Women with Money

HerMoney: An Introduction

SEPTEMBER 2017

Seven of us, all women, are at the White Dog Cafe, a restaurant in a West Philadelphia row house. It’s a place more vertical than horizontal, the benefit of which is that there are more nooks and crannies than you get at airy, cavernous restaurants, which means more privacy, more space to really talk.

We are of varying ages and stages, a single woman in her 30s who just bought her first home, a married mom of two in her 40s, three divorced women in their 50s (one of whom is remarried), a two-time cancer survivor in her 60s who just left a forty-year career to embark on a new one, and a 23-year-old in her first job who tagged along with her mom. We are racially and educationally diverse; most have been to college, others through the school of life, and some have multiple or graduate degrees. At the moment, we all work, though some of us have dipped in and out of the workforce over the years to care for kids, for parents, and for ourselves. And most of us have never met before tonight.

That, as it turns out, is a good thing. Because the topic at hand is not one you might feel comfortable discussing with your closest friends. We have gathered—at my invitation, I should add—for the express purpose of talking about money. I know from past experience (this is not my first rodeo) that generating conversation about not the nuts and bolts of finances (best credit cards, mortgage rates, allowances) but about money itself is hard. People are reluctant. Even the women I know well who will talk about most things to a ready listener don’t want to talk about this.

So here’s what I’ve done: I made sure everyone I invited understood that this was the activity for the night. I made sure the wine—or beer or vodka, but let’s be honest, mostly wine—was flowing. And I decided to treat it like a party game. With the help of several of my female colleagues, I came up with about thirty questions designed to spark conversation. Questions like:

I printed them out in a font large enough and clear enough that none of us would have to reach for our reading glasses, cut them into little strips of paper, put them in a Ziploc bag, and stuck them in my tote. At the gathering—which I’ve since dubbed a HerMoney Happy Hour—we went around the circle. Everyone, including me, pulled a question or two. And we just started talking. And talking. And talking.

Think for a moment about what it feels like to embark on a romantic relationship after a dry spell. That first touch and your nerves start to tingle. That first kiss and you’re thirsty for, well, more.

That’s kind of what it feels like to sit in a room with other women—women who are like you and not like you, kind of like you and not at all like you—and start talking about your money. It’s exciting. It’s empowering. It’s a little bit scary. But if you start giving yourself over to the experience, the result is that you end up wanting more.

That, it turns out, is a very, very good thing.

A NEW PARADIGM

A decade ago, I wrote a best-seller called Make Money, Not Excuses. Wrapped in pink, it, like other female-focused books of its time (Prince Charming Isn’t Coming, SHOO, Jimmy Choo!) was aimed at convincing women that it was time to step up and take control of our finances.

We needed to do this because—at least for the foreseeable future—we were going to underearn men, take breaks from the workforce to care for kids and older parents that would put us behind when it came to saving for retirement, and outlive our spouses by an average of five years. That meant 90-plus percent of us would be responsible for handling our personal finances, well, personally. There was no getting around the fact that we would all be better off knowing how to manage our money before a crisis hit and we had to do it on the fly.

And readers loved it. It hit the New York Times and Wall Street Journal best-seller lists. Women discussed it at their book clubs. They passed it on to their friends and daughters. They kept their dog-eared copies at the ready for reference.

But things have changed. And not just a little bit. Today, women have more money—some have much more, as I’ll explain in the pages to come—and though there is no denying that we are undergoing an important shift in real time in many of the workplaces across the country, marching to the drumbeat of Time’s Up and #MeToo, many of us are finally also fighting for and sometimes achieving the power to go along with it.

What has also changed is what we want to do with our money and what we want it to do for us. More than ever before, we are mindful of the fact that we can, intentionally, use our financial resources to create the world we want to create—and not just for us, but for our spouses, our family and friends, and the causes we want to support.

Today, although women earners continue to lag male earners on average, there are many who have zoomed ahead. About 38 percent of American women have already become the higher earner or primary breadwinner for their families. But that’s not the only demographic change going on. More than 50 percent of women are single—and many will stay that way, making them de facto heads of households in their homes. Add them in, and the primary breadwinner number soars to 60 percent.

And there’s no stopping this train. For every 100 men who graduated from college last year, 132 women graduated. Those college degrees will drive increased earnings—increased power—for women. Already half of all millionaires are women. Women also are poised to inherit 70 percent of the $41 trillion in intergenerational wealth transfer expected over the next forty years. (It’s not that parents prefer their daughters to their sons, by the way, it’s that longer-living women will inherit twice—both from their parents and from their spouses.) Over time, the wealthiest age group in America—people age 65 and over—will continue to become more and more and more female as the population ages.

The astonishing result: by 2028, women will control 75 percent of discretionary spending around the world and by 2030, 66 percent of America’s wealth.

A HORSE OF A DIFFERENT COLOR

Yet to take all of this additional wealth and simply plunk it into the financial playbook that men have used for decades doesn’t work because we are different. We want to use our resources to accomplish different things. We want to measure our progress in different ways. My friend the best-selling author Jane Bryant Quinn once famously said, “Money isn’t pink or blue, it’s green.” She’s right of course. But my years of research and experience also tell me that we, as women, view money through a different sort of lens. And that is why we need a different sort of book.

First and foremost, for us, the life we want to create is the target, while money is the tool that helps us achieve it. For many men, it is the other way around.

And there are other marked differences:

We are more concerned than men are about both economic and political issues and are willing to selectively throw money at them to create change. We are more concerned than men about the financial situations—and stability—of both our children and our grandchildren and ensuring a college education is in the cards for them. We are more concerned about leaving a legacy for our families and communities and the world. We are more concerned about using our money to help others. And we are more concerned about using our money to help ourselves—to ensure that we create a guaranteed income stream that will last as long as we do so that we can knock that one humongous worry (seriously, it’s so huge that a study from Allianz revealed more people are worried about running out of money than they are of dying) off our lists.

There are major differences in the way we experience money, too: According to the American Psychological Association, women are more likely than men to already have a great deal of stress in our lives. Those stress levels are on the rise and likely to manifest in both physical and emotional symptoms. And what tops the list in terms of stressing us out? Yup. Money. And, although research has shown that—despite the annoying mansplainers who say otherwise—women are not more emotional overall than men, we do tend to feel negative emotions more strongly. Many of these emotions—in particular, guilt and shame, anxiousness and embarrassment—are deeply tied to our finances.

Add these things up, and it’s understandable that many of us don’t feel knowledgeable enough to run our financial lives with both confidence and conviction. Too many of us still prefer to sweep all things financial under the rug. Or, if we don’t prefer to do that, then we do it anyway for a multitude of other reasons.

The good news is: We are ready to turn the page on all of that. According to a recent survey from Fidelity Investments, 92 percent of us want to learn more about financial planning, and 83 percent want to get more involved in our investments.

Even our perspective on risk seems to have shifted. In years past, research showed women to be more reluctant than men when it came to taking risks with our investments. That hurt us, particularly when money stashed into low-earning bank accounts could have been earning stock market returns. What we are now seeing is that the more women know about our money, the more comfortable we are taking appropriate risks. In fact, when Merrill Lynch did a study that controlled for age and lifestyle goals, the risk-taking profiles of women and men were not much different at all. What’s more, 85 percent of women believe that the historical benefits of taking risk (i.e., that it’s something you need to do to stay ahead of taxes and inflation and to grow your money for the long term) are here to stay.

With all that in mind, I decided to take another bite at the apple. Women with Money: The Judgment-Free Guide to Creating the Joyful, Less Stressed, Purposeful (and, Yes, Rich) Life You Deserve is a manual for today. It’s based not just on detailed reporting with the world’s top economists, psychiatrists and psychologists, behaviorists, sociologists, financial planners, accountants, money coaches, and attorneys (a lifetime journalist can’t change her spots), but with hundreds of real women who spoke candidly about their lives, their frustrations and fears, their hopes and dreams.

It’s also deeply personal: for me. At the risk of revealing my age (okay, it’s 54), I’ve now been covering personal finance for a quarter century. When I took my first job in this field, at Smart Money magazine back in 1991, I told my soon-to-be-boss I didn’t want to spend my days sorting out the minutiae of 12b-1 fees.¹ He assured me that I could spend my days writing and reporting about people and their relationships with and interactions with money. And although I left that magazine long ago, I’ve kept his guidance close. What hasn’t changed is that I still believe that life is my topic. Money is the window through which I view it.

But in the last twenty-five years, I have changed personally. Life does that. I’ve had two kids. Gotten divorced. Lost my father. Remarried (and gained two more stepchildren, and now a daughter-in-law, in the process). Watched my mother remarry (and added three stepbrothers of my own). Worried as my children struggled. Cheered as they regained their footing. Teared up as they went off to college. Let the tears flow as one graduated and then moved across the country for work. Grew concerned as my mom and stepfather started dealing with the ailments that come with age.

I’ve also changed professionally. When you first met me, likely on the Today show shortly after my firstborn (now 24) turned 1, I was an employee. Today was my side gig. And while I wrote books and gave the occasional speech in my spare time, I also had a job. In an office. With benefits. About a decade ago, I became one of the more than six million Americans who start a small business each year. I hired my first employee. I shopped for health insurance and started a 401(k). Today, we’re still small but we’re growing. We launched a website called HerMoney.com. And I’ve proudly watched as the young reporters I hired out of college, taught, and mentored went on to Forbes, the Wall Street Journal, and NerdWallet and grew businesses (and families) of their own.

All of that combined experience has made me more conscious of the important role that money has played—and continues to play—in my own life. But, as a woman, it’s also made me more opinionated about the best ways to think about and interact with money in order to get it to produce the best results. Again, life—the life I want, you want, we want—is the target. There is absolutely no reason we shouldn’t have it. But we need a greater understanding of and comfort with money. Because money is the tool we use to bring it about.

So, that’s where this book is coming from. And this is the journey on which it’s going to take you:

First, we’ll take a guided tour of who we are in relation to our money. What we want from it. How our histories shape us (and how we can leave them behind if need be). Why money makes us so emotional and how it plays the role of an often uninvited third wheel in our relationships. We’ll come through Part I with a greater understanding of ourselves. That will enable us to take on the more tactical, practical challenges in Parts II and III with clearer eyes.

Next up, in Part II, we’ll look at managing our money to create the lives we want for ourselves. We’ll talk about increasing our earning power—getting paid what we deserve, starting businesses (or side hustles), and investing for the long term (and to make the impact you want in the world). We’ll take a dive into real estate. The security of having a place that is yours—and that is (eventually) paid for—is an important item on many of your financial checklists. We’ll get into how to make it happen and where it fits into your other financial priorities. And we’ll look at using our money in ways that bring us joy. This is not only allowed, it is encouraged.

Finally, in Part III, we look outside ourselves. (Yes, I know, we’re used to focusing on others before ourselves. You’ll note I flipped the script here. This is intentional.) We’ll focus on using our money to raise independent, confident kids (who actually launch) and send those kids to college. We’ll get into the issues involved in caring for our parents as they age. And we’ll wrap it up with a discussion of leaving a legacy—the imprint you want on the world.

WHAT I SAW AT THE REVOLUTION

Throughout, you’ll find yourself immersed in the stories, language, and experiences of the hundreds of women who opened up to me or one of my HerMoney colleagues by chatting with us on the phone, via e-mail, through social media, or in person with the purpose of informing this book. As we go through the chapters, you’ll meet them. I’ve changed most of their names, and, in a few instances, some identifying detail. But I didn’t change their words. I painstakingly transcribed hours of digital recordings to make sure I got them just right. Their words are their own.

As for my HerMoney Happy Hours,² the one I hosted in Philadelphia was just one of many such evenings (sometimes afternoons; mimosas and brunch work well, too). We’ve met in a home in Marin County, California, a hotel lobby in Nashville, a conference room in NYC, a restaurant outside Phoenix, and many other places. And each time, as we wound the conversation down, the reaction was largely the same: This felt different. This was special. As one woman in Marin put it, it felt revolutionary.

Which takes me back to that gathering at the White Dog in Philadelphia, where I drew the following question out of the bag:

We all do.

Let the revolution begin.