Experienced mortgage advisor and founder of an award-winning mortgage broker MB Associates, Monica Bradley, reveals why women lack confidence in their money-managing skills and what they can do to get on top of their finances.

In my job I meet many people from all walks of life with vastly different attitudes to money. I have dealt with people who have spent freely, often incurring large credit card debts. At the other extreme, I have met people scared to spend any money whatsoever, even to the detriment of their relationships. It’s always fascinated me how attitudes can differ. I’ve also observed over the years that women tend to lack confidence in their financial skills. Yet in many cases, women are perfectly capable of managing their money. The inability to take control is often just an internal fear rather than a lack of skill.

Studies back this up. A survey published in The Independent in 2019 revealed that women are more financially responsible than men. They are more likely to set a budget and stick to it. However, women consider themselves to be more impulsive with their spending.

Some women can be reluctant to talk about money. A 2015 study from Fidelity Investments found that 80 per cent of women refrain from discussing money with friends and colleagues and only 47 per cent feel confident talking about finances with a professional.

A study by UBS showed that 63 per cent of millennial women in the UK still admit to deferring to their husbands or male partner regarding long-term financial decisions, with 85 per cent believing that their male partner knew more about investing. Just one fifth of women in the UK have investments, compared to 33 per cent of men.

The UBS survey found that only 41 per cent of women are financially confident, compared with 56 per cent of men. Yet 92 per cent of women said they want to learn more about financial planning.

So, with an appetite for learning, it is possible for women to take control of their finances and discover how to manage their money well. Once you take control of your spending, you will feel more empowered and in turn, more confident.

Whether you want to reduce the amount you spend every month or prepare a long-term financial plan, here are my top tips for managing your money:

• Applying for a mortgage? Shop around or talk to a broker. You may think you’ve spotted a competitive deal from a lender, but there may be other more attractive interest rates available. A reputable mortgage broker will have access to a range of lenders and mortgages. They will be able to access mortgage deals not always directly available to consumers. Finding the lowest possible interest rate for the duration of your mortgage could save you thousands of pounds in the long-term. So seek advice and don’t grab the first deal that sounds good.

• Make overpayments on your mortgage if you can. Even just an extra £50 to £100 per month can save you a considerable sum in the long-term, as you will be paying less interest.

• Review your mortgage every two to three years to see if you can get a better deal. If you are coming to the end of a fixed rate term, your lender will put you on its standard variable rate when the term ends, which is likely to be more than you’re currently paying. Allow at least three months to get a new mortgage in place.

• Look at remortgaging. This simply means moving your current mortgage to a new lender or taking out a new product with your current lender. It could save you money, even with any associated costs for early repayment. Talk to a reputable mortgage broker for advice and run the numbers to see if it’s worthwhile.

•  Review your spending habits. Be clear on what you are currently spending. Many people know what their mortgage payments and bills are every month but are less clear on what they spend on going out and general consumables.

• When it comes to spending, ask yourself three key questions before buy anything… can I afford it, do I need it, will I use it?

• Avoid emotional spending. A survey of more than 2000 people by app-based bank Atom showed that most of us have used shopping to feel better, yet 69 per cent of emotional spenders felt guilty afterwards. Don’t be tempted to make online purchases when you’re feeling emotional or when you’ve had a few glasses of wine. Shop when you’re feeling good.

• Plan for the unexpected. We often spend more than we intend to because unpredictable things arise, so have a contingency fund to avoid you having to go overdrawn or using a credit card. Cars break down, pets become sick – don’t get caught out. Have a little bit in reserve.

• Have a long-term financial strategy. Make sure you get good pension advice. Be clear on when you intend to pay off your mortgage and whether you will be selling your home to downsize when you are older. Your financial plans can change of course, but having a strategy is a good idea as it will encourage you to think about your long-term financial position.

• Finally, have financial protection in place so you’re covered if the worst happens. This can include critical illness cover – which pays out a tax-free lump sum if you’re diagnosed with a serious illness, and/or income protection, which pays out a regular sum every month if you can’t work due to injury or illness.

More information
For advice on mortgages and financial protection, get in touch with Monica Bradley on 020 8652 5240, email her at [email protected] or visit the website at https://www.mbassociates.net/

Submitted by Christina Neal