Money Matters

August 31, 2006

What’s the old saying…never talk about money, religion or politics? Whatever. This is MotherTalkers, where we can have intelligent, nuanced discussions about anything and everything!

Today’s taboo topic: dinero, baby.

I found this article, about women and their relationship to money, quite fascinating.

According to a recent survey, the vast majority of women feel financially insecure and more than half have a deep fear of going broke– even though we are better educated, work more and earn more than we did decades ago:

Amy Wolff, a certified financial planner and certified divorce financial analyst, said that in her experience, the results are “absolutely accurate. Just about every woman who comes into my office is just terrified to death they are going to run out of money,” she said.

Why the fear? Women have longer life expectancies but typically earn less than men. Some spend years out of the work force raising children. “We (women) have less money available to put away for retirement and we have to make it last longer,” Wolff said.

All true. Which is why it astounds me to think that there are so many women out there who, willingly or unwillingly, take a very limited role in figuring their family finances.

The survey asked women to identify themselves as one of five financial “types.” 17 percent most closely identified as “Alice in Wonderland: You’re confused and know very little about finances.”

That would be my mom. I love her to death, but it freaks me out that she never keeps receipts or balances her checkbook, and doesn’t even fill her own gas tank. So the recent surge in gas prices hasn’t fazed her at all, even though she drives a giant SUV. It must be like living in some fairyland, I told her, just buying things without worrying whether there are funds to back it up, and having your gas tank refilled like magic! She just trusts my dad to deal with all of it. God bless her, but I’m too much of a control freak to operate that way.

And 8 percent said they were “Cinderella: You hope that someone else will take care of you financially.” In other words, waiting for their knight in shining armor to provide for them. Oy.

As for me, I’m a “Goldilocks: You’re highly knowledgeable, do your research, and assume responsibility for your family’s investment decisions.”

But I traveled a rough road to get there.
I went off to college naive and debt-free. Never had a checking account, and I signed all those financial aid and loan applications without giving much thought to it.

Once at school, I was bombarded by credit card offers wherever I went– the Student Union, the mall, and even the mailbox. I was quite proud of my Boston University MBNA card with a lovely picture of the Charles River emblazoned across the front. It made me feel grown-up, even more so when they kept raising the credit limit, all the way to $7,500. Only now do I look back and think, those filthy bastards had NO BUSINESS giving that kind of credit to a student with next to no income! But at the time, the credit card funded my Newbury Street shopping sprees. Yikes…

By the end of college, I had acquired a substantial amount of debt, and the low-paying newspaper internships just weren’t covering all my monthly expenses and minimum payments.

The collection agencies started to call. My future husband, who was a few years older and had more income, stepped in and bailed me out. When we got married, we took out a couple of loans to repay all our debts (mostly mine). It took several very lean years to get out of the red and repair my credit, but I learned my lesson.

Today, I balance our checkbook, pay our bills, make regular contributions to our high-yield savings account, 401k, IRA and college savings account. I make sure we don’t buy anything we can’t pay off immediately, and my awesome husband usually consults me before making any substantial purchase.

We own a home and have a positive net worth, which thrills me to death. We drive older cars and while we could afford newer ones, I’m reluctant to take on any new payments when we just don’t have to. I rarely buy expensive things, and when I do, I usually end up returning them to escape one nagging thought: “This money could have gone into Maya’s college account!”

It’s a lot of work, but I enjoy the sense of control, like seeing the balance sheets, love knowing that we have a decent amount of savings in case of financial hardship. Because of my active role in our finances and the fact that I have a close-knit, supportive family that I know will rally around us in a time of need, I am NOT afraid we’ll ever go broke. And that feeling is priceless.

I hope to teach my daughter, from a young age, the value of money. I want her to know how to save, spend, and donate to charity.

I want her to know that credit cards are BAD, that she needs to live within her means, and that you can’t derive your self worth from the brand names on your clothes.

I don’t want her to be “Goldilocks.” I want her to take the next step and become a “Wonder Woman.”

How about you, fellow MotherTalkers? When did you learn about money? Still learning? What lessons do you hope to impart on your kids? Plus, TAKE THE POLL to see which money “type” you most relate to!