Financial Wake-up Calls

I have to echo Maria here. In some important ways, the deck is stacked against women saving, so we have to be especially careful to cultivate good habits. We generally make less money than men, childbearing decisions impact our earning potential more than it does mens', and we're often in the position to be caregivers and not earners. I know needed to and I've tried to save since I was in high school, with little success. Between caring for an ill mother during the time I might otherwise have been in college, the low wages I made as a young woman, and the debt I incurred financing my own undergrad and professional degrees, I was not able to really start a retirement plan until this year. I'm 32, and have some time to catch up, but I'm single and in a traditionally female profession so I know I have to be extremely frugal in order to support myself in retirement. I'm glad I'm not dependant on a partner for my financial security, but I know I'm also in a vulnerable position with no back-up.

I don't know why financial literacy isn't taught in schools (it isn't here in Australia either). My parents taught me about budgetting and saving, and how to manage money on a basic level (ie, don't spend all you earn, put the savings in the bank). When it came to more complex investing, although I had a basic understanding of finance and money management, I had to educate myself.

I found a great magazine (which unfortunately is no longer published) called Australian Women's Money, that had feature articles on investment, buying property, superannuation (the Aussie 401K equivalent), and other money related articles. I loved this magazine since it was written in a way that was understandable and gave step-by-step advice on how to actually achieve financial goals (eg how to find the right mortgage or credit card for you; how to interpret data on the stockmarket). I have no doubt that there are a TON of books out there specifically aimed at women on finance & investing.

One thing I have noticed is that women have a hard time talking about money, and I don't really understand why. I don't know if it is because we are afraid of being judged/valued for what we earn/save, or if it is, as Maria suggests, an acknowledgement that the marriage could end/the fairy tale doesn't exist.

I think that financial knowledge and empowerment is probably one of the most important things you could pass on to your children.

Jules

BlogHer Contributing Editor, Australia, New Zealand & Oceania ( http://www.blogher.com/topic/world/australia-nz-oc... )
Dragongirl blog ( http://www.dragongirl76.blogspot.com )

It still made me shudder and cringe. You aren't poor, but you grew up poor and that's another subject entirely but one that plays a part in what you feel right now.

By the way, besides Monkey Trouble and Sassmonkey Reads - there IS a Sassymonkey Cooks. You really ought to add that to your signature block. 'Cause I like that blog.

~Denise
Daily Dose of Denise ( http://flamingohouse.blogs.com )

So it's like almost 1/4 less in USD. ;)

Expect an update with some more positive information sometime this weekend. I'm crunching numbers and have done some things in the last few days that will have a big impact on things in the long run. There'll still be a big number but a slightly more positive outlook.

But that big number is part of the reason why I'm having trouble escaping the "I'm poor" mentality. I'm not poor. I'm fairly well paid. I just owe a lot.

Monkey Trouble ( http://www.monkeytrouble.blogspot.com/ ) and Sassymonkey Reads ( http://monkeybooks.blogspot.com/ )

"How do you become a self-sustaining woman?"

I agree - this is such an important question but, I fear that many women think that to consider the question means to believe that love (and the fairy tale) don't exist. I know women who won't have their own checking accounts or any financial accounts in their name only when they are married because they think it means that it might be an acknowledgement that their marriage could end.

However, my friends and family that I mention in the post are sadly not unwilling to accept responsibility for their financial state. I brought it up (though I did not explain very clearly) to show that it's just that, compared to the single women or non-married partnered women (straight and gay) I know, the ability of the men to generally hold secure, stable, high paying jobs with benefits while the women go back to school, raise children, care for sick or dying parents, or hold lower paying, less stable jobs, has put the married women in a much better financial position.

Of course for the married women staying better off financially all depends upon them staying married. And, again that's just purely numbers on paper, not because they aren't smart or empowered. I think (again just my observation, I'd love to hear stories that prove me wrong) a big problem is that nobody, male or female, is really taught financial literacy early on, and that by the time you reach a point in your life that you wake up and start trying to take control it's late and that men have a better chance of falling in to a space that's better off than women (and women tend to further put off thinking about these issues if they are married.) It puts a greater burden on women to educate themselves at an earlier age and it's not a lesson we encourage in our culture.

I would love to see the stories of women like Jules shared with young women - I think she would be an incredible role model. But of course that brings up a whole other set of rants like why aren't young people taught even basic financial literacy in schools these days and the need to continue to teach and raise girls to believe in their own strength and empowerment... sigh.

Regarding your observation: "I don't know any women who could retire on their earnings and savings alone no matter how well educated, high powered and well paid they are."

Why do women lack empowerment when it comes to money? Liz Perle wrote a book, Money, A Memoir: Women, Emotions, and Cash ( http:// sittingprettyfinancially.blogspot.com/2006/02/women-emotions-and-cash.html ) and it offers "an unflinching look at how irrational a rational woman can be when it comes to money."

She also writes, "I had drunk the cultural Kool-Aid that told me that having a husband meant social and fiscal security and that I wouldn't have to deal with my own financial well-being."

How do you become a self-sustaining woman? The first step is to accept responsibility for your financial state and never become dependent on someone else. Unfortunately, many women are conditioned to think snagging a man is the extent of their financial plan.

Nina Smith at Sitting Pretty ( http://sittingprettyfinancially.blogspot.com/ )
Newport Beach, CA

I think your financial dislcosure on the blog scared me more than it scared you! Heart palpitations! Just thinking about it now, a few months later, makes me queasy. Oh wait, I was already queasy. Well, whatever, it still bugs me.

You've done really good stuff, monkey girl, and digital camera or not - I'm impressed.

~Denise
Daily Dose of Denise ( http://flamingohouse.blogs.com )

Yes, the power of compounding is quite magical. And your plan is impressive $2-3m AUD is substantially better than what the vast majority of American's - male or female - will ever achieve. Good on ya! as my former Aussie boss would say.

I wonder if we might not be better off here in the US if our government was as blunt with us about the need to fund our own retirements. And I think you are right about too many young women relying on the assumption that they don't have to think about being in charge of their finances on their own without a husband when, certainly in the US, at some point in their lives virtually all women will regardless if they marry or marry rich.

Congratulations on making such a big dent on the credit card debt and for taking action!

And, may I just say, "hitting the snooze button" - so clever, that totally escaped me. :-P

This is something that I have been thinking about a LOT since I started working, esp since our Govt here in Australia has basically told everyone in my generation (Gen X) and the Baby Boomers (my parents) that retirement will have to be self-funded.

I have a superannuation fund (similar to 401K in the US) that will fund the majority of my retirement. 10% of my salary each month goes into the fund from my employer, and I kick in extra each month as well (about an extra 3%). With the power of compounding interest (and provided the fund I've put my money into continues to perform reasonably well over the long-term), I will have between $A2m and $A3m by the time I retire. Plus investments in property and the stock market.

The idea of being old and living in poverty scares the hell out of me, and rather than waiting to see if I could marry rich (ha!), I started saving early.

I really do think that not enough young women think about their financial future early enough, always assuming that it will take care of itself or that they'll get married and have a husband to take care of it for them (although given current divorce rates, this seems rather naive).

Jules

BlogHer Contributing Editor, Australia, New Zealand & Oceania ( http://www.blogher.com/topic/world/australia-nz-oc... )
Dragongirl blog ( http://www.dragongirl76.blogspot.com )

Good question. I'm not entirely sure about when exactly my wake up call was. I think I had a lot of little signs and kept hitting the snooze button. One was when one of my university profs told me that he was planning to have $1 million socked away before retirement (he and his wife took a hit after 9/11 but they've recovered nicely and are on track again). I know that when I found out how much my student loan payments were going to be a month I didn't stop breathing. Instead I laughed until I cried cause it was half my monthly income (I got payments deferred on 3 of the 4 loans without penalty until I got a better paying job). Then I actually started reading personal finance books and literally had to let the information stew inside of me for about 6 months.

In December I finally added everything up and in January I disclosed how much I owed on my blog. That was scary but at the same time it meant that I was really serious about it. It's mostly student loans but there is some credit card debt in there too (about 6.25% of my over all debt in January). But now, and I haven't even blogged about this yet, I've more than cut my credit card debt by more than half and have one of my two credit cards totally paid off as of today! Woohoo! (I love income tax returns!) And if things go as I hope them to in the next month I plan to have almost 1/3 of the remaining credit card debt gone as well. And then I can start to seriously look at investing. (Or Denise if you are reading this - buying a digital camera, lol)

Monkey Trouble ( http://www.monkeytrouble.blogspot.com/ ) and Sassymonkey Reads ( http://monkeybooks.blogspot.com/ )