Personal Finance for Women :: Directions For Women

Personal Finance for Women

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 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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‘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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my first money club

by Carol Lee Roberts, CFP®, CDFA

October 27th, 2011

I recently moved to the Baltimore area and was interested in building a financial planning practice targeting women. But to be honest, I had very few ideas how to do this. Unfortunately I was not aware of the resources available at Directions for Women at the time.

I began doing some internet searches and talking to planners that I knew. Almost everyone agreed that there was a definite need for women-focused planning and also agreed that they would not know where to begin. I finally stumbled across the Woman’s Institute for Financial Education and from there visited Money Clubs. Both sites were helpful in reaffirming my belief that women were looking for a way to reach out to one another to discuss their financial concerns. And, the Money Club site also provided some ideas on how to structure the meetings and topics. This provided me a starting point, but I ended up personalizing the meetings and my approach. I was looking for something different from the Money Club structure and an approach that was unique to both the women invited and me.

Our first meeting was held in the office conference room and I served beverages and a selection of cookies. I am not sure who was more nervous, the ladies invited or me. We all took a deep breath and decided we would hope for the best and discuss finances – out loud and with strangers. We started with simple introductions, who we were and what we hoped to get out of the meetings. It was almost immediately a lively conversation with relative strangers opening up like old friends. I remember one participant saying that she hoped I would start another group soon because she had friends that could benefit from these types of conversations. I suggested she bring her friends to the next meeting and she laughed and explained she would never discuss money in front of her friends or neighbors.

Let me take a minute to explain the makeup of our little group. We have a variety of ages from late twenties to retirement. Everyone has worked outside of the home although some have not been the primary wage earner. We have single, married, divorced, widowed, childless, mothers, grandmothers and every stage of life and wealth accumulation you can imagine. And we are a group of about ten. I believe the diversity of the group adds to the richness of the conversations. At that first meeting, I asked for suggestions of topics that the group would like to tackle in our monthly meetings.

So far, we have had a meeting dedicated to retirement planning and a discussion of the variety of retirement planning vehicles that are available. We invited an expert on reverse mortgages to come and talk to the group and answer our questions. A local estate planning attorney came to one meeting to explain the importance of wills, trusts and answer questions about wills and probate. Next month we are having a personal organizer come in to give up some tips on ways to organize our important documents and home offices.

Looking back on the last six months, I can see a lot of ways that I could have improved on our initial meetings. And I echo the suggestion that having the participants take ownership of the topics and meetings would make the experience more fulfilling for all concerns. And, I appreciate the patience and willingness of my first group of guinea pigs to embark on this curious adventure with me.

But I think the most important thing I have learned to date is that each meeting of this group enriches me far more than it possibly benefits them. This monthly meeting has been an important first step to teach me how to change the conversation about money for my women clients.

I sincerely believe the entire experience would have been better for all if I were more prepared and not “winging” it. The importance of knowing how to make it a comfortable experience for all, when to talk and when to respect the silence, how to make a circle. I intend to start another group now that I have returned to Chicago, but before I do, I am going to participate in the Directions webinar series on Circle Training.

For more information about Carol Lee, you can email her: cleeroberts@sbcglobal.net.

Categories Financial Confidence, Personal Finance for Women
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the double taboo: money and death

by Dr. Mary Gresham

September 29th, 2011

It is hard to have an open, contained conversation about money that includes emotions and does not end up in a difficult interaction. This is a learned skill for most of us. It is even harder to have an open and contained discussion about money and death. Whether you want to know what is in your parents’ estates and how they plan to distribute or you want to deal with your own estate issues with your grown children, people in general are reluctant to address these topics.

The adults who are hesitant to ask information of their parents are afraid of being seen as greedy, in competition with their siblings or even of anticipating their parents’ deaths. This kind of avoidance generates anxiety and worry, often for years as they secretly wonder about the estate issues or dread dealing with their siblings.

It will take some courage and some skill to initiate this conversation but it could easily be that your parents are afraid to bring it up and would appreciate your initiating this conversation. It also helps to begin “softly” and with open ended questions such as “What you would most like to have happen in our family when you are at the end of your life?” ” How can all of us help you with that?” If your parent is in denial and will not discuss the topic, approach this indirectly by telling stories of your friends and their parents.

Parents tend to be blissfully unaware of the possibilities of sibling wars when they make inheritance decisions on their own and keep them private. The best outcome for your whole family may be to tell your adult children about your decisions and let them express their opinions and have some input as well. Emotions that truly should be part of the parent relationship can often be acted out on the siblings after the parents are deceased.

What gets in the way of parents calling a family meeting and reviewing estate concerns? Many do not know that it is important to do and it never occurs to them. Many parents perceive the assets to belong only to them and thus they have complete freedom to do as they wish. This ignores the next generation’s feelings that the assets belong to the whole family. In addition, as parents approach the last stage of their lives, they do not want to risk having a child upset with them or alienated from them and believe that keeping inheritance terms secret will preserve their own relationship with their children.

Best practices in today’s modern family include an open family meeting about the future process that the children will go through, some input from them and an open discussion of why certain choices seem desirable and the contained expression of feelings about this.

For more information about Dr. Gresham’s work on issues related to inheritance, money management, and family values, click here to visit her website.

Categories Personal Finance for Women
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Credit Card Strategy – 101

by Claire Emory, CFP®, CFA®, MBA

August 23rd, 2011

How high is your household debt ceiling?

It’s been hard to avoid reading about the ever-increasing size of the federal deficit and various ideas about what to do about it. Most of us don’t have any direct influence over decisions made in Washington, but what about our own personal spending and the height of our household debt ceiling? This kind of spending we can control, and when we recognize a problem, we can choose our response.

Of course, overspending is closely tied to credit card debt. The level of credit card debt in the United States has actually decreased during the past few years of financial crisis and sluggish recovery. But credit cards still play an enormous role in the financial life of most households. According to a Federal Reserve Bank survey, Americans hold almost 610 million credit cards, more than three per household. The typical American gets a first credit card at the age of 20, often while still in college, living at home, or not employed full time. The average credit card debt carried by households with a revolving balance currently is $14,750. In addition, of course, there is often a mortgage, auto, or student loan debt.

Good Debt versus Not-So-Good Debt

Debt is actually a double-edged sword: it can be either a positive or a negative influence on your financial well-being. Good debt includes sensible financing for a purchase that will outlast the duration of the loan and provide positive leverage in a way that gets you more bang for your buck. For instance, a home mortgage can allow you to enjoy your home (which should last longer than the term of the loan), allow you to build equity, and give you a mortgage interest income tax deduction. Likewise, a three-year auto loan for a fuel-efficient vehicle can provide positive leverage if you use it for employment and increased earning potential.

But what about using credit cards to pay for dinner out, or for a spur-of-the-moment Caribbean vacation, or a latte every morning on the way to the office? If you’ve been lugging a balance around for years while making only the minimum payment, you might want to think about where your choices are leading you. Now that issuers are required to disclose the long-term effects of making only the minimum payment, it’s a lot harder for those of us with spending issues to pretend we’re not aware of what we’re doing. It can be more than a little sobering to see just how much our fleeting pleasures are going to cost us down the road if we fail to adjust our habits.

Controlling Spending

If you’re living in a household that perpetually carries a credit card balance or you sometimes feel you’re at risk of heading in that direction, what are some ways to patch the cracks in your financial foundation and improve your peace of mind going forward?

Focus on savings. Setting money aside upfront to use for a vacation or other desired discretionary purchase can help reduce the temptation to use credit card financing to give yourself the reward you feel you deserve. Watching the vacation or other fund accumulate can bring its own satisfaction.

Use cash. More than one study has shown that consumers who use a credit card buy more than those who use cash. Give yourself an allotment of cash to spend each week and see how clever you can be in maximizing the value you receive for that amount.

Pay off the highest rates first. Make a list of your credit card debts and the corresponding interest rates. Focus your strategy on paying as much as possible toward the balance with the highest rate while making the minimum payments on the others.

Track the small stuff. Keep receipts for every expense or a journal of the amounts you spend on discretionary purchases. It’s hard to cut back, and easy to deceive yourself, if you don’t know exactly where your money goes.

Share responsibility. Knowing that money stress hurts marriages and other partnerships, sit down together to set a spending strategy. Teach children the rewards of sound financial habits (the Money Savvy Generation website, www.msgen.com, has great resources such as the Money Savvy Pig for youngsters and the Cash Cache for teenagers as well as materials for parents and teachers).

Freeze the cards. If you can’t bear to cut up your credit cards but still need a serious change, freeze the cards in a block of ice. You know they’re there if you really need them, but you can only use them with foresight and planning.

Don’t let dysfunctional spending get a grip on your household. If consumer debt is using you rather than the other way around, say “no” to the plastic and reward yourself with financial peace of mind.

Click here to learn more about Claire Emory.

Categories Personal Finance for Women
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rich harvest from “under the trees”

by Eleanor Blayney

July 4th, 2011

-Directions held its first Under the Trees conference call with approximately 30 advisors on June 29. We were piloting a new conference call platform called MaestroConference which allows participants to convene virtually in a main conference “room,” then breakout into separate discussions of their choosing.

We believe this technology permits us, as advisors, to practice what we are promoting in our interactions with women clients: namely, creating an open, interactive conversation into which each participant can bring the most important issues on her mind.

Prior to the call, we asked participants to send us the topics they wished to discuss with others in the Directions community. These were the topics nominated:

Prospecting and “closing the loop” with women clients
How to provide educational content to women
What can we do together as a Directions community to help us individually in our work with women?
What are the generational differences we observe in our women clients?
How to use social media in outreach to women

Elizabeth Jetton was our facilitator for the call, and set out the suggested parameters for the break-out room discussions, including choosing a scribe for each room to take notes. Participants then “raised” their hands to indicate the discussion they wished to participate in. Topic 1, on prospecting and closing, attracted the majority of participants; accordingly the discussion was broken down into sub-groups. There was only one taker for the social media discussion, so this participant was asked to join another room. It was, however, acknowledged that social media is an important topic, as it is being used in increasing numbers by women, but poses compliance challenges to advisors. Directions is planning to host an advisor webinar on this subject.

After spending approximately 25 minutes in the discussions, participants then returned to the main conference room, where the scribes summarized their discussions. Here is the full harvest of ideas, suggestions, and comments that came out of the conversations:

Topic: How to find women prospects and close the loop

“We dove right into the heart of the issue – how do you get a prospect to take the next step? We all felt we could get the prospects in front of us, we need a process, comment, nudge to help them to commit or at least get off the fence.”

“It was acknowledged that closing the loop with women clients is difficult because they are so busy with careers and families. Many have the will, but just can’t seem to follow through. The discussion then turned to prospecting ideas.”

“We all realize that we do know much more than people who are not in this field. The concepts that may seem simple to us can be very helpful to these groups; in other words, our presentations probably do not need to be very elaborate.”

“Questions were raised on how to reach affluent women, and how to extend our reach geographically.”

“The following efforts have been tried by various members of the group with varying degrees of success.

1. Joining NAWBO (Nat’l Association of Women Business Owners) and networking with other members. Distribute flyers to members inviting them to circle groups. Good feedback. Participants have come with questions they need answered. Discussion has then tended to focus around these questions.

2. Monthly circle group conversations at a local restaurant (separate private room). Invitations sent to personal friends and COIs. Uses EventBrite for registrations and reminders.

3. Circle group meeting at an establishment that offers yoga classes, massages, and sells related product.

4. Obtaining the CDFA certification – this helps to bring in clients who are needing help through this transition. Some become longer-term clients.

5. Connecting with women’s groups at church – these gatherings may get started when someone at church asks for financial education. A topic will arise that leads to a seminar or a series that she leads; participation is good because the participants are already in a space they consider safe.

6. Marketing to attorneys who practice collaborative law with women in divorce. Offer to act as the financial professional on the team. Attorneys can be found by searching the Collaborative Law Institute in your State.

7. After work Wine, Women and Wealth events. Unwind with a glass of wine and some munchies first, followed by a short presentation or fun exercise, and then circle conversation.

“Take-aways gleaned from the conversation were:

Continue the soft touches we currently do
Have a stronger conversation using the phrase that we feel we are doing you a disservice by not advising you in the proper direction. You are at great risk if some actions are not taken soon. Whether you choose our firm or another reliable advisor, the following issues need your attention.
We use a very soft touch approach – some people need more.
We talked about the need to be nurturing, particularly for women going through a difficult transition such as a divorce or the loss of a spouse. It’s important to create an environment in which women can feel comfortable expressing themselves and to allow them time to heal.

“It felt as though the discussion barely got started before we were asked to finish up. Next time you may want to consider giving a few more minutes to those Chatty Cathies of the group. ”

“Perhaps we could have divided our topic into two groups – one to discuss prospecting and the other to discuss closing the loop.”

Topic: Providing educational content to women

There were two participants in this discussion. One participant has

“been holding a monthly 1 1/4 hour breakfast meeting for women, open to the public, her clients, and her prospects. Over the last year she has had many folks become regulars–including a woman who drives 3 hours to get there! Coffee and muffins are served, the meeting starts with an ice breaker, and then she (or a guest) does a presentation (cash flow, debt management, estate planning, taxes, etc.) followed by a discussion where the attendees share their experiences around the topic.”

She then “blogs about the sessions, lists them on her website, mentions them during her weekly TV appearance, and works at social marketing–but still would like to reach more potential attendees. She has also had the interesting experience of one attendee bringing two other women to the meetings, both of whom have since become clients, but the original woman still has not!”

“We talked about ways to structure the sessions in line with Directions‘ belief that women need to become empowered before they can become engaged…primarily through more personal conversations amongst the attendees.”

Topic: What can we do as a community to help us individually?

We “discussed our efforts to bring women together for presentations or circles <and> expressed again the desire to have new, different kinds of templates for presentations and materials.”

“It’s hard to get women engaged. Circles focusing on empowerment, before providing education, are a good way to engage women.”

“We would like Directions-branded material, since many advisors are asked to speak to women’s groups.”

“Based on one participant’s experience of trying the circle, participants expressed more comfort and interest in how to do that. They would like help with the Invitation, so the Directions’ webinar series on Circles scheduled to begin in August will be well timed. Questions were asked about whether or not to focus on one particular age group or mix them up and how to get women inspired and engaged.”

“Very good conversation. The group agreed they would like to be able to continue the conversation.”

Topic: Generational differences among women

“One participant, herself a baby-boomer, observed that many women in this generation were involved in feminist movement, and fought for the freedoms (in workplace, etc.) that younger generations take more for granted.”

“There appears to be less gender stereotyping about money management roles among younger women.”

“But the work/childcare issue is still a major problem for younger women; they are still the primary caretakers. Hopefully, more workplace flexibility will make work/life balance easier.”

“What role do we have as advisors helping women understand the financial trade-offs involved in the choices they make about work and caretaking?”

The feedback we received after the call was quite positive, expressing the wish to have more such Under the Trees forums in the future. A quarterly Under the Trees call will be scheduled for Directions subscribers, but we also plan to have other, open calls for all those advisors interested in participating in discussions of interest to the Directions community.

Categories Personal Finance for Women
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putting the dollar sign in its place

by Eleanor Blayney

May 31st, 2011

I’ve never learned to speak or read Spanish, but I have always been intrigued by the way the language uses punctuation. In the case of questions or exclamations, the punctuation marks “?” and “!” are inserted, upside down, at the beginning of the sentence. You know right off the bat where the sentence is going, so there is no mistaking the tonal upbeat that should come with the end of the sentence.

In this age of instant messaging, texting, and email, we have lost the guidance of voice or gesture in our communications. All of us have a story of a good message gone bad — where we have sent a quick comment, meant humorously or ironically or benignly, which is completely misconstrued by the recipient. Without a facial expression, or the sound of a smile in our words, our readers are sometimes at a loss as to how to understand our meaning. Into the breach of vocal expression have jumped all sorts of emoticons, smiley and frowning faces, punctuation pictures and abbreviations. The meaning of a simple statement such as “I’m looking forward to seeing Mike tonight,” followed by a LOL, takes a complete 180 when instead you insert : < ( at the end.

There is, however, one sign in our language that provides no clue as to how we should feel about what follows. It’s the dollar sign. Neither upbeat nor downbeat, the $ is tonally neutral. Its only job is to identify a system of currency denomination. Boring…

Or is it? It’s said that nature abhors a vacuum, and so do our emotions. Few of us can resist loading up the money sign with all sorts of affective meanings never intended by this unpretentious symbol. We see the “$” as a good thing, an evil thing; a source of joy, power, status, acceptance; a prison of misery, greed, oppression.

The emotive power that we give to $ can literally stop us in our tracks, unable to move beyond it to what is really important. I, like many women I know, often fix on prices instead of attributes when I shop. The first (and sometimes the only) thing I look at is the $ on the price tag, failing to consider quality or what I really want or need.

It’s important to look at the emotions we bring to the $, so that we can ultimately look through the money to what we really value. In my case, I was raised by parents who were young adults during the Great Depression. Prices of goods were unstable and falling, so it was natural to look closely at costs: Today’s $5 item was likely to cost only $4.50 tomorrow.

I carried this sense of scarcity and extreme price sensitivity into my own adulthood, where it no longer served any useful purpose. My mother’s frugality looked like plain cheapness in me. The irony, however, is that one of my most closely held dreams is to become a philanthropist: sharing wealth with others who need money more than me.

A dollar sign may signal value, in currency terms, but nothing else. It has little to do with the priceless values that govern our lives. Too often, however, we get the two forms of value confused, compromising our principles for prices. For true financial confidence, we need put the $ in its place – as an abbreviation which by itself carries no emotional significance – and consider instead deeper questions of worth.

Categories Personal Finance for Women
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A New View of Value

by Eleanor Blayney

February 22nd, 2011

When was the last time you told yourself, “No, it’s too expensive”?

Some of us have banished this phrase from our vocabulary or say it in a voice so tiny, it cannot be heard over the loud beckon of something that we want. We don’t like telling ourselves “no,” with the result that the mental chatter in our head consists mostly of justifications for the “yes.”

For others of us, “too expensive” is an automatic barrier we erect to keep us from engaging fully with what the world has to offer. We don’t take the trip, go out for a nice dinner, buy the premium brand, or sit in the best seats, nor do we even let ourselves be tantalized by these luxuries. No mental small talk here. The price is too high – discussion over.

There is, of course, a vast middle range between the automatic self-indulgers and the knee-jerk self-deniers. It’s here where questions of value reside – where we have to do a bit of thinking as to whether a given expenditure is really worth it.

Actually, it can involve a lot of thinking. Value is an elusive and highly subjective concept, not to be confused with price. One woman’s trash can be another woman’s treasure, as any inveterate prowler of Saturday yard sales will attest. Taste, too, may play a part – if you don’t like caviar – you’re unlikely to appreciate, let alone pay the going rate for those exquisite, slimy eggs.

There may be as many different registers of value as there are individuals. Generally speaking, however, these registers fall in one of the following categories:

Affordability. In this case, we make our determination as to what we will pay based on what we CAN pay. While this approach has the merit of keeping us out of cash flow trouble, it discounts the importance of quality in our purchase decisions. The warning “you get what you pay for,” can be relevant here.
Cost/benefit analysis: MBAs and economists favor this approach to value, particularly when evaluating alternatives. The most valuable option will be the one with the most benefits per unit of cost. Sounds sophisticated and scientific, but benefits (as well as costs) can be highly subjective and emotional. Name brands use this subjectivity to their advantage. Branded products or services almost always cost more than generics, while offering virtually the same features. But when it comes to choosing a bottle of ketchup or aspirin, the thought that Heinz or Bayer was what “Mom always used” trumps the just-as-good generic every time.
External reference: Sometimes we decide what is valuable based on what others think, do, and spend. When we are teenagers, this shows up as “peer pressure” and is, unfortunately, very powerful. The problem is, however, not all of us grow out of this way of thinking. In its adult form, this is referred to as “keeping up with the Joneses.” Either way we are looking outside ourselves for our measures of value.
Internal reference or self-esteem: When we truly appreciate ourselves, in the sense of knowing ourselves and how we choose to live our lives, the question of monetary value becomes simple. We don’t need accounting or economics courses to know if the price is right, and we certainly don’t need advertisers or trend-setters to tell us what to buy, and for how much. We define value as whatever best honors us and sustains us. Our use of money – what we buy, save, or give – is not a source of shame or indecision, but a form of personal expression.

At Directions, we believe self-knowledge is the first, and perhaps most powerful, lesson of personal finance. This knowledge will not, of course, eliminate those occasions when we must tell ourselves “it’s too expensive” or “I can’t afford it.” But this self-talk is no longer about denial, but affirmation that we are making a choice that honors what is most important to us.

Categories Personal Finance for Women
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