A few years ago, I came across this book Worth It: Your Life, Your Money, Your Terms (I was reading the Chinese version). Out of curiosity, I glanced through it and found it worth reading. At the time, I was learning about investment and financial planning, and this book served as a simple and insightful guide. The author discusses the right financial mindset from a female perspective. Upon reading, I learned about two concepts: “Money Blindness” and “Money Aversion”. It resonated with me as I realized that these are common issues women tend to have. The following quote struck me:

Being angry, confused, or distant about your financial situation will only lead to more problems than facing it head-on.

Money Blindness and Money Aversion

In stereotypes, women are often considered to perform poorer in investment compared to men. Two common reasons are risk aversion and lower numerical sensitivity among women. However, these factors aren’t necessarily disadvantages. Risk aversion can help avoid excessive risk-taking and potential losses associated with high-risk investments. Good savings and investment habits don’t require advanced mathematical skills as well.

I’ve personally experienced both “Money Blindness” and “Money Aversion” when I was young.

I once had accumulated a few hundred dollars in credit card debt, and I chose to ignore it for several years, even though I had the means to repay it. This harmed my credit seviously and I almost screw up my home loan application. For some reason, I had a psychological aversion to facing this problem, which created a vicious cycle. Ignoring my finances led to not knowing where my money went and hindered my ability to plan and save to grow money.

Regarding “Money Aversion”, when I was younger, I believed discussing money was vulgar and associated it with negative traits like greed or materialism. I thought being assertive about money was a negative trait for women. I later realized how wrong this perception was. Money can also be linked to positive qualities like frugality, generosity, and freedom. Taking an objective and rational approach to money is the first step towards financial planning.

So, I started reflecting on my own money stories and became unreserved about discussing money topics. I began tracking my expenses, creating household budgets, calculating my net worth, learning basic investment knowledge, and developing healthy savings and investment habits. I’m still learning, and this year, I’ve gained a deep understanding of insurance, which I should have explored earlier.

Practical Recommendations

While this book is based on the American context, several recommendations and practices are universally applicable. Here are a few practical recommendations:

Understand your attitude towards money and analyze your investor type

After understanding your attitude towards money, you can change some poor money habits and choose suitable investment methods.

Overcome female investment disadvantages and actively participate in the market

Experiment with restraining excessive consumption

The book suggests some experiments to control excessive spending:

• Clear an unnecessary subscription from your credit card.
• Recall actual expenses from the past three days.
• Plan a zero-spending action for the weekend.

The book also recommends good credit card habits, which are worth considering.

Reference:

• Mindmap of the Book Reading Notes