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In this week’s Ten Money Questions, we speak with Nicole McInerney, the president of Dollars & Sense Education, a company that provides personal finance education in the workplace. Her company’s tag line is “Raising Your Financial IQ!” and her seminars help people become financially literate and self-sufficient. I asked her to share a few tips along with personal stories and her money philosophy. Enjoy!
1. Do you think women put too much emphasis on the emotional side of money when it comes to saving and investing?
I think women focus too much on the micro issues like clipping coupons and short term spending. They need to get a more macro view of wealth building. I know women who spend so much time bargain hunting that they could get a part time job with the time they spend looking for discounts and shop at Bloomingdales. Budgeting and saving are important skills but we as a gender have to learn how to put our money to work through investing.
I also think women are very risk averse. This is something that has served us well throughout our evolution but needs to change in the year 2007.
2. What is your most significant memory about money?
My most significant memory of money would have to be fairly recently when I bought my first investment property in 2003, a triplex in Philadelphia. I remember sitting at the closing table all by myself (with the exception of my realtor and the seller’s realtor) and thinking, “Okay, game on – what the hell am I doing?” That property was definitely a case of learning under fire but it was an incredible learning experience, it worked out for me and I have been able to grow my real estate investments as a result of taking a major monetary risk.
3. What is your worst habit around finances?
Hmm… auto bill pay and online checking are my saviors. I used to forget occasionally to send in my bills on time! I am a bit disorganized.
4. What mistakes do you see young career women making with their money? Give three tips that would get a twentysomething on track with her finances.
The biggest mistake that I see women make with their money is to not think about it at all!
1) The best thing a young woman can do is max out her 401K and/or IRA/Roth. As soon as you get a job start contributing AT LEAST up to what your company will match. If you start at your first paycheck you will never miss the money.
2) Do not go into debt to have a big wedding. This is VERY common here in the Northeast.
3) Live within or below your means - not above. No matter how much “stuff” you have, you will always want more. It is just human nature. Make a budget and stick to it. This doesn’t mean you have to deprive yourself. If you can afford to budget for $500 worth of new clothes a month and want to, but by all means do so but don’t deviate from your budget.
5. Do you think an MBA is worth the time and investment?
It depends. If my previous employer had not paid for my MBA at NYU Stern, I would not have attended. I always knew I wanted to do something entrepreneurial and would not have been able to break out on my own with large student loan debt from grad school.
I think an MBA is valuable if you want to switch careers and can get into a top tier B school. This can significantly improve your chances of breaking into certain highly competitive careers such as investment banking, trading, and the marketing departments of Fortune 1000 companies. Otherwise I would steer clear of B schools unless someone else is footing the bill such as an employer. They are a great place to learn a lot of information but unless you have certain goals such as the ones I mentioned, the return on investment doesn’t always make sense. If you are considering an MBA talk to alumni from the university you are attending first and gauge if the school will put you where you want to be.
That being said, my MBA was by far my favorite educational experience.
6. How has money played a role in your relationships, romantic or otherwise?
Oh boy. Well a young woman that has a strong grasp of finance can be somewhat intimidating to a lot of men. My experience has been either they get
