Do you get emotional about your makeup tools? Kitchen tools? Garden tools? No. So try thinking of your money like a tool. By treating money as a tool, you can reduce the tendency to make emotional financial decisions.
For more on using money as a tool and other topics, check out the Mind, Money, Motion podcasts.
- (Women’s Institute for Financial Education) “A man is not a financial plan.”
- Women’s Institute for a Secure Retirement
- Finish Rich
“Women’s Worth” by Eleanor Blayney
- Women see money as a lake (a finite resource) whereas men see money as a river (constantly renewing) hence the more conservative vs more aggressive investing approaches
- Women often have better investment returns because men tend to trade more frequently, are overconfident in their ability to beat the market, and frequently seek hot stock tips
- The biggest determinant of retirement success is living within your means aka reasonable spending
“The Behavior Gap” by Carl Richards
- Financial plans are worthless, but the process is vital as they force you to think about and take action on all areas of your financial life i.e. saving, taxes, investing, estate planning, insurance, and income/expenses.
- Nothing on CNBC matters, focus on your goals/values and what you can control.
- Investors rarely receive the rate of return reported on the funds that they hold because they make emotional decisions to buy and sell their funds (greed buy high and fear sell low, both the opposite of wise investment practices).
“Smart Women Finish Rich” by David Bach
- Put your money where your values are…think with your heart and your head. Remember that income is less important than your spending.
- Pay yourself first and buy less stuff.
- Focus on saving/investing in three buckets: security (1-2 years of spending needs), retirement, and dream wishes