In recent years, women have begun making more money. There are more women listed in the Fortune 500, and there are many more independent women now than a generation before. Despite these trends, for many of us, money still remains a taboo topic.

We hope to get you started (or restarted) on your road to financial independence, whether it is in the form of opening a savings account or funding an index fund. Like that old adage, “There is no time better than the present,” it’s incumbent on women of all ages to know the state of their financial health as well as that of their bodies. After all, this is knowledge that can help you to make the best, most informed choices for yourself and your family.

Money and your family history

The lessons we learn about how to manage money begin early, and they can be hard habits to break when we’re older.

The fact is, every family has its own comfort zone with money. Most stay within their safe area, but once they realize that they aren’t betraying anyone, some can reach past it with success.

So speaking with other members of your family about your family’s financial history is a good place to start. There are usually some good stories to share, and doing so will help you begin to move away from thinking about money as “the root of all evil,” or even as a taboo subject.

Why am I afraid of managing money?

To help you begin the process of caring about your money matters, it’s extremely important to understand where your feelings about money come from. We are all different, and there are reasons why your approaches to money differ from everyone else’s.

Answering the following questions will help you identify your own ingrained ideas about money, and will help you identify what approaches work, and what might have to change:

  • Growing up I thought money was...
  • My father taught me that money was...
  • My mother taught me that money was...
  • In terms of money, I’ve always thought I would have...
  • If I won the lottery, I would...
  • My first memory of money is...
  • I am smart about money because...
  • What scares me about money is...
  • I would risk a lot to have...

We all grow up surrounded by whatever is culturally valuable, and the way in which men and women are viewed when talking about money can be very different. Many of us avoid thinking about or managing money because when we were young, we were taught that all this was information girls didn’t need to know. Many people feel threatened by rich and powerful women, thinking of them more as “mean queens ” than benevolent, knowledgeable Warren Buffetts.

In many families, these gender differences can begin pretty much from the day we’re born: girls play “house” with their dolls; boys learn about sports and stocks. We all learned sometime in school how to balance a checkbook, but, unfortunately, for most women that was the last of their real financial education. While some women figure out how to plan a household budget with the family earnings out of urgent necessity, most of us were not taught how to invest or grow money. Some may think the best place for it is under the mattress or in the candy jar, but both of those spots are like putting plants in a dark closet — they will never grow without some sun and water.

The truth is that many women end up doing some pretty foolish stuff by accepting less than they deserve. We are selling ourselves short by not believing in ourselves, or downright fearing money management, and this kind of unhealthy fear can affect every aspect of our lives: fear can keep us in a job or even a marriage for much longer than we should stay, and it can prevent us from thinking that we can do better, and seeing the many other healthier and happier options right in front of us.

Your money and your spouse

Now you may be thinking, “Do I really need to read this? I’m taken care of. My husband and I have everything planned.” Well, if you have, you’re one of the few. But do you really know what your circumstances would be if something happened to your partner? How often do you communicate with your partner on financial matters? Have you carefully looked over your mutual assets? Do you understand them? In other words, will you know what to do if something were to happen?

Men grow up with very different assumptions about money — they never expected a knight to ride in on a white horse and rescue them. So it may be easier to discuss the basics of money and your insecurity (statistics say that only 1% of American women would give themselves an “A” in finances) about the subject with other women, or perhaps a sympathetic male.

And what you may not know is that most financial experts recommend that women now have at least one separate account, either for their own pleasure, or for the future. There are frightening statistics about how women (and men also) are unprepared for retirement — but remember that women are the ones living longer, and living alone. And taking care of your financial health is just as important as taking care of your body, if for no better reason than because it affords you the means to care for your body.

The good news is that you have taken the first step by reading this article, so after speaking with your family about your history with money, the next thing to do is a self-assessment: what is your education level about money? What education plan might suit you best? Some of this you may know already, but hopefully you will find something a little different here.

Educating yourself about money

Try to learn about one new area of money a week — stocks, mutual funds, index funds, bonds, T-bills, dividends, etc. Make it a goal to enjoy reading a financial prospectus. The following resources may help:

  • Enroll in a course at a local college.
  • Take an on-line course on personal finances, and figure out your own net worth and cash flow.
  • Read a book on women’s finance — see later for some recommendations.
  • Make appointments with a few different financial advisors, and get second opinions.
  • Form a money club with a group of friends.
  • Make a book club choice about a money book (again, see list at end of article for suggestions).

The best money courses address our financial blueprint along with family and cultural values first. If they don’t, they’re probably not worth the money, and you’ll only get so far with them. We’d like to share three of our favorite female money experts' advice.

Who are the money experts who can help me?

Barbara Stanny. The first expert we’d like to share with you is Barbara Stanny. Barbara tells her personal story of being the daughter of the “R” in H&R Block, yet knowing almost nothing about money, and having her first husband gamble away most of her inheritance right in front of her eyes.

This was quite a wake-up call for her, so Barbara set out to interview women about money (see her Secrets of Six-Figure Women), then taught herself how to manage and grow finances. And now she is teaching other women. As she writes in her book, Prince Charming Isn’t Coming, she has found the Prince Charming Syndrome or “PC Syndrome” alive and well in the new millennium. She first wrote that book in 1997, but with the new edition she found that along with the Baby Boomers, even 20-somethings are seduced by this myth, even if it isn’t exactly a shining knight on a white horse.

In her workshops Barbara provides many pearls, but three easy ones to remember involve these simple steps you can take daily, weekly, and monthly:

  • First, try to read something about money every day, even if it’s just to peruse the headlines in the business section of the paper. Before long, you can graduate to the Wall Street Journal.
  • Next, every week talk about money. Form a club or schedule a professional appointment or two.
  • Then, every month, save some amount.

This incorporates the thinking, talking and doing aspects of any practice.

Kim Kiyosaki. Then there is the powerful woman behind the man. Kim Kiyosaki is the wife and business partner of Robert Kiyosaki of the Rich Dad, Poor Dad book series. She has a book out called Rich Woman, in which she shares hers and Robert’s story. But she also incorporates the stories of several of her women college friends and their ideas about money and finance, and what changes they need to make. On her website, RichWoman.com, Kim also discusses fears about money and how to manage them, and offers lots of suggestions through multi-media to help women claim their financial independence.

Suze Orman. Last but not least is Suze Orman, who is probably the mother of women’s financial literacy. Suze offers up a wealth of information in her books, tapes, CD’s, and on her PBS and other television shows. In her most recent book, Women and Money: Owning the Power to Control Your Destiny, she admits that she never thought she needed to write a book for women. She thought women could handle their finances as well as any man, and that it just plain wasn’t necessary.

Other resources

Editor’s Note: Check out the book by financial analyst Brent Kessel. As a practitioner of yoga and a co-founder of Abacus Portfolios, Brent has a unique perspective on how we handle our finances according to our “money archetypes,” as explained in his book, It’s Not About the Money. He views money as a form of energy that we use in accordance with specific patterns that develop out of our individual life experiences. Our wants, needs, fears, and past experiences have powerful effects on how we handle our money, whether it be spending habits, saving patterns, or debt. Especially for women who have been accustomed to living in a situation where a parent, partner, or spouse has control over finances, understanding the patterns that characterize your relationship with money can be particularly valuable when the time comes — as it almost always does! — for you to take responsibility for your own financial life.

The good news for novice investors: women in general tend to do very well at investing once they become empowered through education. “The feminine characteristic of emotional intelligence when making decisions is one of the main hallmarks of a successful investor,” says Brent. Women also more readily identify the emotional drivers — fear, shame, envy, anger, or helplessness — that may steer some of their financial habits or decisions into negative territory, helping them to avoid those pitfalls. One helpful resource in the book is an exercise called “The Worst Case Scenario”, in which you’ll take yourself through a guided visualization of your fears about your finances. “What you’ll find,” says Brent, “is that you have inner resources that you don’t recognize.”

Then she realized that some of her closest women friends — accomplished women she assumed should know better — were clueless about money. They weren’t talking about it, and some were even hiding it, or just weren’t listening. But then you can read the book to find out more. This is Suze’s eighth book and she covers everything from A to Z, from every kind of insurance coverage, wills, trusts, savings accounts, and getting out of debt to investing. You can learn more on her website, SuzeOrman.com.

The link between your health and your wealth

There are many different ways that we can define how to be wealthy. Women have come a long way to obtain power and rights to our own bodies and health, and we need to realize that we can do the same with money.

Although much of what creates both health and wealth are individual, day-to-day decisions, all the money in the world can’t buy good health. Likewise, perfect health doesn’t guarantee financial wealth, but it can help us appreciate what we have, help us to learn more about our money and ourselves, and help us live wealthier lives overall. But the ways to obtaining both health and wealth come down to the formula we’ve discussed in this article:

1. Get educated on your personal history.

2. Look at your feelings and fears, and then learn the facts.

3. Take some action — knowing that it will take time, and there may be some detours.

Once you start actively changing the way you approach and talk about money, you can begin to understand the meaning of risk with money, and what your comfort level is with it. We can think of learning about money as a form of smart shopping — do some window shopping first, try on a few things, mull it over, perhaps purchase a few, and rest assured you have some time if you need to return things that don’t work well for you. Some items may sit in the closet for a long time, while there are others you will wear every day. Remember that risk does not always mean loss! Knowing your financial self-worth is an ongoing process, but even taking the smallest action can only build one’s self-reliance and self-esteem upward.

Giving back and making a difference

We all have different ways to “tithe,” and it’s a good practice. Many of us have been taught that if we think about money too much, or if we learn about ways of controlling our money, we will appear as the “mean queen,” or greedy and selfish. The same idea hardly applies to men, who are rewarded for seeking financial independence!

Giving can be small and random, or bigger and calculated, or any combination. Find a few charities that matter to you. Do your research to make sure they do not have high administrative costs. Donations are tax deductible also!

Changing how you think about money

Have you ever thought, “If I’m so smart, why am I so dumb about money?” You are in good company — but it’s time to start making a change in your thinking. Money management can be learned, and it is very unlikely that anyone will view you as greedy for taking charge of your finances. After all, understanding money is a great tool for giving us more choices: it can help us take charge of our lives, and it can help us protect ourselves, and those we care about the most.

Like anything else, it’s impossible to change your financial knowledge or independence without first recognizing that change is possible. Though no one can do it for you, you don’t have to do it alone! There are really no secrets, but it does take some guidance and practice. It is probably just as simple as spend a little less, save a little more, invest some, and then give back generously.

Thinking positively tends to breed positive results, and using any of the strategies we’ve discussed will hopefully help you begin to visualize where you stand in your relationship with money today, and more specifically, where you would like to go from here. What better time than the season for giving to give yourself a better education about money? It is a gift that is bound to grow.

References

1Cromie, W. 1998. Why women live longer than men. Harvard University Gazette. URL: http://www.hno.harvard.edu/gazette/1998/10.01/WhyWomenLiveLon.html (accessed 12.04.2007).

2 Barbara Stanny’s website: Revolutionizing women’s relationship with money. URL: http://www.barbarastanny.com/ (accessed 12.04.2007).

Stanny, B. 2002. Secrets of six-figure women: Surprising strategies to up your earnings and change your life. NY: Collins.

Stanny, B. Prince Charming isn’t coming: How women get smart about money. NY: Viking Penguin, Ltd.

3 Kim Kiyosaki’s website: Rich woman — Financial literacy for women. URL: http://www.richwoman.com (accessed 12.04.2007).

Kiyosaki, K. 2006. Rich Woman: A book on investing for women — Because I hate being told what to do. Rich Press.

4 Suze Orman’s website: Suze Orman — Internationally acclaimed personal finance expert: The Suze Orman Show: Will & Trust Kit: FICO Kit: Insurance Kit: Women & Money. http://www.suzeorman.com/ (accessed 12.04.2007).

Orman, S. 2007. Women and money: Owning the power to control your destiny. NY: Spiegel & Grau.