The Biggest Financial Mistake Women Make

The Biggest Financial MISTAKE Women Make @AdriansCrazyLif  Did you know that 60% of all older women end up living in poverty?  This is why.
I’m going to clue you in on the biggest mistake many women make in their financial lives. They depend on other people – typically their husbands or partners, but sometimes their parents also, to keep them financially safe.  We can’t help it – we are trusting people, and we like the thought that someone else is going to take care of us and we won’t have to worry about money ever again.  It’s a nice fairy tale, but many times, that’s exactly what it is.
I understand why we do that, I totally do, but I also get why that can bite you in the butt. Husbands might leave, or they die, or they could even become disabled and unable to provide for you and most importantly, your children. Parents die or become disabled, and sometimes are dependent upon YOU for their care. Have you checked the prices on nursing homes lately? It would scare the socks off of you.

In the event you do get divorced, did you know that a whopping 25%-40% of dads never pay a dime of child support, despite a court order? Not to wish anything bad on anyone, but if your husband announced he was leaving tomorrow to run off with his secretary or whatever, would you have enough assets under your own control to be able to support your family until child support or other arrangements could be set up?

What about retirement? If you’ve been married for a certain period of time, I believe you are entitled to 50% of any 401K’s or other retirement assets, but would that be enough? If you work, do you have your own 401K or Roth IRA set up? You really should, but a lot of women rationalize that they “don’t make enough”, or that their income needs to go for college or other expenses. That’s why such a high percentage of women retire in poverty in this country. We’re women and so we give and give to others our whole lives without taking consideration for what we might need for ourselves. But that poverty word, that sure doesn’t sound like a lot of fun, does it?

There are college loans, home improvement loans, car loans, and every other kind of loan, but the one loan they haven’t invented yet is a retirement loan. And statistically, that is the point in your life where your husband is much more likely to die before you will, so you may end up on your own. That is also the point where you are most likely to have health problems of your own and be unable to work. By then, your parents are likely to be gone, or in difficult straights of their own, so who is going to take care of you? Maybe your children, but you wouldn’t want that for them, and they are likely to be struggling to provide for their own families.

What is the message here? Well, for starters, think ahead and change your thinking. Don’t plan on always having your husband or your parents as a safety net. I’ve been lucky to have never been divorced, but I have lost both my parents and in-laws, so I’m learning how to live without the safety net and provide for my own security. I know I need to be prepared for that proverbial rainy day, and I’m working hard on it.

I save significant amounts of money out of every paycheck and I’ve had my own 401K since I was about 30 and I think I had an IRA even before that. We’ve both received small inheritances from our parents and I made sure that my portion is set up in a separate account under my own name. I’m not planning to get divorced, but just in case, that portion would not be considered joint property. Does that sound cold and calculating? Maybe, but that point was brought home to me very early on by my parents.

When I turned 21, I was living with a loser boyfriend. You know the type, couldn’t keep a job, sponged off his parents (and mine!), bought everything he could get approved for and then never paid the bills. I don’t know what I saw in him and fortunately, I broke up with him soon after, but my Mom, bless her heart, was looking out for me. She had my Dad give me $2,100 for my 21st birthday with specific instructions to keep that as a separate and secret emergency fund in case I ever decided to leave Mr. Loser. She wanted me to always have a little stash of cash for a rainy day. I held on to that account for years and years until my husband and I finally did have that rainy day when we were both unemployed and broker than broke and I was so happy to have that cushion available.  I think it’s just smart for a woman to have a little stash of her own for some kind of emergencies.

Even if you don’t work, it’s time to have a frank talk with your husband about emergency funds, savings plans, life insurance, and retirement accounts. He may not appreciate your nosing about in “his” money, but there may come a day when you’ll be glad you did.

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  1. It’s one of my biggest fears to end up in a situation when I’m completely dependent on someone else. I don’t want to feel trapped if things don’t work out as planned.

    • Oh me too! I would hate that. That’s why I do everything in my power to make sure I have a few options. I’m like a little squirrel, putting a few nuts here and a few there.

  2. Some great advice here. It is very important to have emergency funds for whatever reason. Unfortunately we don’t due circumstances. I know we really need to so it something I am working on. I am actually the bread winner in our house really and earn more then my Hubby. Have not children so haven’t got that added stress. It’s always good to be independent and be able to survive on your own. Although I know you can never say never but I really have no concerns about Hubby leaving me in the lurch if things went wrong, I think he would be worse off then me financially, I really don’t worry that he would screw me over, he is in the percentage of men who tried to do the right thing but got screwed over by his ex-wife! Bless him, I’m the one that keeps track of all the finances and have access to both accounts on line etc. He hasn’t got a clue how to access them etc. LOL! But aside from that we have no rainy day fund and we really should. How we have got away with it I don’t know because we have had many a tough time. I keep seeing posts about emergency funds, so it is on my radar and on top of my priority list!

    • You sound a lot like me. I’ve been the breadwinner since I was 27 and I do manage the money, although earlier this year, I handed over a few of the larger bills to him and told him he was going to be responsible for them. I just had too much on my plate and I was getting frustrated. I’m a big believer in emergency funds. I don’t think I could sleep at night if we didn’t have that little cushion. Just work it a bit at a time. I’ve been doing a lot of extra work on Fiverr – I earned about $400 last month, just doing little writing jobs for people.

  3. Great advice!

    I’m a SAHM now and refuse to let my husband touch my Roth IRA. I don’t have much in there, but it’s mine and I want it in case I need it. It’s important to me that I know all about our finances.

    I’m sharing this!

  4. You are so, so, right about this. My husband’s income definitely outweighs mine by a whole bunch. I have several friends who struggle as single moms because of low income and spotty child support, as well. Thank you for this “let’s get real” post.

  5. Carli,
    Wow that is alot of money. Hope you can collect someday.

    I had a loser boyfriend when I was young too. Since he wasn’t able to get a credit card, guess whose credit card we used. I also paid off the balance working two jobs and overtime for the next five years.

    Lesson learned though – learned to live beneath my means and to pick more responsible boyfriends.

    As to those who give too much (like my mom) there are many ways to pay for college, but only one way to pay for your retirement – out of your own pocket or earnings. According to Clark Howard most kids say (after parents helped them through college) “Gee Mom or Dad you should have saved more.”

  6. I get one point for my own 401K but that’s it. You are so right about everything. My ex owes over 60 K in child support. I’ve been lucky enough to have a supportive husband who helped me raise the kids as his own. What if I didn’t get that lucky and had to support the kids on my own? It was pretty darn hard until I met the hubs, that’s for sure. Great post!

  7. Now that was a swift kick in the butt! Even though it hurts to hear how vulnerable we really are, I’m glad you reminded me … I need to start saving for a rainy day. I run my own business but profit has taken 2nd place to the “creative” side of the business.
    A part of me wants to say “thanks but no thanks” for the reality check.
    I’m here from Blog Frog and I’m the parent of two teenage boys as well and the university fees are killing me!!!


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