in our lives when we’re in our 20’s, 30’s, and 40’s and we’re having family, we can have periods of time when we’re out of work, you’ve taken a career break, or we’re relying on our partners wealth creation and pensions, for example.
I’ve had so many conversations recently with women in their 50’s who have contacted me and said, is it too late to start contributing to a pension? And I always ask them about what their goals are. So what is it they’re intending to do? Why is it they want to start contributing? Do they know how much they’ve got currently in their investment pots or pension pots? Because it’s really important knowing your numbers first so you’ve got a guide as to how much you need to be contributing into things like pensions. Knowing your numbers, but also thinking about it’s never too late. Which really is a fourth common mistake, because we do start too late. But just because you started late doesn’t mean you shouldn’t start.
Focusing on more
Think about what you want less of. So if something’s creating overwhelm for you, could you clear some stuff out? Even things like clearing out your wardrobes, clearing out your kitchen cupboards – that whole process of clearing out and de-cluttering can have a huge impact on our mindset, how we feel, and then how we behave. So that’s a really good starting point.
We do live in a world of excess, so thinking about what we can remove, not just about what we pursue. What we pursue is the easy bit, that’s the easy bit to work out. But what do we want to ignore? That’s the harder bit, because often that’s challenging. Sometimes it can be difficult or awkward to think about what to avoid. A useful little exercise is just to think about what is wasteful in your life right now, what’s complicated. What is excessive that you don’t actually need? Even things like direct debits. What do you really need? The 10 subscriptions that we have coming out of our account right now, do we really need to be signing up to 7 more apps this week that have a 7 day free trial? Things that we never end up cancelling! It’s very clever, they know that human behaviours are driven by the need for wanting more.
I just think it’s really interesting to think about wanting less. And what would that mean for you financially? Could you redirect that money that you’re saving into an investment? No, because we don’t invest, right? Because we’re frightened, we’re scared. We don’t understand risk. We’ve never been taught risk. We don’t understand the stock market – and that’s some of what I’m going to dive into during the masterclass.
There’s a concept called the law of subtraction. Many of you have heard of law of attraction, but the law of subtraction is essentially what I’ve just described: thinking about what do we want less of rather than what do we want to be more abundance of. What do we want to get rid of? What’s excessive in our lives. And this can be huge by the way. This can really make a huge difference in terms of our wealth creation journey.
3. Not Investing
We’re not investing. I’ve run several workshops on investing in the stock market and I have an investing for beginners course. The ladies that have been through that program, the biggest outcome they have had is confidence. And that’s the reason why we don’t invest in the stock market – because we’re not confident and quite rightly so because nobody teaches us this stuff. So I’m on a real mission because I really would love to help as many of you as possible by the end of this year to move from a position of where you are right now to start creating your own wealth paths, your own wealth journey.
It’s important that we are independent, not co-dependent. Even if you are in a very happy, great, positive relationship, it’s still important I believe to have our own buckets of money, our own pots of money, our own wealth creation pots. Because it’s empowering, because you never know what’s going to happen, but mainly the mindset shift when you start to move towards wealth creation and the feelings that that harbours is immense.
Many ladies I’ve worked with this year, when I’ve helped them to build their businesses and when they’re in that position of financial stability, they’ve then got that security. Let’s say they’ve grown a membership for example, and they’ve got a hundred members in there and that’s providing them with an ongoing revenue every single month, that gives them that financial security. Whenever I think about business, it’s a great place to start, because if you can create an income stream for yourself that gives you that stability, whether it’s through a membership or a course, or even things like a second property with rent and income coming in, when you’ve got that stability, anything then becomes possible because we harbour good positive feelings about stability. We feel better. It protects our wellbeing, our emotional wellbeing and our physical wellbeing. Financial stress will be linked to all sorts of mental health illnesses.
3 common mistakes that women make with money
So those are the three common mistakes that I see that women are making.
- Focusing on the action first, before the behaviour. It’s a bit like saying I want to go to the gym, but if you haven’t got the motivation behind it, it’s not going to happen. So focus on the emotions and the thoughts you want to create first. Focus on the motivation. When you get motivated, you’ll take action.
- Not knowing numbers and focusing on wanting to create more of all the time, rather than thinking about de-cluttering first and clearing out some excess baggage. Clearing out subscriptions, direct debits, those sorts of things.
- Not investing: Then think about now I’ve got a little bit of money to play around with, even £50 a month, I’m going to start to invest. We aren’t making more money is because we’re not investing. We’re sticking to cash.
Statistically, if you look at the account opening numbers around cash ISA’s, more women hold cash ISA’s than men because we stick to cash because it’s safe. We feel secure. But actually if we just spend a bit of time understanding the stock market and understanding the benefits, some of which I’m going to be talking about in my master class, then that’s when we can start to move from just saving to wealth creation.
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