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Women, Money, and Financial Independence with’s Jean Chatzky

Thirty years into her career as a financial journalist, HerMoney Media founder Jean Chatzy is still trying to figure money out.

“I learned on the job,” explained Chatzky during her Instagram Live chat with SoFi on May 20. As an English major out of school, she never imagined going into financial writing and covering personal finance on the Today Show for 25 years. “Nobody was born with this knowledge, and no one really teaches it in school,” Chatzky said.

That’s why she’s made it her mission to bring other women along for the ride. She founded HerMoney Media with the mission to cover the ways money and life intersect through articles, newsletters, and a weekly podcast.

In her discussion with SoFi Financial Planner Lauren Anastasio, Chatzky shared the importance of money management and financial independence for women.

Why Women and Finance?

For Chatzky, focusing on finance, specifically women’s finance, was an essential part of her mission for two reasons:

•  Women are starting from behind. Most of us know the well-worn statistics around the gender pay gap: Women, on average, make 82 cents to every dollar men make . Not only does that mean less money every paycheck, it means less money going into retirement, and because of the magic of compounding interest, the divide continues to widen . “We’ve got a steeper financial hill to climb,” explained Chatzky. In addition to a gap in wages, women are more likely to take time off for childcare or to care for ailing parents, times during which they are once again not saving for retirement. To top it all off, women live longer than men on average, Chatzky said, and they have to live off of less.

•  There needs to be more compassion in finance. As Chatzky learned and shared her knowledge, she noticed it going over best in a “judgment-free zone.” Women learn better with compassion, and once they have the information they typically invest better than men. “Women get in and we hold on,” said Chatzky. They stick to the plan, consistently invest, and don’t trade in and out, incurring fees. Women just need tools to start investing, and it’s done best without judgement through establishing an environment where women feel safe learning and sharing.

Jean’s “Big 5” of Personal Finance

Chatzky understands when she talks to women who feel like they’re always playing catch up with their finances, but it’s never too late to begin the journey towards financial independence. She shared her “Big 5” for women who are ready for long-term financial planning:

1.   Earn money. It might be obvious, but making money is where it all starts. A person can’t save money or find financial security without first earning some sort of income.

2.   Spend less than you make on a consistent basis. It might sound like a no-brainer, but many of us are struggling to save more than we spend each month. With more time home than ever, Chatzky recommended “spending a couple of months tracking money to see where it’s going.” Budgeters might not even know where their money goes each month. For instance, Americans on average have 21 subscription services . Taking time to put a lens on spending could yield places where a person can reign spending in. Then, when it comes to saving, budgeters should target to put away 15% of their income into saving and investing, said Chatzky.

3.   Invest what you’re not saving. Once someone sets up a proper emergency fund, they can start considering investing, said Chatzky. She stresses the importance of contributing the maximum to retirement savings and matchings before opening a brokerage account. Generally, Chatzky recommends this hierarchy when it comes to saving and investing:

◦  Start with 401(k) investments, and take full advantage of company matches.

◦  Pay off debt with a high-interest rate, such as credit card debt. The return on paying off this debt is equal to that of its interest rate.

◦  Consider investing in an HSA, if applicable, or start a 529 plan to start saving for a future child’s schooling tuition.

◦  When all of the above are taken care of, a person can start considering funneling discretionary income into a brokerage account for long term savings.

4.   Protect the world you’re building. This differs from person to person but could mean insurance or even estate planning. “No disaster should take it all away from you,” explained Chatzky.

5.   Find a way to give back that’s truly meaningful to you. “Nothing else will give your psyche that boost,” Chatzky said. Taking time to give back can transform the way someone sees money—and themselves.

How To Start Talking About Money

For many of us, budgeting, saving, and growing financially isn’t done on our own. However, there’s often a stigma associated with money, especially when exact numbers and amounts are brought up. It can be hard to start conversations about money.

To get the ball rolling, Chatzky recommended taking exact numbers out: “You can have a lot of conversations about money without that.”

When talking with a partner, women can start with a focus on the romantic side of money, advised Chatzky. Believe it or not, talking about goals and dreams is a conversation about money. Money and savings are a vehicle to our dreams, they help us get what we want. Couples can start talking about those dreams and goals first, then working backward to talk about how they’ll spend and save to get there.

But conversations can extend beyond just couples. Talking to a friend is a different type of conversation, Chatzky admitted, but she shared an old reporter’s tip, “You’ve got to give a little to get a little.”

People need to share their financial experiences and questions before they expect their friends to open up and do the same. “As soon as you lift the veil, other people will lift the veil too,” Chatzky said. When one person puts themselves out there, they take away fear the other person may have. Don’t be afraid to share investment strategies, questions, or how much student loan debt you have.

While these conversations might be hard starting out, they will get easier the more a person does it, said Chatzky.

Before starting the conversation, Chatzky recommended turning to trusted financial resources to learn more. “When it comes to your chosen resources, it’s all a matter of personal taste,” Chatzky said. People should feel free to pick two or three publications or personal finance writers that they can identify with. Following writers or publications a person likes will be more valuable long term than just following the markets, Chatzky said. Budgeters should follow people they enjoy and understand, instead of just numbers.

One silver lining of the COVID-19 situation is that money is front of mind for everyone right now, Chatzky said. “Now is the perfect time to start talking about money, since everybody’s talking about it already.”

Financial Planning With SoFi

Financial independence doesn’t always come easy, and aspiring budgeters are likely to have many questions along the way. Luckily, SoFi members don’t have to go at it alone. With SoFi, members get access to complimentary financial planners. Schedule an appointment today—visit the member benefits section of the SoFi app to get started.

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