As working moms we manage a lot of things. Finances sometimes fall on the back burner – because they are not exciting and we simply don’t want to deal with them. But because finances are #1 reason for divorce and family disagreements, it is critical that we don’t ignore them. So let me share some common financial pitfalls of working moms.
#1: Gifts to Compensate Being Away from Kids
The very first type of financial pitfalls of working moms is that we have a tendency to use our money to compensate our kids for being away from them.
Have your child ever asked you to get him or her an expensive toy? Something that you thought was way overpriced? But you ended up saying yes because you have been very busy at work lately and you are feeling guilty about it.
And you feel like saying no to your kids will make you feel more guilty. So you think to yourself – it’s just money. I think we all do it from time to time.
But we have to be really careful here for it not to become a habit. For one, it might start negatively impacting our overall financial situation. Especially when we make purchases that we don’t really have the money for. And that will create bad financial habits for our kids as well. They will learn that they can buy whatever they want without really thinking about how that will affect their overall financial situation.
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#2: Living Above our Means
The second financial pitfall is that we live above our financial means. We keep spending money to live a certain lifestyle. This is usually a result of comparing ourselves to others. It could by buying an expensive house because our friend just bought hers and you want the same for yourself. Or it could be in simple things like buying breakfast, lunch, and coffee every day because that is what everyone else is doing at your office. So again, you don’t want to be any different.
And now with social media in full force, it is so easy to fall into that comparison game. We see other people’s clothes, what they eat, where they go on vacation – and we cannot help but want the same for ourselves.
When I start falling into the comparison trap myself, I have to remind myself of what Dave Ramsey who always says that we have to stop comparing yourself to the Joneses! Why? Because the Joneses are broke! They are also overspending and living above their means. But just like us – they are pretending.
#3: Mindset of ‘I Work Hard so I Deserve It
And this brings me to another point. Because we work so hard – at our home at at our job – we have a mindset of ‘I work hard so I deserve it’. The ‘it’ being things. Those type of financial pitfalls are very common in today’s society,
As working moms we spend long hours at work. Then we come home and take care of all the household responsibilities. Maybe we have a side business or we volunteer. We have a lot of responsibilities to juggle. And we feel that we need to reward ourselves.
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I have definitely experienced that! But then I realized that what I’m really telling myself is that I deserve to be stressed out over finances. That I deserve to have a credit card debt because I purchased something that I did not have the money for.
Let’s stop making our financial decisions based on our feelings and and start making them based on our actual needs.
#4: Not Having a Budget
And the reason we really don’t think about what we can afford and what we cannot is because we often don’t know. And that is the fourth pitfall when it comes to management of finances.
We don’t have a budget! We don’t sit down every week or month to really look at the amount of money coming in and the amount going out. We don’t think plan ahead how we want to spend our money. And consequently what we can and cannot afford.
If you are in that place right now, I encourage you to sit down and create a budget for yourself. If you do not know where to start, there are a lot of different resources online that are completely free. You can find free printables on Pinterest or you can use free apps like Mint or EveryDollar. Or you can create your own spreadsheet.
#5: Not Sticking to the Budget
The next pitfall when it comes to the management of finances is not sticking to the budget. This is something I am working on right now. I’m very good at creating the budget but I have to be more conscious when it comes to spending the money so I don’t go over the budget.
For me the area where I tend to overspend is my grocery and household budget. However, I must say that simply being aware of my pitfall is helping me already. I know that I have to watch myself when I go grocery shopping! If I did not have a budget, I would not know that about myself. At least now I can work on improving myself.
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#6: Living in the Moment vs. Having Financial Goals
The next common pitfall when it comes to the management of finances is living in the moment and not having concrete financial goals for the future. As I said before, because we have a lot on our plates, the finances often fall on the back burner.
In general, I believe that as parents we are doing a much better job about planning for the future of our kids – such as college funds. But when it comes to planning for ourselves, such as retirement funds, we often fail. But guess what? If you do not have the financial means to support yourself when you retire you will either have to go back to work or rely on your kids to support you.
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And I don’t think that is the way you want your retirement to look like.
We want to make sure that we are thinking about our future and the future of our kids. If you are working for someone else, make sure that you are taking advantage of all the retirement benefits your employer offers. If you work for yourself, look into your options as well.
Our kids going to college and us retireing seems so far away in the future that we tend to push this off as something to think about later. But it will be here before we know it.
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#7: Not Being on the Same Page with your Husband
We cannot finish the discussion of common financial pitfalls without talkingabout this big one! It is not being on the same page with your spouse when it comes to finances. Maybe one of you is planning ahead and is all about budgets and savings but the other one has no interest in those things. Or maybe one of you is saving money before making any big purchase while the other is using credit cards for everything.
Like I said at the beginning of this video, money is one of the main reasons for marriage problems in US. The topic of finances is not fun. So we often ignore it and hope for the best. So if you have some concerns in this area it’s best to start talking about right away. Before the problem gets so big that it will lead to arguments and frustration on both sides.
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What are some other financial pitfalls that you have noticed in our society or have experiences yourself?
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11 thoughts on “Financial Pitfalls of a Working Mom”
Argh, a budget. I know I should, but I always shy away from them! And I do probably allow myself too many treats, even though they are little things like coffee and cake. Must be more disciplined! Xx
I totally get the coffee treat! Mine was getting a bit out of hand – I finally got myself an espresso machine and that was the best investment ever 🙂
Sadly, I fall into a few of these pitfalls. But knowledge is power; so thank you! I will be making necessary changes in my financial decisions, for the good of my future.
I’m pretty good with budgets but occasionally I have a month where I ignore it all and overspend!
Ha! I think we all have those months/weeks from time to time 🙂
This post made a lot of sense to me. You’ve certainly made me think about how I spend my money!
I’m glad to hear you found it helpful 🙂
I’m not too bad with budgeting. I save for what I need, get it, then start saving again!
That is awesome! For me, that is definitely work in progress!
I’m definitely guilty of the ‘I’ve worked hard so I deserve a little treat!’ but I think that’s ok every now and but definitely it would be a pitfall if it was a regular occurrence.
Yes! I feel the same way. It’s fine to treat yourself! But if we make a habit of spending a lot of money that we don’t have – that is when we get in financial trouble.