Make Money, Not Excuses: Wake Up, Take Charge, and Overcome Your Financial Fears Forever - Hardcover

Jean Chatzky is the editor at large for Money magazine and is the financial editor for NBC’s Today show. She is a columnist for Time magazine, the Daily News, and Travel + Leisure. She is also the host of an upcoming PBS weekly series, Jean Chatzky’s Your Money, and the author of four books, including the bestseller Pay It Down!

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“I Don’t Know Where to Begin”

Don’t Bitch

Getting Over the Unknown

I am one of the fortunate people who really like what they do for a living. One of the main reasons I enjoy my work is that it takes me out into the world. About once a month I travel to far-flung places such as Phoenix (Arizona), Pasadena (California), Fort Worth (Texas), or Fort Wayne (Indiana) to talk to groups of people—often groups of women—about money. My favorite part of these journeys isn’t the half-hour or so prepared speech I get to give. It’s the question-and-answer session that comes after. Some of the questions are always regional (“Is now a good time to buy a house in this market?” or “What do you think of the future of the big national corporate conglomerate that just happens to be based three miles down the road?”). But others are so wide-ranging I can count on them being raised whether I’m holding court in Detroit, Duluth, or Des Moines. Someone generally wants to know: “What’s the best way to choose a financial adviser?” Someone else typically asks: “Should I be buying long-term-care insurance for me or my parents?”

But the question I get asked more than any other—the one I get asked every single time—is the following. It’s never first. In fact, it’s often last . . . as if the person speaking waited until the moderator said, “We have time for only three more.” It usually comes out of the mouth of someone who feels a little silly asking it—who prefaces her question with an apology to me and the rest of the audience for being “so basic.” And it goes like this:

I don’t even know where to start. I mean, really. I feel like I know so little about my money that I don’t even know where to begin. Can you point me to a book or a magazine or a website or something that can get me going?

Sometimes, the floodgates really open, and the questioner ends with the complete truth, confession-style: “I’m tired of feeling like a total idiot about my money.”

I have to admit, the person who asks this question immediately becomes my favorite person in any crowd. Not just because she dug deep and was honest about wanting help. But because now that she’s revealed that she’s looking for help, I can do something for her.

As I collected—via e-mail—letters and excuses from women around the country about why they don’t take a more active role managing their money, this feeling of total inadequacy popped up again and again. From young women, older women, women with college and graduate degrees, women in the workforce, stay-at-home moms . . . in other words, from all types of women, in all parts of the country.

This one, from Rebecca, a stay-at-home mom, is typical:

For anything else in my life, I would get on the Internet, read some articles, talk to some people I know, and make a decision. But I’m paralyzed when it comes to money. I don’t even know where to start.

Jennifer, a publicist, put it even more succinctly:

I don’t know where to begin.

This Is Where You Begin

You’re in the right place: This is where you start. In this chapter, I’m going to give you a set of tools you can rely on to make any financial decision, to sound brilliant defending why you’re making it, and to quickly get on the road to a richer life.

But first, let’s explore why you can’t get started with your money.

Rebecca put it really well when she said: “For anything else in my life, I would get on the Internet, read some articles, talk to some people I know, and make a decision.” That, in a nutshell, is how women make nearly every large, important decision. We do our homework using the resources at our fingertips—the Internet, newspapers, and magazines. We tend to be consensus builders so we gather the opinions of the people we trust most: our mothers, sisters, and girlfriends. We take our time readying a case we could defend in the toughest of courts, and then (only then) do we pull the trigger.

Most of the time, as we’ve learned through experience, that sort of decision making works fine. Say you’re an East Coaster trying to plan a vacation for your family of five. You know you want to go to the beach in December. So you hop on the Internet and go to a site like weather.com. You learn that at that time of year Florida’s weather is inconsistent but the Caribbean can be counted on for sun. Your spouse wants a direct flight, so that eliminates a few of the smaller islands. You both want a short flight, so you focus in on Puerto Rico. Next you surf to tripadvisor.com to see what people are recommending as kid-friendly places to stay. You narrow your search to a Westin and a Hyatt. Finally, you talk to your friends who have been to Puerto Rico, settle on a hotel, book flights, and emerge confident you’ll have a great vacation.

And that’s, as I said, a fairly large, important, expensive decision. You make smaller decisions with confidence every single day. Paper or plastic? Grey’s Anatomy or Law and Order? Coke, Pepsi, or—what the heck—Fresca? You blow through them as though they’re absolutely nothing. If, occasionally, you hit a stumbling block—heels or flats? pants or a skirt?—a little trial and error (or a call to a close friend) does the trick.

Why are you able to make these decisions—large and small—with such aplomb? Because you’ve learned, over the course of your life, that for you there are right and wrong answers. Fresca gets drunk in your house; Pepsi sits in the pantry. Grey’s Dr. McDreamy does more for you then Law’s not-so-dreamy detectives. Unless you’re fighting a spouse over the remote, there’s no argument. One is better. One is right.

Yet in the world of money—particularly in the world of investing—there are few right answers. Which stock is the best one to buy? Which mutual fund will rise the fastest? People may claim to know (just turn on CNBC and you’ll see a dozen of them within an hour), but no one really does. That makes it tough to get to the starting line, particularly for women.

We like to know the outcome before we make any decision. That’s why we not only cook from recipes but prefer that those recipes come from Julia or Martha or Rachael because we’ve learned that we can trust them. We may loooove Tom Hanks as much as we love our spouses, but we’re willing to spend $10.50 for a ticket to his latest picture only after we’ve read a handful of uncontested reviews. Everything from the books we select for our book clubs to the doctors we see for our children gets sliced and diced and picked apart and commented on before we step up to the plate.

And women not only need more information but need it to be broken down into small, digestible pieces. Along the way, if we’re not convinced of a particular piece, we stop and ask for help—we’d prefer it from trusted sources. (Figuring out how to get good help is such a conundrum for women that I deal with that matter specifically in Chapter 9.) Not surprisingly, it takes women longer than men to make most decisions. Not just about money, about everything. Men don’t need to know the answer before they tackle the question. They tend to say, “Gimme the facts, gimme the figures, gimme the logic and the rationale, and let me build a machine.” It’s very much a left-brain approach. They work from start to finish, from left to right, from point A to point B. If they like Denzel Washington, knowing that Denzel Washington is in a new movie is enough to make them buy a ticket. If the end result isn’t totally to their liking, they either fiddle with the decision to make it more acceptable or—more likely—figure out a way to defend it, convincing everyone around them (and themselves in the process) that the outcome was precisely the result they had in mind all along.

And there are other complicating factors:

·The world of money has its own vocabulary. Don’t worry, I define terms—in English—beginning on page 251.)

·The world of money is shrouded in secrecy. Some progress has been made, but talking about financial things—how much credit card debt you’re carrying, the size of your student loans—just isn’t polite. If the number is too high, friends will think you’re bragging. If it’s too low, they’ll think you’re asking for a handout. Nobody wins.

·The world of money involves higher stakes than picking a movie to see on date night. When you’re deciding whether to contribute to a 401(k) and how to invest the money you’re contributing, whether to refinance the mortgage, whether to accept a new job, whether to buy life insurance, or whom to name as guardian for your kids in your will, money decisions tend to be important, potentially life-changing decisions.

And there are no right answers. Of course you’re stuck.

The Power of “Good Enough”

The logical next question is: How do you get unstuck? Step one is getting yourself to acknowledge—no, more than that—to really believe, that in this particular area of your life, you do not have to be right. Yes, you heard me correctly. You don’t have to be right. Not only that:

You don’t have to be perfect.

You don’t have to be the best.

You don’t have to be at the top of some class.

You don’t hav...