BusinessWeek Investor: Hers
Be Your Own Prince Charming
At age 27, I made a serious financial mistake: I blew my $5,000 retirement nest egg on a trip to Nepal. I figured I had plenty of time to save, I'd get married someday, and my husband (a.k.a. Prince Charming) would take care of me financially. Well, I've wised up since then. I cringe when I think that had I kept the $5,000 invested, it would now be worth some $20,000--and might well be $300,000 by the time I reach retirement age.
It turns out I'm not alone. Many women botch their financial planning because of such thinking--or because of outright terror of money topics, bag-lady nightmares, and everyone-knows-more-than-I-do anxiety. Such issues weren't discussed 20 years ago, but they sure are being discussed now. A recent search turned up more than 100 personal-finance books aimed at women.
Gender-specific books I find most valuable are those that help women understand their fear of finance and overcome the anxiety and stress surrounding investing (table). Empathetic in tone, they offer anecdotes and personal experience, which can help women feel connected to material they have found intimidating. Use these books to get your feet wet and build your confidence. Reading them in combination with a good personal-finance book that covers investing should help anyone new to money management.
One of my favorites is Prince Charming Isn't Coming, by Barbara Stanny, the daughter of H&R Block co-founder Richard Bloch. On her 21st birthday, her parents sent 21 bottles of wine to her apartment at Boston University, picked her up in their private jet, and flew her to Las Vegas, where they gave her several thousand shares of H&R Block stock. The message: You'll never have to worry about money.RESCUE FANTASY. They were wrong. Instead of learning to manage her money herself, she handed the responsibility to her first husband, who mismanaged her trust and left her with a $1 million tax bill. She finally woke up, took financial control, and now urges other women to change their behavior, too. "The prince doesn't have to be a man," says Stanny. "It can be an insurance settlement, the lottery, or anything we fantasize will rescue us financially," she says. Stanny gets to the heart of why women are less confident around money than men, then provides a plan to overcome those fears.
Ernst & Young's Financial Planning for Women is a practical guide to money. It describes the basic issues facing women throughout life's stages: single, getting married, living together, the sandwich generation, divorced, widowed, the entrepreneur, and the retiree. The book is peppered with to-do lists, financial myths and facts, personal stories, and loads of good advice.
While you're getting a handle on what has kept you from investing, turn to a few basic personal-finance books. An irreverent read is Jonathan Clements' 25 Myths You've Got to Avoid if You Want to Manage Your Money Right. He argues, for example, that you shouldn't keep money in a bank. He writes: "Forget savings accountsbank money market accountsshort-term certificates of deposit." Instead, have enough money in a checking account to avoid bank charges, and invest cash holdings in a money-market mutual fund.
While my 1987 trip to Nepal is still one of the highlights of my life, the memory of it is tinged with regret. Had I known then what I know now, I could have saved properly for the trip and had a bigger nest egg as well.Questions? Comments? E-mail email@example.com or fax (212) 512-2538By Toddi GutnerReturn to top
AIMED AT WOMEN...Prince Charming Isn't Coming
By Barbara Stanny
Anecdotal discussion of women's myths and fears about money and how to overcome themMoney Makeovers
By Christopher Hayes and Kate Kelly
Psychological view of how women relate to money and how to take actionErnst & Young's Financial Planning for Women
John Wiley & Sons, $16.95
Straightforward advice for women of all agesGENERAL ADVICE...Personal Finance for Dummies; Investing for Dummies
By Eric Tyson
IDG Books, $19.99 each
Well-organized, informative, and fun to read25 Myths You've Got to Avoid If You Want to Manage Your Money Right
By Jonathan Clements
Simon & Schuster, $12
Wry approach to personal finance and investingMaking the Most of Your Money
By Jane Bryant Quinn
Simon & Schuster, $30
Comprehensive but dense explanations of everything you need to knowReturn to top