If you look to the left you’ll notice that our line-up has changed.  We’re thrilled that Emmy award winning journalist and former CNN business anchor, Valerie Coleman Morris, has joined the blogging team of The Thin Pink Line.  Valerie is dedicated to increasing financial literacy among women, people of color, and children.  She welcomes questions so be sure to ask yours in the comments section of her blogs, which begin next week.

TAGS: CNN, financial literacy, Valerie Coleman Morris, Women and Money

Fridays are usually reserved for financial tips, but today I want to share a different kind of money tip.  For many years when I was struggling financially people told me stories of how when they gave generously to organizations of their choice the money always came back to them multi-fold.  As soon as I had money to spare I began to identify causes that were important to me and made sure I gave as much as I could afford – sometimes even more than I could afford.  If it doesn’t hurt a little I don’t think I’m giving enough. And you know what?  From that time forward money has never been an issue for me. 

What made me think about this today was a meeting with a woman who sits on the board of MOSTE, an organization I founded 22 years ago and where I still volunteer time and each year donate money for scholarships.  I was the first to suggest giving scholarships to inner city girls who might not otherwise be able to attend college and said I would fund the first scholarship.  I don’t know exactly how or why it works, but each time I donate I’m surprised with a new contract or source of income I hadn’t expected.  I don’t give because I expect to get anything back, it just happens. 

Carol and I are board members on the Bloom Again Foundation and when I was going through the most recent donations someone had attached a “matching gift” form.  The woman’s donation would be matched by her employer.  Perhaps your company has a similar program.  If so, I’d like to ask you to consider donating to Bloom Again this holiday season and sending us a matching gifts form.  You can visit the website to learn more about how we empower women by providing financial assistance during times of difficult transition. 

If you’d like, we’ll give you holiday cards you can send to friends letting them know you made a donation to honor your relationship with them.  For each $10 donation we’ll send you one card that has a place to put your name as a donor.  As I told my friends and family, none of us needs one more “thing” but women in financial need could use our help, so I’m donating all the money I would normally spend on holiday gifts for everyone except the children in my life to Bloom Again.  Try it and see what happens.  If nothing else, you’ll know you made a difference.  100% of the proceeds from donations go toward grants to those in need.

TAGS: Women and Money, Women and Philanthropy

Now here’s a deal for you.  My book, Nice Girls Don’t Get Rich, was just released in paperback  so the publisher is looking to sell the hardcover (same content) at a deep discount.  The cover price is $21.95 but I’m passing my discount along to readers of The Thin Pink Line.  Your cost would be just $7.50 per book including shipping (in the United States). 

Now’s the time to brush up on your MQ (money quotient) and maybe even get some holiday gifts.  I’ll sign each book purchased so you’ll want to let me know if you’re buying the book for yourself or someone else.  Just send an e-mail to info@drloisfrankel.com and we’ll contact you with ordering information.  Quantities are limited so, as they say, act now.

TAGS: Get Rich, Money, nice girls don't get rich, Women and Money

College students are usually (and understandably) more concerned about debt than about investing, but every once in awhile we hear from one who wants to get a head start. And we cheer.

That’s because investments made when you’re young–in your teens, 20s and 30s–have decades to grow and compound (that’s when your returns earn returns). There’s nothing like time to transfer even small sums into sizeable fortunes.

Simply put, starting to invest while you’re young is one of the easiest ways to get rich.

For example: Leah, a college sophomore, recently wrote to ask advice on how to invest. She has $5,000 saved up.

If she invested that $5,000 mostly in stocks or stock mutual funds, chances are excellent that she could earn an average annual return of 8% or better over the coming decades. That means her $5,000 nest egg would be worth more than $100,000 by the time she retired.

Where to put the money? The answer: somewhere cheap. No investor wants to pay unnecessary fees and expenses, but the damage multiplies the longer your money is invested. If Leah chose investments with expenses that trimmed just 1% of her returns each year, that $5,000 would grow to $71,000–or about 30% less.

So: look for low-cost investments like index mutual funds. And to make your financial life even easier, consider a target date maturity fund such as Vanguard Retirement 2050 or T. Rowe Price Retirement 2050.

Target date funds do all the heavy lifting for you. Not only do they pick the investments and the asset allocation (how your money is divided among stocks, bonds and cash), but they gradually adjust the portfolios’ investment risk as you age. (The numbers refer to the year or decade in which you plan to retire…Leah’s got about 40 years in the workforce ahead of her, so 2050 would be around the time she will probably quit work. If she were 10 years older, she might pick a 2040 fund).

Just about every mutual fund company and brokerage offers target date maturity funds. So do most 401(k)s. They’re a great way to get started with investing and to simplify your finances.

Here’s to a rich life, Leah!

TAGS: Investing, retirement, target date maturity funds, Women and Money, young investors

I used to teach with Betty Friedan and this week I was reading through her autobiography, Life So Far. It reminded me of all women have gone through to get the right to vote and to achieve fairness in hiring and paying of women for the same work men do. We’re not there yet by a long stretch. And that seems odd. Women my age and younger, especially younger, often think that those women did what had to be done and now it’s just a matter of maintenance. If you really look though at things like the recent Supreme Court decision in the Ledbetter case determining that pay discrimination must be noticed within the first 180 days after its occurrence, you see how easily progress can slip away.

All the more reason to be aware very early on about matters of pay and merit raise increases. Sometimes that means doing research — asking people who work with you who would know pay and raise ranges. There are laws on the books to protect women from discriminatory practices, but being aware of what is going on around you all along, from before being hired, until you leave is what really can provide protection. And then there is no need to resort to legal remedies.

This is, however, where many women feel uncomfortable. They don’t want to be seen as making trouble. Well, there’s trouble and there’s trouble. One way or the other and some time or another, there usually is trouble at work so it’s best to nip what you can in the bud. Reading the tea leaves is how I refer to this talent in “The Secret Handshake.” It’s an acquired skill. But no time like the present to start practicing!

TAGS: Pay Disparity, Political skills, Women and Money

If you don’t have all the money you need to live your life the way you want, free from concerns about money (my definition of rich) it could be that you’re suffering from one of the following personality traits that aren’t fatal, but are flaws. 

The Hoarder

The good news is that hoarders actually save money, but they don’t invest it or take the time to build budgets that would help them to enjoy their money.  They’re so afraid of becoming bag ladies, they stash away money without thinking about how investing could yield substantially more wealth.  Similarly, they won’t buy things that would allow them to enjoy life a little more because they see it as frivolous or themselves as undeserving.  Whatever the reasons, The Hoarder isn’t living a rich life, even if her bank account says that she can.

The Ostrich

The Ostrich would rather not know how much money she has – or doesn’t have.  As long as there are checks in her checkbook she doesn’t even THINK about money.  She doesn’t keep tabs on bank statements or investments, nor does she take the time to learn about how she could live a richer life by managing her assets better.  She often lives paycheck-to-paycheck, content with knowing she has enough to make it through another month.

The Spender

Money burns a hole in the pocket of The Spender.  Sometimes it’s money she has and sometimes it’s money she gets from various sources of credit – often putting her into deep debt.  The Spender may be exhibiting compulsive behavior. Psychological help could be needed to assist her with diminishing the compulsive spending. Although on the surface it appears that The Spender is leading a rich life, when you scratch below she may not have a liquid nickel to her name and be in for a huge change in lifestyle if she loses her job or when she gets ready to retire.

The Abdicator

At least The Abdicator has the wisdom to get someone to help her manage her money. The bad news is that she turns over full responsibility to that person and rarely checks on how her money is doing.  The Abdicator may hire a professional financial advisor or just turn her money over to a spouse or significant other.  Once she does, however, she washes her hands of it and expects someone else to look out for her best interests.  Once she does look into how her money is doing, it’s often too late – she finds she’s been taken advantage of by either unscrupulous or well-meaning but ineffective advisors. 

The Do-Gooder

Money means little to The Do-Gooder other than having enough of it to loan or give away to people in need.  She may have learned in childhood that “money can’t make you happy” or think that giving away money makes people like her.  In either case, she sees little value in accumulating it.  The Do-Gooder often ignores my maxim, “You can simultaneously do good and do well.”

TAGS: living a rich life, nice girls don't get rich, personality types, Women and Money

Liz’s post made me think; if I had to put myself on the continum between tightwad and spendthrift, there’s no doubt that I’d fall on the spendthrift side.  My husband, on the other hand, would not.  I am grateful that neither of us is too far from the middle, yet our predilections have certainly led to some less than fun conversations over the years.

And we’re not alone.  Some sources say that money disagreements are a factor in 90% of breakups.  Of course, money alone is not usually the issue – underlying the disagreements are all kinds of personal baggage as well as concerns about how the partners treat one another.  M.P. Dunleavy wrote an article for the New York Times the other day where she disclosed that her husband had been throwing out catalogs addressed to her before she saw them.  It seems his rationale was that what she didn’t see, she couldn’t shop for.  Hnmmmm…. (more…)

TAGS: communication, financial freedom, personal finance, Women and Money

Every time I write about couples and money, I get emails from misogynists taking me to task for suggesting males might overspend. Everybody knows, these gentlemen proclaim, that women are the real spendthrifts.

My email bag begs to differ. I hear from plenty of women who despair about their partners’ inability to control their spending.

A recent paper from the folks at the Wharton School sheds some interesting light on the topic. These researchers constructed a “Tightwad to Spendthrift” continuum and invited people to take a test to see where they landed.

• Overall, 24% landed on the “tightwad” end of the spectrum, which basically means that they find it painful to spend money.  The researchers proposed “that an anticipatory pain of paying drives ‘tightwads’ to spend less than they would ideally like to spend.”
• In contrast, the 15% of respondents who wound up in the “spendthrift” category ”experience too little pain of paying and typically spend more than they would ideally like to spend.”
• The rest of those polled (60%) wound up in the “unconflicted” category. (That doesn’t mean they don’t have money issues, credit card debt or inadequate savings, by the way; it just means that in the hypothetical situations they spent neither more or less than they considered ideal.)

Interestingly, women in the survey were just as likely to be defined as tightwads (20%) as they were spendthrifts (19%). But men were far more likely to be tightwads (29%) than they were spendthrifts (11%).

Of course, this is just one study of self-selected participants who found their way to the Internet test and spent the time to take it. That falls a bit short of the rigor one would expect of scientific polling.

Still, it’s food for thought. What I found more interesting than the gender differences was the fact that so many more people, men and women, wound up on the tightwad end of the scale than on the spendthrift side. For all the attention given to impulse spending and compulsive shoppers, these results indicate that many folks are–as the researchers put it–”frustratingly unable to indulge themselves.”

The key to successful money management is balance, and many people don’t have it. Whether you spend too much or too little, it’s worth the time and effort to address your financial issues.

TAGS: compulsive spending, differences between women and men, spendthrift, tightwad, Women and Money

I gave an interview the other day to Daryl Hannah of Diversity Inc with some advice for those negotiating a job offer.  Here’s the piece he wrote.

TAGS: Interview skills, negotiating pay, Women and Money

At some point, many of us will face the onerous task of emptying out our parents’ or other elderly relatives’ homes–either because they’ve died or they’ve moved into assisted living.

It’s a huge job, and it often falls to women: often the daughters, sometimes the daughters-in-law or, as was recently the case of our family, to the sisters.

Trying to deal with a house packed with stuff is a struggle when your life is already a busy one, with a career, children and a spouse to juggle. At best, it’s a big time drain and a distraction. Add in the emotional trauma, the exhaustion of caring for the elderly relative and perhaps some sibling tension, and you’ve got the recipe for a traumatic experience.

Appraiser Julie Hall says it doesn’t have to be a nightmare, though, and I agree after reading her excellent book, “The Boomer Burden: Dealing with Your Parents’ Lifetime Accumulation of Stuff.” I interviewed her recently and captured some of her best advice for my recent MSN column, “How to get rid of your folks’ stuff.”

She has practical ideas for managing the actual clear-out, but some of her best tips have to do with prevention. If it’s too late to help your folks, help your kids by:

• Decluttering now. If you haven’t used it in a year, get rid of it. Sites like Unclutterer.com can help provide tips and motivation.
• Give away heirlooms while you’re alive to enjoy the reaction.
• Make a master list of who gets what. You need a will, of course, but you won’t necessarily list every item of sentimental or financial value there. Create a master list and get your kids’ input of who wants what, then you make any hard decisions, so they won’t have to.

TAGS: parents, women, Women and Money