The last few months (7 of them, to be exact) have been crazy, and many of us are busier than ever with work, family, and simply trying to keep our heads above water. Some of us have even been able to get around to some long back-burnered projects, catch up on our reading, or even learn a new skill or two. It’s that last one — the whole “learning a new skill” thing — that we’re diving into today. What if you could retrain your brain to tap into the power (that we all have!) to take charge of your finances and your life?
Our guest this week, Barbara Huson, is a financial therapist and wealth coach, the author of seven books, and she has spent decades writing, researching, and lecturing on the topic of women and money. We’re chatting with her about her newest book, “Rewire For Wealth: Three Steps Every Woman Can Take To Program Her Brain For Financial Success.” Although the book doesn’t hit store shelves until early 2021, we know our listeners are prioritizing self-improvement and self-love right now, and that Barbara’s pointers can help us all work our way out of a financial fog.
Barbara starts by telling us how she got her start advising women on the topic of money, and shares her personal financial journey in which she ceded financial control to her ex-husband. “I spent most of my life in a financial fog. There’s something very safe about not having to take action,” she says. Thankfully, she slowly took back that control and was able to step into the driver’s seat of her money, her life, and her career.
Jean and Barbara talk about how to “rewire” your brain for financial success, and how our mind helps to program our brain. “Our brain is programmed from the time we were little. In order to change our relationship with money, it’s important to change our thoughts, which then will, over time, reprogram the brain,” she says. In other words, we can rewire our brains by shifting our thoughts.
In her book, Barbara talks about the gap between wishing for financial control and actually achieving it, and why that gap exists for so many women. Specifically, she discusses the difference between men and women and how we approach our financial lives.
“Women and men see investing differently. Men see investing as a challenge; it excites them. Women see investing as a threat. It terrifies them, even women who are in the market. Unless they have reprogrammed their brain through a lot of education, and even then, there is a tendency to go into survival mode, and fear,” she says, articulating how we can all get past those fears and move onto bigger and better things.
Barbara also shares an example of how someone who wants to save more money can do just that — how we can train our brains to take action if we’re scared to make a move financially, whether it’s saving or investing. “That fear can usually be traced back earlier. What you want to change is the tendency to make a move in times of uncertainty,” she says.
In Mailbag, Jean tackles a listener question from a mom of three who is new to saving for retirement and is looking for the best ways to grow her funds. We also hear from a listener who is focused on how to fund her retirement while putting her two children through college. Lastly, Jean advises a woman who is divorced after a 29-year marriage with little work history of her own who’s unsure how much Social Security benefit she’ll get if she claims on her ex-husband. Lastly, in Thrive, Jean weighs in on the most essential skills you’re building while working from home — that you might not even realize you have!
Barbara Huson: (00:02)
Women and men see investing differently. Men see investing as a challenge. It excites them. Women see investing as a threat. It terrifies them. Even women who are in the market, unless they have reprogrammed their brain through a lot of education, and even then, there is a tendency to go into survivor mode in fear.
Jean Chatzky: (00:27)
HerMoney is supported by Fidelity Investments. Whether you want to get your savings back on track or you’re working toward a brand new goal, Fidelity has tips and tools to help you meet your short and long-term savings goals. Visit Fidelity.com/HerMoney to learn more.
Jean Chatzky: (00:47)
Hey everybody, I’m Jean Chatzky. Thanks so much for joining me today on HerMoney. Well, these last few months have been crazy and many of us are busier than we have ever been with work and family. And overall, just trying to keep our heads above water. But some of us have, thankfully, been able to embrace a little solitude, maybe get around to some long back-burner projects, catch up on our reading, even learn a new skill or two. And it’s that last one, the whole learning a new skill thing, that we are going to dive into today. What if you could retrain your brain to tap into the power that you have, that we all have, to truly take charge of your finances and your life. My guest today, Barbara Huson, is a financial therapist and wealth coach, the author of six, now seven, books, and she has spent decades writing and researching and lecturing on the topic of women and money. And today we are going to talk to her about some of the incredible findings from her new title, “Rewire for Wealth: Three Steps Any Woman Can Take to Program Her Brain for Financial Success.” The book won’t actually hit shelves till early 2021, but I couldn’t wait for it, especially since I’ve heard from many of you that you are really prioritizing self-improvement and self-love right now. I knew Barbara would have some unbelievable pointers for those of you who are looking to work your way out of a financial fog, or look at your money from a new perspective. Hey Barbara, thanks so much for doing this today.
Barbara Huson: (02:31)
Thanks so much, Jean. It’s so good to be here with you again.
Jean Chatzky: (02:34)
Oh, it’s my pleasure. It’s really, really nice to see you and be able to talk to you. Tell my audience a little bit about you. I mean, I’m familiar with your work for so many years, but tell us all how you got started helping women with money.
Barbara Huson: (02:52)
It’s so interesting because you know, you never know where the road’s going to take you. And if anyone had told me I’d be empowering women financially, I would’ve told them they were crazy at one point in my life. Because I didn’t understand money. I didn’t know anything about it. I came from a wealthy family. My father was the “R” of H&R Block. And the only advice he ever gave me about money was don’t worry. Don’t worry. I thought that was great advice. I didn’t want to worry about money. I just wanted to spend it. And of course, under his words was the unspoken assumption, there’ll always be a man to take care of you, which I loved. And there always was. First, there was my father and then there was my husband who was a stockbroker. So he was perfect. Right? But I found out very early in my marriage that he was a compulsive gambler. And here’s the insane part. Even though I found out many times a year, for over 15 years that we stayed married, that he was gambling my money, my inheritance, I continued to let him manage the money because that’s how terrified and intimidated I was by anything financial. And finally, after 15 years, we got a divorce and I decided money’s not my thing. I didn’t want to deal with money. Well, I have come to see that if you don’t deal with money, your money will deal with you. And in the next year, I got tax bills for way over a million dollars – for back taxes my ex didn’t pay, for illegal deals he got us in. And my signature was on everything. My ex had left the country. I did not have a million dollars, not nowhere close. My father wouldn’t lend me the money. I had three daughters. I was not going to raise those girls on the street. That’s when I knew I had to get smart. I had to. And I go to classes. It’d read books. My brain would just glaze over. But I swear, when you have a commitment, like I was committed. I was down to my toes. I was gonna get smart. If not for me, for my children. I have a belief that when you are committed, universe revolves. You reach your goal. And I was writing. I was a journalist for the San Francisco Business Times and I was hired for a freelance project to interview women who were smart with money. And those interviews changed my life. I not only got smart about money, but I wrote my first book, “Prince Charming Isn’t Coming: How Women Get Smart about Money” and suddenly I had this whole new career and six books later – seven books later now – here I am.
Jean Chatzky: (05:30)
Those women that you interviewed, I know provided the foundation for a book of yours called “Secrets of Six-Figure Women.” Do the secrets that you learned from those women still hold true today?
Barbara Huson: (05:44)
That book came later, after my Prince Charming. What happened after I wrote Prince Charming, I learned how to manage my money. I learned how wealth was created, but I didn’t know how to make it. And I was traveling all over the country, doing financial education for women and doing seminars and I couldn’t make it. And so, I started interviewing women who made lots of money. And I made six figures before I even finished writing the book. And that was a chronic under earner. And do those principles hold today? Oh yes. They definitely hold today.
Jean Chatzky: (06:16)
What does it mean to be an under earner?
Barbara Huson: (06:20)
That under earner has nothing to do with the amount you make. An under earner is anyone who earns less than she needs or desires, despite her desire to do otherwise. Despite all her efforts to do otherwise. An under earner is anyone who says, I’d love to make more money, but. You can make six figures and be an under earner. And you can make far less and not be. And my three children, they are under earners, but they are what I call mindful under earners. They are doing what they love because it feeds their soul. And they have enough money to meet their needs. Under earning never feeds your soul. It is never a conscious choice. It is always a condition of deprivation and not just of money, but of time, of joy, of choices, and most of all, of self-esteem.
Jean Chatzky: (07:12)
We’re going to dig into “Rewiring Your Brain for Wealth” in just a second. But I don’t want to leave this topic just yet.
Barbara Huson: (07:19)
Jean Chatzky: (07:19)
If you feel like you’re an under earner in the middle of a pandemic, is that something that you can do something about?
Barbara Huson: (07:27)
You can always do something. You can rarely change the external circumstances, but you can always change how you react to them. I mean, each person has their own situation. But this is a wonderful time to go within. This is a wonderful time to upgrade your skills, to start studying something, to network. It’s a great time to network. It’s a great time to do all those things that our busyness has kept us from doing. So, yes. You can always, always lay the stage for overcoming under earning.
Jean Chatzky: (08:07)
When you rewire your brain for financial success, what does that mean?
Barbara Huson: (08:12)
That’s a really good question. So, I’ve always known, ever since I wrote my book, it’s not so much what you do. It’s how you think that creates financial success. And what you do comes from what you think. And so, I’ve always been focused, as many have, on shifting our mindset. And still it was a tough slog. For me too. I mean, changing your mindset is a tough slog. There’s all this resistance that comes up. And one day, six years ago, seven years ago, I was thinking about this. I was thinking there’s something more in helping women. And of course men. I focus on women. But there was more in this process of helping people go to the next level in everything. And one day I was going through my email and this article about neuroscience came through. And I started reading it and I was like, oh wow. And that was six years, seven years ago. And I started studying neuroscience and I started adding it. And neuroscience of course, is the study of the brain. And what we’ve seen is that, I mean, there’s many theories, but the theory that really struck me is how our mind programs our brain. And our brain is programmed from the time we were little. And so, how our brain is structured is really like a scrapbook of the past. All our past beliefs. And in order to change our relationship with anything, but let’s focus here on the money. In order to change our relationship with money, it’s important to change our thoughts, which then will go over time reprogram the brain. The way you change your neuropathways is by changing your thoughts and feelings. But what’s important is the neuropathways do not want to be changed. They are stuck like glue in there and everything in you says, every time you go to do something different, everything says, no, don’t go there. Don’t do that. And so, I created over a period of four or five years system, a process, to help women rewire their brain by shifting their thoughts and distilling it down to three steps.
Jean Chatzky: (10:39)
I want to dig into those three steps and what they are – as much of it as you can give us in a short course. But before I do that, let me just remind everyone that HerMoney is proudly sponsored by Fidelity Investments. When the market is uncertain, it’s more important than ever to have a plan for your savings. And that’s where Fidelity comes in. They’ll work with you to create a savings and investment strategy and help you fine tune it whenever life changes. Plus, they have tips and online tools, like their planning and guidance center, that can help you meet your short and long-term goals. So, visit Fidelity.com/HerMoney to learn more. We are back with Barbara Huson, author of “Rewire for Wealth: Three Steps Any Woman Can Take to Program Her Brain for Financial Success.” All right. Three steps. So, what are they and maybe can you give us an example or two?
Barbara Huson: (11:36)
So, let me give you the three steps, then let me give them to you and I’ll define them.
Jean Chatzky: (11:42)
Barbara Huson: (11:42)
And then I’ll tell you an example of how to apply those three steps. And maybe, do you want to take an example from your own life, from someplace you’re stuck or having resistance?
Jean Chatzky: (11:54)
I’m always stuck and having resistance. But sure. Yeah. Let’s do it.
Barbara Huson: (11:57)
But let me give you the steps and then let’s see where we can apply this to you. Okay?
Jean Chatzky: (12:01)
Barbara Huson: (12:02)
So you just think. Okay, so the three steps are recognize, reframe and respond differently. So, do you want to start with you?
Jean Chatzky: (12:14)
You can start with me. Sure.
Barbara Huson: (12:15)
Okay. So tell me a place you’re feeling stuck or a place you want to change and you’re having a little difficulty.
Jean Chatzky: (12:21)
Besides the amount of Chardonnay that I am drinking during COVID or do you want to do the amount of Chardonnay and drinking during COVId? No, let’s think of a good example. I am feeling stuck. I’m actually feeling a little stuck growing my team. That’s not necessarily a money thing, but it is a business thing.
Barbara Huson: (12:40)
It doesn’t need to be money.
Jean Chatzky: (12:41)
Okay. All right. I’m feeling a little stuck on figuring out how to do that.
Barbara Huson: (12:45)
I would say across the board our problems with money are really not about money. There’s always something deeper underneath. So, on one hand, this is a money problem because it’s your business. So, if you can say a little bit about it because I want to hear what your role is in this and where you are having problems. And I really appreciate your being so open.
Jean Chatzky: (13:12)
No. It’s okay. I mean, I think this is what we do and this is how we learn. And our listeners are very open with me. So, we gotta, you know, it’s two way street here. I always feel like when I take on a new employee, I want to make so sure that I am going to have enough revenue to support that person for as long as they want to stay with the company. And with COVID and revenues, you know, revenues have been okay. I’m really fortunate. Our company is doing okay. But I worry about what’s around the corner.
Barbara Huson: (13:47)
So is the problem the employee and team, or your worry about the future and making plans now.
Jean Chatzky: (13:56)
That is the problem. Yes.
Barbara Huson: (13:58)
What is the problem?
Jean Chatzky: (13:59)
It’s the making plans? The worry is making plans that financially, maybe the company won’t be able to support, not knowing how we’ll grow.
Barbara Huson: (14:09)
Has this been a pattern for you? The worry when you’re in uncertainty. You have a tendency to worry.
Jean Chatzky: (14:17)
Yeah, my whole life.
Barbara Huson: (14:20)
Okay. Is this something you’d like to change?
Jean Chatzky: (14:24)
I mean, yes and no. I don’t want to be that person who hires somebody and then can’t support them two months later. I don’t want to be that person.
Barbara Huson: (14:32)
So, that’s not what you want to change. You don’t want to change your compassion and your caring in your commitment to your people. No. What I hear you may want to change is your worry about the uncertainty. Because the worry obviously is not solving it. It’s not helping you. And the reason I ask, is this something you want to change, and you don’t even have to tell me now. But if you don’t want to change something, to anyone listening, you’re not going to change it. Your brain knows you don’t want to change it. You don’t want to change it. So, I’m using that as an example.
Jean Chatzky: (15:03)
Let’s take an example that’s maybe, and I’m going to sit down on your couch and we can solve all these problems. But let’s take an example of somebody who wants to save more money.
Barbara Huson: (15:17)
I was having so much fun with you, Jean.
Jean Chatzky: (15:20)
I just want to make sure that ,universally, we give people who are listening to this podcast, what they need. You know, who wants to save more money. I know there are so many women out there who are sitting on cash in their savings accounts that they’d like to invest, but they just can’t get themselves over that hump.
Barbara Huson: (15:38)
Okay. So, if they’re scared to make a move financially. They’re scared whether it’s saving or investing or whatever it is, they’re scared to make a move. And that fear can usually be traced back earlier. Just like your worry. It can usually be traced back earlier. But what you want to change is this pattern or this tendency to be scared to make a move in times of uncertainty, let’s say. So, the first step is to recognize. Oh, I’m having a fearful thought. I’m looking at my bank account and I’m thinking, this should be in investments. I need to put this in my retirement. And yet I am scared. Isn’t that interesting? So, you recognize it, like a disinterested observer. That’s just someone out of body. Isn’t that interesting. I’m having a fearful thought. And what you’re doing then, is you are noticing it is your thought. It is not the truth. It is a thought about fear. That I’m having a thought. And what you want to do is separate yourself from the fear. The thought. And then you look at that, I’m having a fearful thought. And the second step is to reframe it. How can I see this differently? So, when you reframe something, a general way I reframe, for example, I get scared a lot. I have a lot of fear, a lot of anxiety. And so, when I get scared about doing something, I will, oh, look, I’m having a fearful thought. This is a pattern. I have fearful thoughts a lot. It’s not the truth. It doesn’t mean I am going to hell. This is dangerous. It just means I’m having a fear thought. And then I reframe it. And a really easy way to reframe is, this is an opportunity for me to rewind. This is an opportunity for me to change the fearful neuropathways in my brain that are programmed to get scared in uncertainty. And the third step is to respond differently. Not like you normally have. So, the tendency is you always want to respond to the same. You always want to look at the bank account. Oh, I should put in my retirement. Don’t respond like that. Do something different. What can you do differently? Oh, let me sign up for HerMoney newsletter and actually read it. Or let me take a course on investing. Or let me call the person at the bank and talk to them. So, find things to do. And this is how you rewire your brain. Because what happens every time you go to do something different, your brain cries out stop. It’s dangerous. You’re going to die. It’s going to be awful. Because our brain was programmed for survival from our very early ancestors. So, every time we go to do this something we haven’t done before, we are programmed for survival and we feel that we’re going to die. And what happens is our thinking brain, our rational brain, prefrontal cortex, turns off. And we want to turn that thinking brain back on and the fear response off. And you do that by responding differently over and over and over again, until the old neuropathways start kind of withering away. Weakening and weakening. And the new neuropathway gets stronger and stronger.
Jean Chatzky: (19:04)
The things you mentioned in the book is that men and women respond to financial information differently.
Barbara Huson: (19:11)
Jean Chatzky: (19:11)
Can you dig into that a little bit for us?
Barbara Huson: (19:13)
Yeah, I can. I think the thing that really struck me, there’s many ways they respond differently. For example, men are much more transaction oriented. Women are much more relationship oriented. So, when men go to a financial advisor, they want to know about the transactions. They want to know about performance. Women, they want to have a relationship with that. They want to know how this money is going to help their children. They can use it to help their community. But the thing that really struck me is they found that women and men see investing differently. Men see investing as a challenge. It excites them. Women see investing as a threat. It terrifies them. Even women who are in the market, unless they have reprogrammed their brain through a lot of education, and even then, there is a tendency to go into survivor mode in fear. And that’s what I want to change.
Jean Chatzky: (20:10)
Yeah, well it’s that fear I think that is responsible for the fact that so many of us have cash sitting in checking doing nothing, when it should be really working for us. Another concept that you dig into, there is so much. I hope that our listeners will all pick up this book and read it because there’s so much good in there. Another concept that you talk about, and I think a lot of people can relate to, is that there are people out there who are just in this financial fog, right? They’re in this financial never, never land. How do you know when you’re in it? And how do you get out of it?
Barbara Huson: (20:44)
Well, I spent 40 some years in a financial fog. And most of us in a financial fog, we don’t want to leave. We don’t want to because as uncomfortable as it feels to be in that fog, there’s something very safe about not having to take action. There’s something very safe. Usually for women, they found especially, is that it often takes a crisis to get women to get serious about finances. The loss of a job, the loss of a spouse or on the brink of retirement. And they go, oh my God, I forgot to save. And your message and my message and so many others is don’t wait for a crisis, because that’s the worst time to start making new decisions. And I think the way to motivate women to get out of a fog is not the way so many in the financial industry are doing it, which is why I love your work. It’s all towards women. It’s not to scare ’em. Not to tell them that they’re going to be responsible for their finances, you know, 90% of them, and all those things, all those awful things that could happen. It’s to tell them how, by being financially responsible, they can change their lives. They can change the lives of people they love. They can give to cause they feel passionate about. And it’s not even about money. I am so convinced that the problems with money are not about money. It’s our fear and ambivalence about power. And a woman who takes the financial reins, a woman who really takes charge of her money, she takes charge of her life. And it’s very powerful.
Jean Chatzky: (22:28)
I agree with you. The thing that’s made me feel the best in the last couple of months, sort of definitionally, is my team and I, we’re working on a book, a money book for teenage women, for young adult women. And we’ve come upon this concept of managing your money as a form of self care.
Barbara Huson: (22:49)
Jean Chatzky: (22:50)
And I had never really thought about it in those terms, but I think if we can get, particularly this generation, particularly millennials, who seem to be all about self-care, which is great. I think we should all be about self-care. But I think if we can get that message across, that’s a really good thing.
Barbara Huson: (23:09)
It is about self-care and self-love. Because no one should ever have to stay in a relationship or a job they hate or any of them because they can’t afford to leave. It’s really an act of love for others, because it’s what our money can do to help others to recreate this world. And yes, it is self-care. It is totally self-care because I’m telling you, when you take charge of your money, you feel a hell of a lot better about yourself. Like there’s no greater high.
Jean Chatzky: (23:39)
You are absolutely right. Barbara, in the interim between when this podcast launches and when the new book comes out, where do we get more access to you and all the wonderful stuff you’re doing.
Barbara Huson: (23:50)
Barbara-Huson, Barbara hyphen dash H U S O N.com. That’s my website. I’m very accessible. I would love to hear from you. Come talk to me there.
Jean Chatzky: (24:04)
Absolutely. Barbara, thank you so much.
Barbara Huson: (24:07)
Thank you. I really appreciate it. I always love talking to you.
Jean Chatzky: (24:10)
Oh, thank you. Thank you. Thank you. And we’ll be right back with Kathryn and your mailbag.
Jean Chatzky: (24:20)
And Kathryn has joined me for our mailbag. Hey Kathryn.
Kathryn Tuggle: (24:25)
Hello, Jean. That was great.
Jean Chatzky: (24:27)
Oh, it was fun to talk to her. I mean, I’ve known Barbara for a long time and some of our listeners, I’m sure will have put together the fact that Barbara’s last name used to be Stanny. When she wrote “Prince Charming Isn’t Coming,” she published it under Barbara Stanny. And so, for those of you who are trying to put things together, you’re thinking of the right woman.
Kathryn Tuggle: (24:49)
Yeah. I always love it when people dive in with you, because you’re always diving in with everybody else. And when somebody dives in with you and is getting into the nitty gritty with you, it’s always exciting for me to listen to that.
Jean Chatzky: (25:01)
Remember when Carl Richards was on the podcast and he said he was going to hijack it? That’s kind of how that felt.
Kathryn Tuggle: (25:09)
Well, not coincidentally. I loved that show too.
Jean Chatzky: (25:12)
That was a fun one. It was a fun one. Alrighty. Let’s dig in and help some other people at this point.
Kathryn Tuggle: (25:18)
Yes. Our first question comes to us from Amber. She writes, hi Jean. First and foremost, thank you for your work. I’m a 40-year-old mother of three working full time after a 10 year break to raise my children. I’ve been working steadily for three years and contribute to a 401k plan for retirement. My current contribution is 4%, which is the maximum matched by my employer. In total, the balance of my 401k is approximately $10,000. Prior to my role as a mother, I’d only worked one year after completing grad school. I currently have a state-funded retirement plan with a balance of just under a thousand dollars. Although I’m no longer employed in this role, I’ve kept this account which has received roughly $40 in interest annually since 2003. To my knowledge, I’m not eligible to continue to contribute to it. My husband has worked steadily across all these years and maintains a substantial and healthy retirement fund. This leads me to several questions for you. Number one, should I adjust my current 401k to a riskier profile since I’m late to saving for retirement? My current mix is 87% stocks, 10% bonds and 3% money market. Number two, should I continue to allow the state retirement fund to accrue a small amount of interest and leave it as it is, or pursue another method to roll over or incorporate it into my 401k? To my knowledge, a lump-sum distribution would be approximately $650 with tax consequences. Thank you for your help.
Jean Chatzky: (26:41)
Thank you so much for writing Amber. So, a couple of things about this question. A couple of ways I would probably like to see you go about handling it. The first is that because that state funded retirement plan is so small, it’s almost like an orphan 401k. If you can, with no cost and no tax impact, roll it into your current 401k, I would do that. If you are going to have to pay taxes on it, I wouldn’t do it. I would just leave it alone and let it be and let it do its thing on the side. And I would do that just for administrative ease because with such a small balance in it, it’s probably not worth that much of your time to worry about it. The second element of your question is whether you should, essentially, take more risk with your 401k in order to make up for lost time. And here, my answer is resounding no. You are already taking a lot of risk with that 401k. At 87% in stocks, you are above where I would put you if I was doing this asset allocation, which is not to say that that’s wrong. You’ve got to look at your asset allocation combined with what your husband is doing in his 401k or his retirement accounts. You should be allocating your assets as a family. And if you’ve decided as a family, that you’re going to take more risk and he’s going to take less risk and that it is all going to work its way out in the end, then I’m cool with that. If you haven’t had that conversation or made those decisions, it’s time to have them. The way we make up ground in a 401k is by trying to figure out a way to save a little bit more, not by taking more risk than we can afford to take. And that’s been my MO. That’s been my way of doing business forever. Now, I also want you to understand that at 40, you got a lot of time. You have a lot of time to make up ground. So, I don’t want you worrying about this too much, particularly because your husband is and has been saving at what sounds like a healthy rate. But as a family, I would like to see you get to the point where you are putting away at least 15% of your combined incomes, and that can include matching dollars. So, I hope that gets you on the right track and I hope that that helps.
Kathryn Tuggle: (29:15)
I think that’s perfect. I also was going to say that 40 is so young, you know. A lot of people start at 40.
Jean Chatzky: (29:22)
Yeah. Exactly. I don’t think I woke up until 40.
Kathryn Tuggle: (29:25)
Yeah. Yeah. Exactly. Our next question is from Alexandria. She writes, hi Jean. I’m a huge fan of your newsletters and podcasts and appreciate what you do for all of us. I’m a 50 year old single woman who is laser focused on trying to fund my retirement and get my two children through college. I own a Vanguard account that includes a brokerage account, a rollover IRA, 529 plans and a Roth, that I fund to the maximum allowance. I also have an employer-sponsored account that I try to fund enough to get the match. My question is that I’m currently paying Vanguard to manage my brokerage account and rollover IRA that’s about $1,824,000 combined. I know the management fees are low, but I wonder if I can do this myself. Can I teach myself to easily rebalance? I’m not really sure what benefit I’m getting besides my return rate, but I wonder if I could get the same return rate on my own. I do not deposit anything currently into these accounts. It’s just growing on interest. Thank you.
Jean Chatzky: (30:22)
So, Alexandria, I have no doubt that you could do this for yourself, but I do wonder what exactly they are doing. And I think the way to get that information is to actually ask them. Hop on the phone. I’m sure you have a designated person that you deal with and ask them what they’re doing on your behalf. And only by knowing the answer to those questions, will you be able to figure out if you can rebalance by yourself? There are many ways to rebalance these days. You can do it by hand, by looking at your asset allocation and selling things and buying others. You can do it using a robo-advisor, which all the big brokerage firms have these days built in. You don’t have to go with a stand-alone robo. And at that point, you’ll have a better sense of whether or not this is a task that you want to devote your time and your energy and your resources to. You’ll also have a better sense of what you’re getting versus what you’re paying. And I think that’s really important. I do see reading through the lines here that you are a woman with a lot on your plate. You’re trying to get two kids through college, trying to fund your own retirement. I wouldn’t mind if you sat down with a more holistic financial advisor, if you took the time to chart out what your goals are for the next 10 years, 20 years, 30 years, and then make sure that these considerable resources that you have managed to pull together are working for you in a way that they’re absolutely, without question, going to get you there. This is not somebody that you have to have on your payroll forever. I’ve said this before. You can do a one and done kind of a financial physical with a financial advisor. But I do think particularly with assets of this size, it’s really important to do a sanity check every once in a while. And the last thing that I would say here is that you wrote in your letter that you also have an employer-sponsored account that you try to fund enough to get the match. With assets of the size, you should absolutely be grabbing the match. I think there’s no reason for you to be leaving any free money on the table. So, at the very least, I would try to make sure that you’re doing that year in and year out.
Kathryn Tuggle: (33:08)
Yep. Absolutely. The best advice out there. Free money.
Jean Chatzky: (33:12)
Free money. Just take it.
Kathryn Tuggle: (33:15)
Our last question is from an anonymous listener. She writes, I’m a loyal podcast listener and often share your knowledge with my two grown daughters. I’m planning for my retirement in 10 years. My dilemma surrounds knowing what my likely social security benefit would be at retirement age. My impediment is that I’m divorced after a 29 year marriage with little work history of my own. I realized that if I’m not remarried when I reach retirement age, I can collect half of my husband’s benefit with no reduction for him. For planning purposes, I would like to know what that monthly benefit number would be for me. What steps do you suggest I take to learn that vital information, so that I can plan for my retirement in a responsible way.
Jean Chatzky: (33:53)
You should absolutely know what you can receive from your former husband’s benefits. And you’re absolutely right. You’re totally entitled. This is a very easy answer actually. Call the Social Security Administration. You may need your former husband’s social security number. I hope you have it. Even if you don’t, give them a call anyway. And they should be able to fill you in to what he is going to receive and what you can receive as a result. It should not be a difficult conversation. I do know that the lines at Social Security are often long, and the hold times are often long. So, just listen when the recording tells you to call back at a particular time of day, because you are more likely to get through during those less busy times. But you should absolutely have this information because it’s information that you need to plan your future. And good luck with that.
Kathryn Tuggle: (34:55)
Well, if he’s still working, and he is still several years away from retirement, how will she know what that benefit might be after he completes those like higher-earning years at the end of his career.
Jean Chatzky: (35:07)
Chances are he’s already in those high-earning years and has been for awhile just based on the length of the marriage. And so, I expect that she’ll be able, she’s not going to be able to get an exact dollar number, but she should be able to get fairly close. And once she does that, then she has at least a basis of information on which to plan the rest of her financial life, which I think is exactly what she’s asking for.
Kathryn Tuggle: (35:38)
Right. No, that’s a good point. She can probably get within a hundred dollars a month of what she’s going to get.
Jean Chatzky: (35:44)
Exactly, exactly. But trying to make these plans without having this information at all. I completely understand why that would make you really anxious or nervous because how do you plan when you have no idea how much money is going to be coming in?
Kathryn Tuggle: (35:57)
Jean Chatzky: (35:58)
So, call sooner rather than later. And thank you so much for the question. Thanks, Kathryn, for the mailbag.
Kathryn Tuggle: (36:03)
Jean Chatzky: (36:05)
In today’s thrive, the most essential skills you’re building while working from home. These days, it’s pretty easy to feel disconnected from work or think of these months as quote, not part of your real job, unquote, but experience is experience. And this widespread experiment in remote working can translate to concrete skills for tangible career growth. This week at HerMoney, we’ve got a roundup of the most actionable career skills you may have reinforced over the past few months. So let’s look at some of our favorites. First on the list, communication. Since most workers aren’t able to interact in person during this time, they’ve had to hone communication skills in other areas, like email response time and zoom call etiquette. In the age of COVID-19, verbal and written communication skills are paramount. We’ve all had to get creative in finding ways to connect and be persuasive without using any of our typical in-person communication strategies. Second, time management. The stress and uncertainty that comes along with a global pandemic, along with our ever-demanding responsibilities to family, have made time management more difficult than usual. But, stop and think about all the ways in which you’ve approached your daily schedule with renewed resolve, listened to yourself and attempted to work smarter rather than harder. You’ve been building a strong time-management muscle that you might not have even realized was there. And productivity. In your next cover letter, interview or review session, describe how you figured out your own work from home rhythm, how you set the priority levels of different projects, how you separated professional and personal time, doubled as your own manager or solved your own day to day problems. My guess is that you’ve done more than one of these over the past few months. And these are skills that will be welcome no matter what the next step in your career happens to be. Thanks so much for joining me today on HerMoney. Thank you to Barbara Huson for chatting with us about how we can really get to the bottom of some of our money decisions and helping us retrain our brains to save more and make smarter financial decisions overall. I am absolutely in for some of her suggestions. If you like what you hear, I hope you’ll subscribe to our show at Apple podcasts. Leave us a review because we love hearing what you think. We also want to thank our sponsor Fidelity. We record this podcast out of CDM Sound Studios. Our music is provided by Video Helper and our show comes to you through Megaphone. Thanks for joining us. We’ll talk soon.