Eleanor Blayney :: Directions For Women

Eleanor Blayney

what does financial empowerment look like?

May 18th, 2012

There’s actually no single correct answer to that question. In fact, the answer is different for everyone. But we would like to help you begin envisioning what it will look like for you.

Our mission: to empower, educate and engage women around the topic of money.

Here are some ideas from the women at Directions:

I learn from my financial mistakes.
I know I will have enough because I am enough.
I am able to set and make progress toward financial goals.
I can talk about money with those I care about.
I know enough to make good financial decisions.
I know my value in the marketplace and can ask for it.
I understand that taking care of myself financially is just as important as taking care of others.
I spend money in a way that honors my values and responsibilities.
I may choose to delegate, but not abdicate, responsibility for managing my money.
When I have questions or fears about money, I speak up and get the support and answers I need.

Other ideas? What does being financially empowered mean to you? Let us know in the comment section below. Your shares will undoubtedly help others think about this important issue.

Looking for resources to help you get empowered? Visit our free resources by clicking here.

do women need financial “fix-its?”

by Eleanor Blayney

March 30th, 2012

There is a memorable Bob Newhart skit where he plays a psychiatrist meeting for the first time with a woman who nervously confesses her problems with claustrophobia, bulimia, and relationships. Newhart is not your classic Freudian shrink who stares into space, saying nothing. In fact, he actually has some advice for his client, which he summarizes in just two words:

“STOP IT!”

When the flabbergasted woman just stares at him, he drives his recommendation home by spelling it: “S-T-O-P new word I-T!!!”

Session over, mission accomplished, slam bam thank you ma’am.

Like all classic humor, the sketch is funny because it depicts a fundamental truth. When women ask for advice, they are often not asking for solutions but acceptance. And when men give advice, they focus on eliminating the problem, not analyzing its origins. How many times have you come home from a bad day, complaining about a workmate, a traffic snarl, an uncooperative team? Your husband or partner will listen for a minute and then feel compelled to fix it, as soon as possible. “You just gotta work around him/it/them,” he opines, grabbing for the remote. He sees the problem as solved, while you feel that he hasn’t heard a word you’ve said.

Financial planning can be a “fix-it” discipline, and as a CFP® practitioner, I’ve always enjoyed solving problems. And I’ll admit, there are some problems that seem to require a “STOP IT!” response. Spending too much? Not willing to take any investment risk? Putting off completing that questionnaire for the estate planning attorney? Just stop doing what you’re doing, and everything will be fine.

But the logic and simplicity of such advice has, to my knowledge, never changed behavior. It has, in fact, almost lost me two clients, one whom I told to stop spending money on eating out, the other whom I advised to stop buying shoes. Their flabbergasted response told me that I did not get it. I was advocating eliminating the tip of the iceberg, leaving the real and much greater issues submerged, threatening to sink their financial ship.

I certainly learned from those early mistakes, and now know that my job is to listen, deeply and thoughtfully, long before I offer advice. I’ve learned that women need to be heard, and accepted, before they need to be fixed. Often, they feel isolated with their financial issues, and need reassurance that others share their situation, that they are pretty average when it comes to their worries about money. In this way, they differ from men. She wants to know that she is “the same as” whereas he wants to know if he is “better than.”

When choosing a financial planner, you want, of course, experience and expertise. You want commitment to an ethical code of standards. But there is another “E” prerequisite you should be looking for: Empathy. On your first visit to interview a prospective advisor, who does most of the talking? Are you offered answers before you have posed all the questions? Do you leave the advisor’s office relieved because the interview is over, or because you have found a safe place to become more financially competent? When you return for a second visit, is it clear that the planner has reflected upon and digested all that you shared in your first meeting?

Sometimes we want professionals who are all business and completely focused on their skills. I, for instance, don’t want my attorney to be my pal. A bit of bedside manner works well in doctors, but if I get more than 10 minutes worth, I begin to feel uncomfortable. When it comes to money management, however, our emotional assets and liabilities are just as important as our financial inventory, and may have a greater impact on our ability to be financially successful than a six-figure 401(k).

Here’s some advice if you’re meeting with an advisor who does more talking than listening. Just tell him or her to “Stop It!” It’s your turn to speak.

For more information on the process of finding the right financial advisor for you, click here to read Eleanor’s article, How to Find a Financial Planner.

Categories Financial Confidence, Finding a financial planner, Personal Finance for Women
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what you really need to know about money

by Eleanor Blayney

February 21st, 2012

A domestic goddess I am not.

When I was someone’s employee, I would hire out for most household tasks — one, because I had the money, and two, because it was fun to be the “boss” in at least one area of my life. I did not admit that the real reason I had someone else do this stuff is because I really did not know how.

But now that I am self-employed, not nearly so well-paid, and painfully aware that I am the boss of no-one except myself, I am daily confronted with my lack of knowledge about all sorts of common things, both business and domestic. Printers and scanners confound me.

As do curtains. The windows in the guest bedroom have been naked for years, and it is finally getting to me, now that I work from home. I suppressed my urge to call my interior designer of yesteryear, and turned instead to Google as the ultimate font of wisdom. I read everything I could about how to install curtains and immediately and hopelessly got lost in the vocabulary: finials, grommets, hollow wall anchors, holdbacks, yikes! So I pointed myself toward Pottery Barn and bought whatever they said I needed. Installation is another matter altogether which may take another few years.

I can’t help but think that many women face the prospect of hiring financial advisors in much the same frame of mind as I face curtains. You know you probably need one, but have no good understanding of all that professional vocabulary. What’s the real difference between a CSA, a ChFC, a PFS, or a CFP®? But rather than spend time educating yourself, you go instead to someone calling himself an advisor, and nod your head at whatever he says you need. Implementation of the advice is another matter altogether.

Actually it is worse than that, since women’s need for financial advice is usually urgent, unlike bare windows which can safely be left for another few years, as long as I keep the bedroom door shut. In research done by the Certified Financial Planner Board of Standards (one of the credentialing organizations that issues the letters “CFP®” to qualifying professionals) it has been shown that a crisis is often what propels people into financial counseling. For women, this typically means a divorce, death of a spouse, aging parents, or a professional change.

But consider the consequences. The crisis that drives you to seek an advisor may also be one that completely unmoors you, mentally and emotionally. You are vulnerable – apt to be swayed by little things, like the fact that the advisor you like most is the one who keeps a box Kleenex in the conference room – as opposed to the big things, such as the advisor’s experience, education, and ethics. CFP Board research also shows that very few people do background checks on advisors, but instead go to whomever a family member or friend recommends.

As a financial advisor and consumer advocate, this really troubles me. In my twenty years of advisory practice, I can count on one hand the number of times I was asked about my professional credentials. People would hire me usually because they liked me. Now I am the first to admit that there must be emotional chemistry between an advisor and client, but it’s a good idea if likeable goes hand in hand with trustworthy. Bernie Madoff was reportedly a really nice guy…

For this reason, I recently wrote the “Consumer Guide to Financial Self Defense” which has been published and distributed by the CFP Board. It is intended to identify “red flags” that may signal trouble in a financial advisory engagement, as well as to educate consumers about the questions they should be asking. With consumers’ trust in financial experts falling to an all time low in the last few years, it’s time to help consumers understand what competence and trustworthiness should look like.

The Guide is just twenty pages, easily read, and downloadable from www.cfp.net. As the guide’s author, I unhumbly think it’s pretty good stuff. I’ve been asked, however, by reporters interested in the guide to pick two or three of the most important take-aways. So to accomodate word counts and readers short of time, I’ve distilled my advice to the following:

Trust, but always verify. Ask your advisor which organization(s) supervise his activities – the most likely are the SEC, FINRA, the CFP Board (if the advisor holds the CFP® marks) or some combination thereof. Follow up with these organizations to make sure there are no public disciplinary sanctions on the advisor’s record.
Ask your prospective advisor if he or she provides services as a fiduciary. This means the advisor must put your interests first, and fully disclose compensation and any conflicts of interest.
Make sure that you understand both the pros and cons of any investment or financial strategy that the advisor recommends. If you are only hearing the benefits, then you are not hearing the whole story.

Just these three tips can make you far savvier (and safer) than the vast majority of consumers of financial advisory services. How do I know this? Because as a former advisor myself, I am almost never asked for this information. I routinely supplied it, not because I was asked, but because I believed clients need to know.

Now if there were also a Consumer Guide to Decorating, all would be well in my world. No more useless trips to Pottery Barn where I come home with something I did not need or want…

If you’re looking for a financial advisor, we have some resources to help: How to Find a Financial Planner and Meet our Advisors.

This article was originally posted at http://www.WomensMedia.com.

Categories Finding a financial planner, Women and Finance
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love & money: codependent, independent, or interdependent?

by Eleanor Blayney

February 9th, 2012

I saw a cartoon some time back which showed a pie chart of a man’s brain. About 20% of the male brain is taken up with thoughts of work, another 20% goes to sports. There’s a small sliver for his car, and another for miscellaneous, leaving a full 60% that’s “preoccupied” (that’s the only word for it!) with sex.

It would be hard to render a similar cartoon for a woman. For one thing, we are notorious for multi-tasking, which is to say, we are able to think (and do) many things at once. Add up all the things we think about and tend to in a given day, and you get off-the-chart, superwoman numbers like 150% or 200%.

At the same time, we – like men – are often accused of having one-track minds. If they are guilty of thinking non-stop about sex, then our default setting would have to be on relationships, or if we are currently in one, THE Relationship.

Perhaps this is why love and money become so often a source of confusion and turmoil for us. When we’re quarreling about finances with our sweetie, there is often a subtext to our spats. He may be yelling about the overdrawn bank account – or perhaps you are doing the yelling – but in both cases, you are probably thinking he does not care about you or your feelings. In short, to a woman’s way of thinking, money troubles spell relationship troubles.

From here, it’s but a short step – which many women have taken – to identifying money with love. Having plenty of the first means having enough of the second. It is my firm conviction that “bag lady” fears, prevalent even among affluent women, are less about the possibility of running out of money than running out of love. What scares us most is that those shuffling, shapeless bag ladies are always alone.

Throughout most of history, women have had to rely on men for economic survival. We were responsible for making the meals and keeping the house, while men were responsible for providing them. Not all that long ago, women could not own assets in their own names: they were themselves the assets deeded to men via marriage, along with a few cows or linens thrown in for good measure.

Our economic environment has changed profoundly in the last forty years. Out of self-esteem as well as necessity, women have left the household cave in increasing numbers to club a few bison of their own. According to a recent survey by the Pew Research Center, approximately 22% of women now outearn their spouses, up from 4% in 1970.

This economic upheaval – or progress, depending on your point of view – has further complicated the intersection between love and money for many of us. Now that we have jobs and minds of our own, should our money be separate, too? What happens if he’s good at managing the money, and we’d prefer to be doing something else? What about those lingering, comfy feelings we get when someone takes care of us?

Our responses to these questions can run the psychological gamut, indicating at one extreme that we are financially “codependent” on our partners, to being completely financially separate at the other. Here, from my perspective as a financial planner, is what these states often look like:

Financial Codependence:
Sometimes my coupled women clients tell me that they work just fine with their significant others when it comes to money. A bit of probing often reveals, however, that this means that all financial control has been ceded to their partners. He not only handles the money, but does all the thinking about it, too. She calls this reliance “trust” which is fine, until it isn’t. A divorce, separation, or death can leave her financially, as well as emotionally, unmoored, not knowing where to turn or what to do.

Signs of unhealthy financial codependence can include:

Not knowing how your assets are titled
Having just a vague idea of what your net worth is, based primarily on what your partner tells you
Spending just as long as it takes to sign your name on your joint tax return
Asking your partner to find a financial advisor, and begging off some of the meetings with this advisor.

Financial Independence:
If a woman is working full-time, she likely has achieved some measure of financial independence, even if every bit of her salary is going into joint household accounts. This is because the benefits she acquires in the workplace – retirement plans, disability coverage, life insurance – will always be in her name only: they cannot, in other words, be titled with another individual. In the case of retirement plans, however, she may not have complete discretion about her choice of beneficiary; most non-IRA retirement plans require that a spouse be named as beneficiary, unless the spouse waives this right in writing.

Beyond this “automatic” separation of retirement assets and workplace benefits, a woman who has acquired assets before marriage may reasonably choose to keep these resources separate from her spouse, according her spouse the same independence with respect to his assets. For a woman who marries later in ife, or acquires stepchildren in the marriage, or has her own children from a previous union, this segregation of net worth is usually necessary to assure that her wealth is not transferred to the “wrong” beneficiaries, should she predecease her spouse.

It is possible, however, for a woman’s financial independence within a relationship to go too far. One instance is the private stash that a woman keeps hidden from her partner, when she is not actually planning to leave the relationship. There is, in fact, a new popular term for such secret stashes: “financial infidelity.”

Sometimes both partners take financial independence too far. I have worked with couples who attempt to maintain their financial autonomy by allocating every expense between them, usually based on a formula that reflects their unequal incomes. He makes twice as much as her, so he pays 2/3 of the mortgage from his checking account, while she writes a second check for 1/3 from hers. While logical and equitable, at least initially, this can result in tedious, not always friendly, end-of-month settlement sessions where money is being transferred between the spouses to settle the score. At tax time, they ask their accountant to prepare the tax returns as though they were filing singly and then use these calculations to determine what each is entitled to from the refund on their joint tax return. Perfectly fair, perhaps, but is the time and expense of keeping two books for the household really worth it?

Financial interdependence:
Between codependence and complete independence lies a healthy balance, namely financial interdependence. This results when couples establish shared goals and priorities, before they think about dividing assets and expenses. Joint accounts are then established to fund these goals, and each partner contributes to these accounts, ideally in an equal amount, and not necessarily based on relative ability to pay.

The couple also acknowledges that an economic union does exist, and that there are material benefits to such a union, as opposed to a simple and easily dismantled “shared overhead” arrangement. Both partners financially rely on one another, while also recognizing that at any time, each must be prepared to be financially responsible for his or her own self.

There can also be room within this interdependence to allow differences in financial styles. She’s a saver, and he’s a spender? Once the joint goals and household expenses are paid, and there’s any money left over, then it may be time for the couple to divvy up the remains and go their separate ways. She gets to save, and he gets to spend, without having to check in with the other about the use of extra money.

As a relationship expert might say — and this financial advisor would concur — there is nothing like a measure of separateness to make hearts, as well as finances, grow stronger.

An earlier version of this article was posted on WomensMedia.com.

Categories Financial Confidence, Women work
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what do you believe about money?

by Eleanor Blayney

January 31st, 2012

Understanding our beliefs about money is important because these in turn direct our behavior with money, which is perhaps the most significant factor in determining whether or not we become financially successful. We need to be aware that decisions about money often are not rational choices, but rather emotional responses born of early experience. To be financially successful, we have to make fewer irrational and impulsive decisions derived from emotional responses, and more rational and deliberate choices.

Both rational and irrational decisions can be subdivided into long-term and short-term ones. Possible financial choices can, therefore, be represented by the following Money Action Graph:

You have likely done this in your mind if you’ve ever bought a lottery ticket. Imagine a sum about five or six times your annual income (or what you think your annual income should be) and assume that I just handed you a tax-free check for that amount. Take no more than three minutes—first thoughts are important—to write down, in order of priority, six things you would do with the money. Try to set aside any ideas about what you should do. What do you want to do?

Your answers likely ranged from the sensible to the frivolous, from fulfilling long-term objectives to indulgent whims. Consider the very first thing on your list. Does this tell you something important about what you believe money is for?

There are generally four ways in which we use money:

Spending
Purchasing
Hoarding
Investing

Relating these uses to the Money Action Graph above, our new graph would look like this:

Let’s consider each of these activities and the kinds of beliefs that underlie them.

Spending. This word is often used in the context of buying everyday, inexpensive items without much forethought. Since women are often responsible for fulfilling the daily needs of a household, most of us engage in this activity when buying food or other necessities. However, we also spend as a form of recreation or entertainment. Have an afternoon free? Let’s go shopping! And off we go buying products and brands we did not even know we wanted until we were told we did by a multibillion-dollar marketing industry.

Purchasing. The activity of purchasing may seem similar to spending, but the formality of the word alerts us to a difference. We usually talk about purchasing when buying big or important things: homes, cars, or life insurance policies. I have never talked about purchasing a bag of Doritos. There is a deliberateness—an underlying rational process—that motivates purchasing.

Hoarding. Hoarding involves keeping something of perceived value for a very long time. It stands in contrast to spending in the sense that it involves holding onto something as opposed to letting it go. When we think of famous hoarders, George Eliot’s Silas Marner comes to mind. He was a greedy man fascinated with gold, a tangible form of wealth that seems even more concrete, solid, and safe than money.

Investing. Investing is a long-term use for money and requires careful, rational consideration. No doubt some investments are made impulsively, but arguably the investor in that case is more of a purchaser or even a spender, buying an attractive idea without careful review of what she is getting.

Using some real-life examples of what women do with their money, the more detailed Money Actions Graph might look like this:

This “Money Beliefs” exercise was excerpted from Eleanor Blayney’s book,
Women’s Worth – Finding Your Financial Confidence.

Categories Personal Finance for Women, Women Invest
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Top 5 Financial Mistakes of Women

by Eleanor Blayney

January 19th, 2012

In our work as Certified Financial Planners™, we have observed there are certain financial missteps that women are particularly apt to make. Take a look and see if any of the mistakes listed below have plagued you. Then be sure to check out our Mistake Erasers to help you get back on financial track.

You CAN erase all these mistakes. What are you waiting for?

1. We assume we do not know enough about finances.

Women are generally under-confident when it comes to making financial decisions, and as a result fail to take the steps needed to secure their financial futures. We often choose “safe” investments, rather than taking the necessary risks to ensure our money will grow for our longer life expectancies.

2. We let someone else – a spouse, a parent, a partner, an advisor – take care of everything for us.

This mistake is related to the first. If we think we are not good at finance, we may want someone else to do it for us. But finances are like health: you cannot have someone else keep you healthy, physically or financially. You have to be involved. Furthermore, most of us can expect to spend a significant part of our lives on our own, so we will need to be able to stand on our own two feet financially.

3. We put others’ needs ahead of our own.

Our care-taking “hormone” is what makes us great mothers, partners, and friends, but too often, we put our own financial security at risk to help someone we love. Examples include helping a boyfriend pay off debt, lending an irresponsible friend money, spending so much on expensive child care or schools that we cannot save for our own retirements. It’s no different from what you hear on the plane: You must put on your own “oxygen mask” first, so you are in a position to help others.

Everybody makes mistakes.

4. We do not ask for what we need financially.

Unlike their male counterparts, women are less likely to ask for the salary they deserve or flexible hours because they think they will not be liked if they assert themselves. We fail to ask questions about investing or other financial matters because we are afraid to appear stupid. Women need to put people-pleasing behaviors behind them, in order to get what they are worth and what they need to succeed.

5. We do not talk with our family or friends about money.

Women often think money gets in the way of close relationships, and do not talk to their partners or others close to them for fear of pushing them away. But this silence only compounds relationship problems and can lead to nasty surprises later on, such as learning that a spouse has terrible credit, or that a family member has not been properly insured. Start talking now about money issues, and keep talking regularly. Your financial security depends on honest communication with those you love.

Categories Women and Finance
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money musings from a marathon

by Eleanor Blayney

January 3rd, 2012

In October, I ran the Marine Corps Marathon in Washington, DC.

Call it a “runner’s high,” or chalk it up to trying to distract myself from my painful feet, but I spent much of those five-plus hours in deep philosophical thought. I thought about the courage of our military, as I studied the faces and dates of too-short lives emblazoned on the backs of so many runners. I thought about the dedication of the spectators, who not only waited for several chilly hours to catch a 10-second view of their runner, but also propelled 19,999 other runners to the finish with their motivating and humorous signs. My favorite: “26.2 miles? Because 26.3 would just be crazy!!”

Inevitably, I also thought about my work as a CFP® professional. I’ve always enjoyed helping clients help themselves when it comes to financial security, but during that run, I found myself needing my own advice. I realized that getting through a marathon is not all that different from successfully navigating the long-distance journey we call life. So here’s what Eleanor the financial planner told Eleanor the runner, as together we paced through the 26.2 (but not 26.3!) miles.

Both long and short-term goals are important:
There are times when the long-term goal – be it finishing a marathon or getting that retirement account adequately funded – just seems too distant or too overwhelming. I certainly felt that way at mile 18, and so, I expect, do younger adults trying to pay off debt and raise a family, or older Americans watching their stalled 401(k) balances in a stagnant economy. At times like these, it may be best to focus on more manageable short-term goals: getting the highest interest rate debt paid off, working for a year or two longer than you planned, keeping up the pace to the next water stop. Short-term progress has a way of accumulating into long-term success.

Expect – and plan for – setbacks.
From my vantage as a marathoner, these setbacks appeared as training injuries (bad knee, followed by sciatic pain), blistered feet on marathon day, and the potential for terrible weather. I prepared for these by extending my training to include downtime, carrying moleskin on my run, and not trying to be a hero. I told myself if it rained or snowed on race day (as it had the day before), I would wait till next year and try again. These same precautions, in the context of financial planning, translate to: starting your financial planning early, even before you think you need it; getting all the appropriate insurance coverage for your assets and income; and being prepared to revise your goals and strategies in the face of adverse circumstances.

Success is all about budgeting.
Only in a never-land of infinite energy and limitless resources is it possible to ignore the necessity of budgeting. For the rest of us – runners, couch potatoes, employees, retirees – we have to pay attention to the basic physics of what comes in and what goes out. If outflow exceeds inflow for too long a period, you will hit the proverbial wall. For the marathoner, this happens when she starts the course too fast, or fails to take in enough hydration and calories along the way. For those hoping one day to retire, or educate their kids, or leave a financial legacy, this happens when they spend everything as soon as they get it, or worse, spend it ahead of getting it. It’s extremely difficult, if not impossible, to recover from these situations. Unfortunately, no one was offering me an energy advance at mile 20, just as there are few commercial loans to help out-of-pocket retirees make it to the end of their lives.

It wasn’t until the finish of my run that I discovered the most powerful similarity of all between marathoning and financial planning: once you have done it, you’ll feel like a million dollars! Do the financial part, and you may in fact someday have that million dollars. It all begins with that first intentional step.

Excerpted from Eleanor Blayney’s guest blog for Financial Finesse.

Categories Financial Confidence, Women and Finance
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What is a Birthday Worth?

by Eleanor Blayney

December 16th, 2011

This is a reposting of one of our favorite blogs to date. Eleanor wrote it back in October of 2010, and since then she has celebrated her 60th by completing the Marine Corps Marathon (click here to read her post about her recent marathon experience.)

In November, I turn 59 ½. This is of absolutely no interest to anyone, except maybe to kids under the age of 10 who think half-birthdays are significant enough to merit another round of gifts. It might also catch the careful eye of a financial planner, who will tell me that on that day I can now dip into my retirement funds without paying a surcharge to the IRS for the privilege of spending my own money.

Oh, yes … and then there are the life insurance companies. They will take note of this otherwise ho-hum day, by rounding my age up half a notch for purposes of assessing me a fatter premium.

Actually, I myself am interested for more or less the same reason as the life insurers – for I, too, will greet 59 ½ as the beginning of turning 60. I intend to celebrate that BIG one by … what else? … training for and running a marathon. It’s just a matter of persuading my knees not to card me at the starting line and thus declining to serve me.

I don’t really relish turning 60, but I honestly cannot think of a better age to be at the moment. I love having so much time in my column – not time ahead certainly, but time behind me and all the experiences and lessons of the past. It makes me a wiser mother, a more loving friend, and a better storyteller. The degrees of separation between me and just about anyone else, at least here in the US, are down to just one or two. If I haven’t met you yet, I know someone who knows you, or someone who knows someone who knows you. If I have in fact met you, but don’t remember, I have a built-in chronological excuse we can both laugh about without my needing to apologize.

This is abundance. I am rich in experience, and each day, month, year adds to my stockpile. To be able to say this — in an economy where scarcity, loss, and promises of the same for the indefinite future are daily headlines — is pretty amazing to me.

I just spent two days with my good friends and colleagues doing some strategic planning for our business, Directions. It was the best business meeting I’ve ever been to in my professional career, as well as the most unusual. All of us are Certified Financial Planners, but we spent virtually no time on our balance sheet or income statement. The “Show Me the Money” mantra that is usually the touchstone of business strategic planning was entirely absent. We did not count revenues or itemize expenses; instead we took an inventory of our beliefs about women and their planning needs. We rejected the notion that our work is about women and money, and embraced the notion that we are concerned with women’s worth, which is a much larger concept that includes not just financial assets, but their intelligence, their experiences, communities, faiths, families, friends, work, and legacies. We agreed that our purpose is to help women (and the world) appreciate this worth – that it is indeed an asset that never goes into deficit, but grows in value over time.

So while my 59 ½, then 60^th birthday may indeed be momentous to the IRS, life insurers, AARP, and movie theaters wishing to entice me with their senior discounts, I expect to celebrate quietly for an entirely different reason. Never before has my worth been greater, and never after will it be any less.

Categories Women and confidence
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‘The Talk’ – discussing the financial facts of life

by Eleanor Blayney

November 28th, 2011

I recently wrote a Thanksgiving column for the CFP Board of Standards urging consumers to use the time we spend with our families to talk about finances. I suspect my advice was not very popular. “Stop being such an old stick,” readers probably thought. “Discussing money with my family is sure to ruin a perfectly good holiday…Anyways, it’s way too noisy at the mall to do much talking.”

To which I would answer: Not talking about money with your family, whether it’s during Thanksgiving or at some other point, is even surer to ruin many more holidays in the future. Failure to share key financial information and plans — such as the details about wills, living arrangements and health care coverage for later years, expectations or requirements for family help in the event of disaster – can cause huge upset and disagreement among family members when a crisis arrives. An open and frank discussion today can prevent years of family fracture tomorrow.

But like all good advice, this is easier said than done. Particularly for us women. So many of us grew up believing it’s not nice to talk about money. Or perhaps we don’t have the financial training to really understand what is being talked about. Some of us, quite frankly, just don’t have the time, given more immediate demands of young children and career tracks. And even if you completely get that it’s important to have the “talk,” how do you start the conversation without seeming to be nosy or greedy?

There is no one perfect script – how you begin will depend on the person you are talking to and the quality of the relationship. What you say to Mom and Dad is likely to be very different from what you bring up with your siblings, as may be the emotions you experience in these two conversations. Nevertheless, here are some ideas for launching these important topics as productively and peacefully as possible.

• Emphasize that you care about the other’s wellbeing. Explain that you are asking these questions or bringing up these subjects because you really want to know what the other person hopes for and needs in the way of financial security, so that you are better able to honor and respect their wishes.

• Acknowledge the importance of financial privacy and autonomy, even among family members, but point out the many ways a family is inevitably linked where money is concerned. When an individual dies, divorces, or remarries, there are necessary financial implications for the family, particularly if there are dependents to consider.

• Model the kind of response, in terms of openness and detail, that you hope to get by sharing your own information first. For example, you might say to your parents: “Mom and Dad, I want you know that I would like to provide for my children in the following ways in my estate documents, and it would be helpful to me in finalizing my planning if you were to share with me your own estate plans.”

• Honor your own boundaries and capabilities, as you share with others your financial plans, and learn of theirs. You might say to a sibling, for instance, that you cannot financially support your nieces and nephews if anything were to happen, even if you are willing to help raise them. You might tell a child in college that you are prepared to let them live at home after graduation, but only for a six-month period. Limits need to be established now; trying to impose them later in the midst of turmoil or disruption is almost impossible, and likely to be misunderstood.

• Where it is really difficult to talk calmly and clearly about financial matters, consider writing a letter instead. In this way, you get a second chance to edit yourself as you express your financial hopes and intentions, both for yourself and the other family member. You can also get questions asked that need answers, without veering off into disagreements weighted down with “old family baggage.” Explain your intentions for writing it down, you don’t want anyone thinking you are trying to begin an official paper trail.

• When all else fails, consider using a third-party as a neutral facilitator for a family conversation about money. A CFP® professional who offers personal financial planning would be a suitable expert to guide this conversation, having had extensive experience in helping clients through the big financial events of life. He or she will understand both sides of the family dialog, and can suggest ways to resolve money differences. A financial planner will also add an objective view of the financial issues under discussion.

There are a lot of situations in which “talk is cheap,” but not when it comes to families talking about money. I remember bringing up with my mother the touchy subject of “who would get what” when it came time to distribute her jewelry and prized possessions. If it had not been for that conversation, I truly believe that my older sister and I — lifelong arch rivals in all matters of materiality – would still not be speaking eighteen years after my mother’s death. It would have been a case of “I want that! It’s mine!” erupting word-for-word from both our mouths as we tried to divide my mother’s effects. But what in fact happened was far different. Remembering our family tête-à-tête, I was able to pick up my mother’s heirloom engagement ring and calmly hand it to the third and oldest sister.

We were all at peace because “it’s what Mom said she wanted…”

Categories Personal Finance for Women
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an advisor is like a great pair of shoes

by Eleanor Blayney

August 16th, 2011

"Like a great pair of shoes, the best advisory relationship has to fit without pinching, has to make you feel good and stand tall, and has to carry you exactly where you want to go."

For those of us considering hiring a financial advisor, there is a bit of mystery – and maybe even pressure – in finding “the one.” After all, the goal is for this engagement to become a long-term relationship that is successful in achieving your goals. The problem is we may not understand how to get the best results from a financial planning engagement, or what results we might reasonably expect.

At a Directions-led circle of financial advisors discussing our experiences with women clients, one participant summed it up as follows: “It seems my very best and my very worst clients are women.” Why are women so polarized on an advisor’s client list, taking up both the best and worst spots? We believe every woman has what it takes to be successful in her finances and in her relationship with an advisor.

So which clients enjoy the most mutually fulfilling relationships with their advisors? More importantly, how can you get the most out of your relationship with a financial planner or advisor?

Here’s what you’d hear from advisors themselves:

Become part of a winning team. Think about it, what does it take to win? Diligence. Clear goals. An understanding between teammates. Mutual respect. If you are one of the many women who tend to be prefer collaboration over working alone, you may be just the client an advisor is looking for.

Understand the true value a financial professional provides. If you are an inveterate bargain shopper who uses price as the primary criterion in a purchase decision, then you are likely to be either shocked by the fees for comprehensive planning and advice, or very disappointed when you get only what you are willing to pay for: ie., a service of little to no value. There are unfortunately no knock-offs when it comes to good financial advice, and the real value is oftentimes in avoiding costly, even ruinous mistakes, as opposed to getting a deal. There is value, too, in the accessibility of the advisor and the continuity of the advice over time.

Don’t mistake investment performance as a reliable indicator of an advisor’s value. How you feel about your finances when working with an advisor is a far better measure. A sense of confidence that the advisor is helping you to make good financial decisions, keeping you informed, and “has your back” in times of financial crisis is worth much more than an extra ½ percent of return over a benchmark.

You’re the boss – after all, it’s your money and financial life. But this doesn’t mean your advisor should do all the work, no matter how much you dislike anything to do with money. Some women hire advisors the way they might hire a cleaning person or lawn service: they don’t want to be there or get involved to get the work done. But good financial advisors are more like personal trainers or coaches than they are like contractors: they can help you get into and maintain financial fitness, but only if you participate. You must, in other words, show up! Show up for meetings. Speak up in those meetings, even if you are there with a partner who is the designated driver of your finances. Do the necessary homework, whether it’s finding important records, or following through on a referral to an attorney or insurance agent. Ask for the necessary context and explanations so you are able to understand the alternatives presented to you, rather than letting the advisor do whatever he or she thinks best. Just as you cannot delegate away the responsibility for your physical health, you cannot let someone else do all the work of keeping you financially healthy.

Speak up, early and often, about what you need from your advisor, what you want, what you like and don’t like, and how you want to be treated. Do you need more education in order to be involved in the decision-making? Ask for it. Do you want to be called before an investment transaction is made? Say so. Would you like to meet your advisor at your home, rather than at the office? Suggest this alternative. Do you find email messages overwhelming and annoying? Tell your advisor to phone you, and give the best times for doing so. In most cases, your advisor will be happy to accommodate you, if it makes for a better, more productive relationship. Whatever you do, don’t avoid bringing up a problem when it occurs. Advisors need and want that feedback on what makes for happy clients.

Be prepared for your meetings with your advisor, and try to keep them within a reasonable time frame. Make notes beforehand of what you wish to talk about, and read any materials or reports you have been sent ahead of time. Tell your advisor what you would like to focus on during the meeting, as opposed to making him or her guess what the best agenda will be. Decide with the advisor at the start of the meeting, or beforehand, how long the meeting should be, and keep to that timeline. It’s better to ask for a follow-up meeting, if needed, than to let the discussion go for too long.

There’s a matchmaker instinct in all of us: women love to put the right people together and watch good things happen. Ask your advisor what kinds of clients he or she likes to work with, and if possible, be a source of referrals to individuals who fit this profile. This kind of goodwill gesture is deeply appreciated by advisors, the best of whom are not marketers or sales people, but great consultants. You have a vested interest in your advisor’s professional success, since it means that he or she will be around to guide you for a long time.

But at the end of day, you must trust your woman’s intuition about the status and value of the advisory relationship. You may be doing everything you can to be a great client, but still not feeling appreciated or well-served. It’s time to move on, being sure to tell yourself it’s not you. Chalk it up to chemistry or style, but do not feel diminished. Like a great pair of shoes, the best advisory relationship has to fit without pinching, has to make you feel good and stand tall, and has to carry you exactly where you want to go.

Categories Finding a financial planner
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