Jean Chatzky: “Earning money makes me feel safe and independent”

financial expert jean chatzky

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Jean Chatzky is a personal finance journalist, bestselling author of eight books and financial editor for NBC's Today Show. Here we talk about:

  • Focus on earning vs. skimping – especially for women. “Your financial life doesn't work how much you save if you're not bringing in money.”
  • “I enjoy earning money, it makes me feel safe, confident and independent.”
  • Why she wished her latest book was entitled “Don't Bitch, Get Rich.”
  • Her new book, Age Proof about living until 100 without going broke.
  • The incredibly toxic power of financial stress, your physical, emotional health.
  • Why you don't have to be wealthy, but a regular, consistent saver to build a healthy lifestyle and secure future.
  • Women really have much higher stakes when it comes to money: we earn less, live longer, are more likely to be responsible for raising children and caring for older relatives.
  • It doesn't need to take a ton of time to manage your finances in a powerful way.
  • The prevalence of women choosing to not be involved in family finances, having no idea about where the money is, what accounts are open, which are in their name, their spouse's income.
  • The big fallout of not being financially astute for married women. “You need to be able to go out and buy a cup of coffee or shoes without asking permission. That is the way adult people function in the world.”
  • Jean's top 3 tips for women seeking financial independence.

 

Check out Jean Chatzky's podcast Her Money here. 

Jean's blog here. 

Or her books on Amazon here. 

 

 

 


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Full transcript of Like A Mother podcast episode with guest Jean Chatzky

Emma Johnson: I am thrilled to welcome today's guest, arguably one of the best known, most famous voices and faces of personal finance, Jean Chatzky. She is The Today Show financial editor, best selling author of eight titles about money, often about women and money, and she is the host of the wildly successful, “Her Money” podcast. Jean, thank you so much for being here today.

Jean Chatzky: Wow! Well, thank you and it's nice to be with you. I don't know about that. I think Jason Zweig is the most well-known financial journalist in the United States, but we can debate that later.

Emma Johnson: No, we're not debating it. It's my show and that's what I said, so that's the end of that.

Jean Chatzky: Okay. Okay.

Emma Johnson: One of the things I've always wanted to ask you about, I bring up with you because I spent all weekend reading all eight of your books, cover-to-cover. Just kidding.

Jean Chatzky: Don't tell me you're kidding.

Emma Johnson: I'm totally kidding, but I have followed you over the years, we bump into each other at events and you're always as sweet as you appear on The Today Show. I want people to know that about you. In all of your books and your advice, it's always the advice is about saving, investing, paying off debt, financial security, the right insurance, but your number one advice including, and maybe especially for women, is always make money. Earn money. You start with the earning and not with the skimping. And I wanted you to elaborate on that. Why is that always the number one in your list and in your chapters and your books.

Jean Chatzky: Well, I think it's in part because of my own history. You and I have known each other well enough to know that, for you to know, I'm divorced, I'm remarried, but I was on my own for a long time, and I know that when your financial life doesn't work no matter who much you save if you're not bringing in money. And that doesn't mean that you have to be bringing it in yourself, but somebody in the family has to be bringing in enough to hopefully provide you with a comfortable lifestyle.

Making money makes you feel powerful, safe and independent

Jean Chatzky: And I got to say, I enjoy earning money. It makes me feel safe, it makes me feel powerful, it makes me feel independent. I enjoy it. I like the process of working, but I also like the process of getting paid. And so, that you got to start there, because unless you are fortunate enough, and I don't know many people who are, to have a trust fund, or an inheritance, or a lottery ticket that actually pays off, that's where the money has to come from.

Emma Johnson: I'm so glad that you said that, and that's something new that women are starting to say, is “I like to make money.” And I like to make money. I'm going to say it again because people need to hear that because it feels good when you got cash in your checking account, and your savings account, you're watching your investments grow. It feels so good and you know what feels bad? When you don't have money in your account. That feels horrible. And I remember talking about this exact same thing, I interviewed Sarah Megan-Thomas, who is the star and one of the creators of the new movie, Equity, that was out over the summer. I don't know if you happened to see it. It was an indie show.

Jean Chatzky: I haven't seen it yet. I really want to.

Owning your love of making money

Emma Johnson: Yes, I think you can get it online now and it is all about women and money. It focuses on Wall Street, but it underscores that the star, she is this powerhouse on Wall Street and she owns it, Anna Gunn, right, she says, she opens up, she says, “I like making money.” And you love her. Her character is very lovable. So, I'm so grateful for you saying that. It's not just about enjoying your work, it's about cashing that check and owning it, and owning that. So thank you.

Jean Chatzky: Oh sure. You know I had a funny exchange with my son last week because he just started his first job and he said, “Mom, you know what's great?” I was like, “What?” He said, “I got paid!” I said, “Congratulations. That's awesome.” He said, “You know what sucks?” I knew what was coming, but I said, “What” and he said, “Taxes.”

Emma Johnson: Yes. You know what, that's a whole another show because I don't know if I want to do a show on taxes because it's often dry, but that is like the part of finances that I feel that we don't talk about enough because it's like 50% of our income, right?

Jean Chatzky: Yeah. Well, for him it wasn't quite that, but he watched. They took a third out of his paycheck.

Emma Johnson: Well, a third, and then there's the sales tax, or your local and state taxes, and people don't realize that all of that adds up to 50%, roughly. Right? For most people.

Jean Chatzky: Yeah, it was incredible. There you go.

Emma Johnson: Welcome to adulthood, son.

Jean Chatzky: Exactly.

Jean Chatzky’s book, Make Money, Not Excuses

Emma Johnson: So, let's talk a little bit about women and money, because most of your eight books are really for both genders, but one of them is specifically geared for women, and it was a best-seller, like all of your books, and you called it, Make Money, Not Excuses. Why that title?

Jean Chatzky: Well I wanted to call it, Don't Bitch, Get Rich, but the publisher wouldn't have it and I didn't fight hard enough for that title, although I still think that title is better. But essentially we can talk ourselves out of doing the right thing when it comes to our money very easily. If you just can get yourself into a place where you can do the right thing over and over and over again. And the right things are not complicated. They're just habits that we have to adopt and that we have to stick with from the time that we're young, hopefully, until we get older, or if we don't come to them until our 40s or even 50s, then we just have to amp it up a little bit so that we can make up that ground.

Jean Chatzky: It's all about doing the right thing again and again and again. And then you're set and then you don't have to worry about it. I've been, for the past few months, I've been working … few months, for the past year I've been working on a new book called Age-Proof, which won't come out until March. But I wrote it with a doctor who's phenomenal, I learned a lot from him. It's all about living to 100 without running out of money or breaking a hip, essentially.

Jean Chatzky: And I've learned so much about financial stress and how it can just take over your life and do a number on your physical and mental, and emotional health. And if you can just embrace these habits and adopt them and stick with them, that stress goes away.

Psychological and emotional toll of money fears and bad financial habits

Emma Johnson: Thank you so much for saying that because I hear so many women that I work with, and interact with me on my blog and my Facebook groups and things, and they all say things like, “Okay, well I know I can afford that vacation, but I have time with my kids now, or I have vacation time, and I'll worry about the money later.” And, you know, maybe they will pay that off and maybe they'll even do the zero percent credit card balance thing, and financially they can swing it in some weird way, but they don't take into account exactly what you said is the fact that the psychological emotional toll that it takes, not only on their body and their minds, but on their whole lives.

Jean Chatzky: Yeah, and the habits that I'm talking about are really, you know, you just have to be a regular saver. And then you have to take the money that you saved and you have to put it to work, which you can do quite easily. You can set that up so that the money that is automatically deducted, like a 401k, it doesn't have to be one so many of us these days are freelancers and we've got to cobble together our own investment plans and retirement accounts. You know, you put it to work. You buy the right basic insurance policy so that you can't get derailed. And once you have those things then you pretty much know that you're heading in the right direction. You should take your temperature every so often to just double check.

Jean Chatzky: But even my son, you know, he's not making a ton of money, but he really … I guess growing up with me he drank the Kool-Aid a little bit, but he's like, “Okay, so I have to start saving and I don't have a 401k, so I got to do it automatically.” So he's just transferring some money every month from what he gets paid into a Roth IRA. It's not a lot, but he knows that as he burns more, he'll just increase that. And the important thing is to just be doing it.

Emma Johnson: Right. But let's got back to the bit about this advice being about for women, because you wrote a bunch of books for everybody, and one for younger people, Millennials, it sounds like your writing one for older middle-aged folks, but this book is called Make Money, Not Excuses, a.k.a., Don't Bitch, Get Rich. Well call it that, we'll call it for the sake of this podcast.

Emma Johnson: Why is that specific advice the advice you offer, stop complaining. Why do women, in particular need to hear that?

Why women should stop complaining about money

Jean Chatzky: Because we have to do whatever it takes to get out of our own way. When you look at women, it's not like we need different investments than men need. You know the same stocks that work in a guy's portfolio, or mutual funds are gonna work in ours. But our needs are greater. And that means if we're making excuses, and people can come up with a lot of excuses for why life gets in the way, or why, as you said, I don't have enough right now, but I'm spending time with my kids, if we let those excuses get in our way, as women, because we live longer and because we still earn less, and because we're still the ones, most often, that step back from the workforce to take care of kids and parents.

Jean Chatzky: When we get to retirement, we're not going to have enough money, and like it or not, we're going to outlive, in most cases, the men in our lives, and that means it's all gonna be on us. We're gonna have to deal with it. And so the excuse-making, if you do it, the putting it on, putting the finances on the back burner to be taken care of later is a lot more dangerous if you're a woman.

Emma Johnson: Right, and the other part of the equation, too, is in the event that you don't raise your children inside a traditional nuclear family, if it's a divorced family, or you were never married, way, way disproportionately the financial and logistically burden falls on the mom. It just does. It's been shocking to me in doing this work how little dads are involved financially, logistically time with their kids if they don't live in the same house.

Emma Johnson: And so it's not just that they're caring for those kids and helping them get through college, it's that they're then sacrificing their careers because they don't have a partner to balance all that work. So just underscore your point about how important it is for women to prioritize their financial health.

Why it’s important for women to prioritize their financial health

Jean Chatzky: Yeah, it's one of those things that you just have to figure out a way to make time for, and it doesn't have to be a ton of time. It is one of those things where if you can put some systems in place you can make it so that it's just another item on your list that you go through your day and you check off. When I think about how I manage my money, I don't look at my investments every week, let alone every month necessarily, but I know that I've set it up so that I'm always putting money in on a regular basis.

Jean Chatzky: I do look at my bank accounts pretty much on a daily basis because one of my habits is that I pay bills as soon as I receive them, so I still get some bills in the mail, like 90% of people do. They come in the mail, I open it up, I sign on, I pay it, it takes literally 2 seconds and I'm done. But it's just you need … and that's not gonna work for everybody. Some people like to do it in a batch, some people like to have more bills paid automatically, whatever your system is just figure out what works for you, and then make it routine.

Emma Johnson: Right, but what I'm hearing you say is you just have to take that step and decide you're going to do this. You have to take ownership of it. Let's go back to the divorce equation, which so the same advice applies to all women, married, single, divorce, whatever, I was recently at this luncheon here in New York City and it was for … they called it Women In Transition, but it was really for women getting divorced, and it was at an investment management firm and so it was a more affluent crowd that your average American, but the same advice applies.

Emma Johnson: And on the panel there was couple of divorce attorneys, an accountant, a career expert and financial planner, and they all introduced themselves and they're number one opening remark, number one opening remark, they all said the same thing and it was, “My clients are these extremely accomplished women, often multiple degrees from the best universities in this country, many of them still have thriving careers with high incomes, and the most common mistake that I see women make is they have no idea about the family finances. They have no idea what accounts are open, what their name is on, if their name's on the mortgage, they don't know what their husband makes, they don't know if their husband earns a bonus, and these women have chosen to be in the dark.” And that just floored me. That just floored me how prevalent that is.

Why aren’t women more involved in their household’s finances?

Jean Chatzky: I've heard it for so many years, I think it's still incredibly prevalent, not as much with younger women as with older women. But I think if you are listening to this, and you are nodding your head, or you are nodding your head maybe not thinking of yourself but of your sister, or your aunt, or your mom, or your best friend, the question to ask is “why?” Right? And why are you not involved? Because there is a lot of different answers to that question, and I think the answer is, require different solutions. There are some marriages where a relationships where one partner is not involved because the other partner doesn't want them involved. And that can be a difficult hurdle to overcome and may need some prodding on the part of a third party, like a financial advisor to explain why it's so important.

Emma Johnson: But that scenario just reeks of abuse. If one person actively does not want the other person involved.

Jean Chatzky: Yeah. No question. Although I've seen it in scenarios where one person, you know generally a guy who's a little bit older, thinks he's doing his wife a huge favor by taking it off of her plate. So I agree with you that it can reek of abuse, but I don't necessarily think … I think there's so much history in the way things used to be done, that I don't think it always comes from a place of wanting to hold your spouse back. It may come from a place of just wanting to be the caretaker. But whatever the reason is, it's not okay. And there are some women who don't want to be involved, and then you have to kind of ask yourself, “Why is this?” “What am I reluctant to take on?” “Am I afraid it's going to take time out of my day?” “Am I afraid I'm gonna look like I can't do this?” “Am I afraid … ?” Figure out what it is that is the reason that you're not involved and then try to address that problem.

Emma Johnson: Right. I think lots of women like to feel cared for. It's make them feel cared for to allow their husbands to manage that part of their lives.

Jean Chatzky: Mm-hmm (affirmative).

Emma Johnson: What's the fallout when women turn a blind eye? I mean, we know it happens in divorce, right, because they come to the table when they're negotiating their divorces from a complete position of weakness because they're clueless. They simply don't know what to negotiate for because they don't what there is.

What’s at stake when women turn a blind eye to their financial situation?

Jean Chatzky: Right. And there's a big learning process that people have to go through when they're going through the process of trying to negotiate a settlement, and it takes more time and energy and mental energy. I mean, it can be so difficult to try to learn it on the fly, which is why I believe, and I know you believe, that you're so much better off if you can just get yourself involved when you're not under that kind tremendous pressure.

Emma Johnson: Right. And for families that don't split up, where the couples don't split up, what is the downfall of not being financially aware and financially involved in your marriage?

Jean Chatzky: Well, there are two things that I think are the big risks. The first is death, right? I mean, you could lose your spouse, and then again you are up against a wall, and you got to handle things. It's the worst possible time in your life, you don't know where things are, you don't know what to do, and you're grieving, and so that's an incredibly difficult scenario.

Jean Chatzky: But the other thing, and I don't think we talk about this enough, is your spouse may not be doing a particularly good job of it. You know, you may be able to do a better job and you may have ideas and thoughts and input that could be incredibly valued and valuable, but unless you participate, you're never going to be heard. And if you're not being heard then when decisions are being made about how to best use your financial resources, you're not a part of that. And that's wrong on so many levels.

Emma Johnson: Right, you know what, Samantha Ettus, you know her, she just came out with this great book about women balancing important parts of their lives, and I'm so grateful to her because she came out very strongly said, she believes that all women should have their own income and what she told me on the show, she's like, “If you don't have your own income, you lose your power.” And I'm so grateful for her to say that because I believe the same thing. It's a controversial stance, but I think the same thing holds to, even if you have your own income, you still have to be involved with managing the money because otherwise you'll lose your power.

Women who don’t make an income should still have their own money

Jean Chatzky: Yeah. No question. I believe even if you don't have your own income, you still should have your own money. So if you're in a relationship where you don't work outside the home, and your spouse is responsible for the entire income for the family, I still think it's important to have a pool of money that you make decisions about. Spending and investing. When we're talking about investing, if you don't have your own IRA, you're missing out on an important tax deduction and an important means of allowing at least some of your money to grow in a tax advantaged way, but you also just have to be able to go out and buy a cup of coffee without asking permission. Or a pair of shoes, or do something that you want to do because it's on your list, not necessarily on your family's list.

Emma Johnson: Right, why is that so important

Jean Chatzky: Because of the way that adult people function in the world. If you are constantly checking yourself every time you turn around and go to spend money because you feel like you can't do it independently, it's a very parental relationship. It's not equal financially. And I'm not talking about one person can earn more than the other, one persona always earns more than the other, it's just you need to be able to make financial decisions on your own, otherwise when you are on your own, and chances are, as a woman you will be, you won't be comfortable making them.

Jean Chatzky: And this is the same thing that we try to teach our kids, you know, as you raise your children, you're trying to raise them so that they have the ability to be independent decision makers, independent thinkers and will become that as adults in the world.

Emma Johnson: Right, and we know of, regardless if you're talking about money or career or relationships, the best teacher for our children is our own modeling behavior.

The best teacher for our children is our own modeling behavior

Jean Chatzky: Yeah. No question. And if you look at the research, too, when children want information about how to manage their money, they want it from their parents.

Emma Johnson: Including into adulthood, and beyond. And beyond we want that information. All right, so we can leave women with three top tips for financial independence, really, that's what I'm all about. I want you to be financially independent. That doesn't mean that you can't have a financial partnership, romantic or otherwise, but financial independence for women, what would be your top three tips?

Jean Chatzky: I would say know what you want and how you're going to get there, or have a plan for getting there. It's very tough to achieve any sort of a goal in a vacuum, so if you can have a sense of what you're aiming for this year, in five years, in twenty years, of course those goals can change, but you should have at least some sort of a sense of where you want to go. That would be the first.

Jean Chatzky: The second we talked around, which is do whatever you can to make it easier for yourself. And by that, I mean sort of automate everything that you can possibly automate, because we're all really busy and unless investing happens to be your hobby, and it certainly isn't mine, you want to have time in your day for things that you truly enjoy, and if you can get the money working on some assemblance of automatic pilot for the most part, it's just a lot easier to maneuver.

Emma Johnson: Let's just dig into that one quickly because I think a lot of people, if they're new to investing, or they … maybe their spouse did it, whatev- … they can be incredibly overwhelmed by the idea, like how to automate. And the reality is there's so many tools out there that make it easier and easier, and if you think about it, banks, financial institutions, their whole job is to make it as easy as possible to get the money out of your account and into their account. Like that's their whole …. that's the only reason they get up in the morning. So there are so many wonderful tools out there. It's very transparent, it can be very low cost, it can be really fun because the technology is so beautiful anymore. To watch your money grow, there's so many tools out there. Like do you have a couple quick tip tools that you'd like, tech tools to automate these processes?

Best tools for growing your wealth

Jean Chatzky: I really think it depends on who you are and how you're going to work your life. I mean, the tools that I use most often are, I use direct deposit into my 401k, and I have the money go out through paycheck withdraw and invest it in a pool of investments that I've already selected. I use my bank's online bill payment and management system for pretty much everything else. But there are a lot of different tools. And if you're new at this and you don't have a retirement plan from your employer and you want to just set up an IRA as easily as possible, put your money into a target date retirement fund, or go with a robo-advisor where the money will be invested for you based on a couple of questions that you answer.

Emma Johnson: Right. Lots and lots of options. And so it's really like, once you set it up, you check it once or twice a year, you're literally not doing anything else. You don't even have to click a single button. That's how easy it is.

Jean Chatzky: Yeah. And then I was going to say get help when you need it, but I actually think because we're talking about investing, my third tip would be try to keep your emotions out of it. And that essentially means when you are … once you get it moving, and you're investing in your saving on a regular basis, don't check it all the time, don't try to micro-manage it, understand what your time horizon is and as long as it's lengthy, just keep putting the money in, keep investing it, and have faith that the markets will, over the long-term, take care of themselves.

Emma Johnson: Right. You don't want to play those ups and downs. And isn't that where women are actually better investors than men? Because men think they can outsmart the market and play it the investing, buying and selling all the time, whereas women tend to ride it out and are smarter that way.

Why women are better investors than men

Jean Chatzky: Yeah. Absolutely. And there was a big piece of research done years ago by Terrence Odean and Brad Barber that basically documented that and that women are better investors than men because men spend a lot more on commissions and fees because of all the trading costs.

Emma Johnson: Hear that ladies, we're actually better investors, but less likely to invest. What is wrong with that? Let's fix that.

Jean Chatzky: Exactly.

Emma Johnson: Alright. Jean Chatzky. Anything else you would like to leave everybody with?

Jean Chatzky: I would just love it if people would check out my podcast, which is called, Her Money. And it's weekly and we're having a wonderful time doing it.

Emma Johnson: Great. Thank you so much. Jean Chatzky, Her Money, host. I'm gonna say it, she is the best known financial journalist in the country. You can find her on The Today Show, she is the author of eight best-selling books. Her most recent is, Money Rules: 90 Straightforward Wealth Building Rules To Melt Away Your Money Woes, she is on iTunes and at jeanchatzky.com.Jean Chatzky: Thanks, Emma.

About Emma Johnson

Emma Johnson is a veteran money journalist, noted blogger, bestselling author and an host of the award-winning podcast, Like a Mother with Emma Johnson. A former Associated Press Financial Wire reporter and MSN Money columnist, Emma has written for the New York Times, Wall Street Journal, Forbes, Glamour, Oprah.com, U.S. News, Parenting, USA Today and others. Her #1 bestseller, The Kickass Single Mom (Penguin), was named to the New York Post's ‘Must Read” list.Emma regularly comments on issues of modern families, gender equality, divorce, sex and motherhood for outlets like CNN, Headline News, New York Times, Wall Street Journal, Fox & Friends, CNBC, NPR, TIME, MONEY, O, The Oprah Magazine and The Doctors. She was named Parents magazine’s “Best of the Web,” “Top 15 Personal Finance Podcasts” by U.S. News, and a “Most Eligible New Yorker” by New York Observer.A popular speaker, Emma presented at the United Nations Summit for Gender Equality. Read more about Emma here.

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