We all have friends who have shopped themselves into terrifying debt. Successful businesswomen who despite their generous salaries, end up borrowing money to pay the bills. Shoe racks full of Louboutins, shelves stuffed with cashmere — but absolutely no financial security.
On the other side of the spend/save spectrum, there are women who would never dream of spending their hard earned money on handbags — or anything else. They account for every penny and deny themselves even the smallest luxuries. They are incapable of enjoying the money they work so hard for.
So, it seems very realistic to say that there are millions of women trapped in a dysfunctional relationship — not with a man, but with their money.
Experts say the way we spend, save and invest is often dictated by deep-seated psychological issues relating to self-worth, security and status. Eight out of ten women admit they spend when they are miserable, they hit the stores to compensate for something lacking in their life.
On the other hand, using money as a security blanket and living under a self-imposed austerity regime isn’t good either. Yes, it’s better than going broke, but it’s rooted in allowing negative emotions about money to gain the upper hand.
Women have a heavier emotional involvement with money than men, and we have more worries, fears and anxieties connected to our greenbacks.
The good news is that if we understand the role female psychology plays, we can have a much richer relationship with our money.
The secret is developing a relationship with your money and working through the ‘Four Fs’ — fantasy, fear, focus and freedom:
Fantasy – The woman who fantasizes spends money she doesn’t have for a life she doesn’t lead. The red on the soles of her Louboutins is a perfect match for the colour of her bank statement. Fantasy spending locks women into a spiral of low self-worth and a cycle of competition over who has the best dress or bag. ‘Money is used as a weapon in the female wars, but you are bound to lose,’ says Gina Miller. ‘You are judging yourself and other women on superficial and materialistic values.’
Fear – is a powerful force in women’s relationship with their finances. Money fears loom large in the lives of the save-orexics. These divas of thrift are afraid that the least indulgence will send their finances out of control. They refuse to take the slightest risk, even though their anxiety prevents them making the most of their money. ‘Women have less confidence in their financial expertise than men, but if they can get beyond their fear, they are often better at investing because they take a more long-term view,’ says Emily Haisley, a behavioural finance specialist at Barclays Bank.
Focus – is critical if you want to use your money to meet your needs in the long term.Too many of us are living for today and focused only on this weekend, not 30 years from now.’
Freedom – does not equate to having money coming out of your ears — it’s about shedding negative emotions, leaving you free to make choices that enrich your life.
Freedom brings power. It turns women from victims who allow themselves to be manipulated by money into the ones in charge.
Financial freedom is about using your money in line with your values. Men’s belief about money is that they really are worth it. Women have negative emotions about money: we think we are not worth it. But we are.’