Hey gals, here are the worst mistakes you're making with money

Ladies, we can be truly savvy with our dollars, especially when it comes to finding a great deal. Women are so good at managing money that 20% of Canadian spouses relied solely on their female partner to set and follow the household monthly budget, according to survey released in 2023 by Loans Canada, the nation’s first loan comparison platform.

However, even those of us accustomed to pinching pennies on a regular basis, can make a few key mistakes. To help, here are the five biggest mistakes women make with their money — ranked from not-such-a-big-deal to stop it right now!

Buying poor quality clothes

When most women are shopping on a budget, they end up with clothing that falls apart or shrinks after a few washes. Instead of buying throwaway fashion — trendy clothes at low prices — consider investing in a few pieces of high-quality closet ‘staples.’

Stores like Club Monaco, which was founded with the concept of offering "better basics," is a quality step-up from fast fasion, and one good option if you want a closet full of useful, wear-anywhere fashion staples.

Another option is second-hand clothing. Even when clothing is used, it still lasts longer than poorly made “fast fashion.” For those open to the idea of shopping and wearing second-hand clothing, can find great options either online or through brick-and-mortar stores that specialize in good quality second-hand clothing. For instance, websites like Poshmark offer high quality name brands at more accessible prices.

Change where you buy your clothes — and what you buy — and you could save hundreds of dollars in a year or two.

Not investing

The stock market is dominated by male investors. Hollywood portrays investing as a boy’s club fueled by adrenaline and testosterone, especially in movies like The Wolf of Wall Street.

But studies show that women who opt to invest in stocks and other equities tend to outperform men. The theory is that women are less reactive to market fluctuations, according to report from Fidelity Clearing Canada — and more apt to sticking with their financial plan and investing strategy. Another theory is that women are less prone to chasing market returns and more invested in stable, long-term strategies — an investment strategy often promoted by finance experts like Warren Buffett.

The good news is that you don’t need thousands of dollars and a broker to begin investing. Women can start trading using an online brokerage account. There are bank-offered brokerage accounts, such as CIBC Investor’s Edge, as well as fintech trading platforms, such as Wealthsimple and Questrade. The key is to find an online brokerage account that suits your needs.

If your aim is to launch a buy-and-hold investment strategy — and avoid the stress and fees of active trading — you’ll want an online trading platform with no- or low-cost trading fees.

Not maintaining a good credit score

Women tend to have worse credit scores than men, according to MSNBC. Men tend to have an average credit score of 630, while women average around 621. Credit scores range from low 500s to 900.

One easily-accessible option for building and maintaining a good credit score is to use a credit card. Used correctly, credit cards are great for building your credit history. However, when credit cards are maxed out, these short-term loan options hurt your budget and your credit score.

If you need to start building your credit history, consider applying for a credit card that caters to people with no- or low-credit scores.

If you need to rebuild your credit score — and part of the problem is a high credit card balance — consider finding a way to reduce the interest paid on this debt. For instance, using a low-interest credit card can help you reduce the interest charged on the outstanding balance. This reduces the amount of money you spend on interest and frees up cash that can be used to pay down the debt. Do this consistently — always making minimum monthly payments on all outstanding debts — and you’ll get out of debt faster and rebuild a robust credit score.

Falling for pyramid schemes

So many mothers are under pressure to ‘have it all.’ Work-at-home pyramid schemes — with people on the bottom making very little money — specifically target women who want to earn an income while raising their kids. The desire to do it all isn’t new and the schemes that prey on this desire are also not new, according to 2021 article published by the Huffington Post.

These companies know how to prey on women’s insecurities — including the idea that you must be popular to be valued and you must earn to have a say in household monetary matters. Don’t fall into this trap. Take the time to educate yourself about pyramid schemes. There’s nothing wrong with wanting it all but you will need to prioritize what’s important, right here, right now.

Undervaluing your skills

Women are still paid 9.2% less than men, on average, even if they have the same education and work experience, according to data released by Statistics Canada.

If you’ve been working for your company for a while, don’t be afraid to ask for a raise or to inquire if a promotion might be available.

Speaking up can be tough, especially if you sense that your boss doesn’t recognize your true value. If you find yourself stuck in a pay situation that probably won’t get any better, it may be time for you to look for new opportunities elsewhere.

— with files from Shannon Quinn and Leslie Kennedy