Smart Money Podcast: Unlock Financial Opportunities for Women: Jean Chatzky on Investing, Negotiating, and More

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Understand the challenges and opportunities women face in the personal finance space, including salary negotiation and investing strategies.

What financial challenges do women uniquely face? How can people find financial peace in a stressful world? Hosts Sean Pyles and Sara Rathner share some “money hot takes” before turning the conversation towards addressing the unique financial hurdles women face. HerMoney podcast host Jean Chatzky joins Sean to discuss the impact of the gender pay gap and caregiving responsibilities on women’s financial security, the strengths women bring to investing, and practical strategies for negotiating better salaries and investing confidently.

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Hey, Sean, are you ready to shake your fist at a cloud?

Oh, absolutely. Let the airing of grievances begin.

I haven’t even started to complain yet, and I feel better already. So welcome to NerdWallet’s Smart Money Podcast. I’m Sara Rathner.

And I’m Sean Pyles. This episode I talk with personal finance journalist and host of the HerMoney podcast, Jean Chatzky, about the unique challenges and opportunities that women face when managing their money.

But first, it’s time for our semi-regular segment on Money Hot Takes where Sean and I each have 100 seconds to vent about whatever is bugging us in the world of personal finance or share a counterintuitive thought about managing money. So Sean, are you ready? I’ve got my timer handy.

My Money hot Take is that sometimes it is good to be bad with your budget. So I’m freshly back from my vacation in Chicago, which was wonderful, but as you might imagine, a little costly. I had a lot of very fancy meals and very late nights out where I bought many beverages, and I got to thinking over the course of my week in Chicago about how we sometimes throw our financial caution to the wind when we’re traveling. And I realized that maybe it’s not such a bad thing. So for context, I’ve noticed that I sometimes go through different phases of managing my budget. Sometimes I will tightly control every penny, and then I will swing really far in the other direction and overspend. And it’s kind of like I am rebelling against myself and the rules that I put in place to rein in my spending.

So I am advocating for more intentional moments where you’re a little looser with your financial rules so that you can enjoy your life or your vacation a little more without all of the hand wringing about how you’re not doing what you are supposed to be doing with your money. And part of why I’m thinking about this is because there’s a lot of guilt and shame around money, especially if you aren’t following specific rules that you are quote, unquote, “supposed to be following” or you’re not working toward building a specific type of lifestyle. But guess what? We are all just a bunch of emotional animals doing our best to live in a very difficult world. And if one month out of the year you aren’t being an ultra finance maximizer, I think that’s probably a good thing. Now, to be clear, I’m not saying that people should go into debt for unnecessary purchases or be totally reckless with their spending. Oh, I’m going to finish up. I’m almost done.

But you do have to be an adult and realize that there are consequences of breaking rules. For me, that means I’m not going to be able to save as much money this month. But I can tell you that letting loose a little bit was totally worth it. I had a great time in Chicago, and really my bottom line is that rigidity can be damaging and we all need to live a little.

Yeah, we have to loosen the rules just like we loosen the rules about 100 seconds for the purposes of this rant, because you know what? It’s our podcast and time works the way we want it to. But yeah, I agree. Obviously, you’ve got to keep your eye on your money in general so you know that you have the funds available to afford the things you need, and then cover those things and then know what money you have available for the things that are fun. And you hear those stories of people who live these unbelievably frugal lives and then they die with $10 million in the bank. They could have loosened the reins a little bit and died with $5 million in the bank and it would’ve been a happier life. And then you still have $5 million to pass on to your loved ones or charity or whatever.

Yeah, you can’t take this stuff with you. You want to pass it on to your loved ones, make sure they’re taken care of, but at the end of the day, are you going to be able to take $10 million to wherever we’re going after this?

I mean, you could stuff your casket with gold bars, but where’s the fun in that?

Yeah, right. You’re inviting grave robbers to pillage your site. Anyway, so Sara, are you ready for your Money Hot take?

All right, I’m going to talk fast because I’m full of rage. All right.

Start in three, two, one, go.

All right. My beef is with employee benefits. It’s not that I’m not thankful to have them, but I think that too many essential needs are tied to your employer and they are only available and only have to be provided if your employer meets certain qualifications or they offer them voluntarily.

So the required stuff are social security, Medicare, federal and state unemployment insurance and workers’ compensation. But all these things we take for granted, like health insurance, 401Ks with employer matches and paid sick time. Those are not actually required of all employers. And if your company has 50 or fewer full-time employees, they don’t have to provide health insurance. Nothing. There’s no rule mandating employer-sponsored retirement plans. There’s no federal requirement for employers to provide paid sick leave, although some states do have these requirements. And then we haven’t even touched the Family Medical Leave Act, which just doesn’t go far enough. Only 56% of American workers were actually eligible for FMLA according to a 2020 Department of Labor survey. So that’s just over half of Americans. That’s not a lot.

And here’s the thing, companies can and do choose to go above and beyond when it comes to benefits they offer. You see this in certain industries like tech, but what it does is it creates these additional class levels where workers in certain industries get amazing benefits and other workers have to show up to work with food poisoning so they don’t miss out on a day’s wages. And I think that these benefits should be more uniformly available to workers and independent of their employers. So you’re not afraid to job hop. You’re not afraid to leave a toxic work environment because you’re not going to lose your health insurance or other benefits if you do. And that means that, this is being controversial, guys, but I think the federal government actually needs to provide more of these things so workers can-

And we’re at 100 seconds, but I’ll let you finish up.

Thank you. Where was I? The federal government should provide more of this stuff so workers can carry these same benefits from job to job no matter where they work, where they are located geographically, how big of the company they work for, any of that. And I know, okay, there are going to be people listening who are opposed to bigger government, and I respect that, but imagine if you weren’t afraid to leave your job because of the health insurance, because of the retirement benefits. Imagine if you had the freedom to be a contract worker or a freelancer without having to be married to someone who can get you on their health insurance plan. And imagine being able to take ample, fully paid parental leave even if you haven’t been at your job for a year, which is one of the limitations of FMLA. So that is what has been living rent-free in my mind. What do you think, Sean? I’m out of breath.

Yeah, that was a marathon. You did great, okay. You’re getting at something that I think about a lot in the personal finance space. Our jobs as Nerds and people working in the finance industry is to help people make the most of their money so they can get what they want out of these little lives that we all have. But time and time again, people are confronted with massive systemic issues that can make accomplishing even simple goals difficult, if not impossible. So I mean, I’m right there with you. The employee benefit situation in this country is pretty wack, not how I would design a system. But we, as personal finance journalists, podcasters, et cetera, we can encourage people to do their best given their circumstances. That means having a reasonable budget, working to make the life that you want with your loved ones, working to enact systemic change that you want by engaging with the political system through contacting your representatives. And importantly, voting.

Yes, definitely trying to enact change by contacting your representatives at every level in government, whether it’s local or federal, is a wonderful way to use your time and your energy. And yes, to an extent, do what you can, given your limitations and given your circumstances. But what I don’t want to do is say, “Well, all you can do is the best you can do, bootstraps,” because these systemic issues are making it very difficult for so many people to get ahead and have the lives that they want to live. Anyway, since I am so incensed, I think that’s a wrap on our Money Hot Takes. So let’s turn to our Nerdy question of the month, which is, what is the most interesting or unique and legal thing that you’ve done to increase your income? We don’t want to hear about your weed farms, guys.

Yes. Well, in some states that is perfectly legal, Sara.

That’s true, in which case, feel free to share.

I say from Washington and Oregon, yes. Well, here is one submission that a listener texted us on the Nerd hotline. They said “I run my basement and vacation home as Airbnb’s. After initial setup, both have required very little work, the earnings cover all costs for the vacation home, and about half of my mortgage from my main house.”

And here’s another one from a listener named Lauren who sent us an email. “Hi, Smart Money. I went to college at a major research university and there was always a lab or research team looking for human subjects for a few bucks. I would play computer games, take surveys, give DNA samples, etc. I’m not sure it’s enough to call it a side hustle. I had a more legit work study job, but I would make a few bucks a week, enough to occasionally buy a meal from somewhere other than the college dining hall. But I once earned $200 and a free 23andMe account, and all I had to do was get an MRI and do a personality test. That was a lot of money for me as a broke college student. Thanks. Love the pod, Lauren.”

Nice. Oh, I love to hear that. $200 as a college student is an enormous sum of money, I say as someone who was very broke in college. So that is so cool.

I will say as somebody with claustrophobia, $200 to take an MRI is probably not enough money for me, but you do you and Lauren, I’m glad that you found a really fun and unique way to make some extra money.

All right, so listeners, tell us what is your interesting, funny, or maybe a little weird way that you’ve increased your income. Call or text us on the Nerd Hotline at 901-730-6373. That’s 901-730-N-E-R-D or email us at [email protected]. We might just share your story on a future episode.

Now let’s get to my conversation with Jean Chatzky about women and money after a quick break. Stay with us.

I’m joined this episode by Jean Chatzky, personal finance journalist, founder of the personal finance platform HerMoney and host of the HerMoney podcast. Jean, welcome to Smart Money.

Thanks so much for having me. It’s nice to be with you.

It’s great to have you on. So I want to start by talking about the why behind HerMoney. On your website, you mentioned that your content is for readers of all genders, including those who don’t subscribe to one specific gender, but that it’s important to have gendered content that is for women specifically. And some people listening might wonder why in 2024 we need to have content categorized in this way. So can you explain why this is still an important area in the personal finance space?

Yeah, absolutely. Women still face challenges that men don’t face. We still have a massive pay gap in this country. It’s bigger for women of color than it is for White women, who earn 82 cents on the dollar for every dollar that a man earns. Women are still the ones who take breaks from work to care for kids, to care for older parents. We saw that in spades during the pandemic, but it has continued and those things put us behind when it comes to amassing money for retirement and racking up social security credits. And then we go on to outlive men by about six years, which means that we have to take that money, that smaller amount of money and make it last a longer period of time. And there are other differences too. If you look at student loan debt, women hold a greater proportion of student loan debt. If you look at investing, we’re really good at it, but we tend to come to the party a little bit later than men. All of those things are things that need to be addressed.

And to your point earlier about women living around six years longer than men, they have to plan for that much more in retirement. So what does that mean in terms of projected retirement savings, the amount that they’ll be able to spend in retirement and how they have to save for that today. It’s just quite a lot to grapple with.

It absolutely is a lot to grapple with, and I think this is where making sure that you have the right sources of information throughout your lifetime becomes really important. NerdWallet has been an important source of information for me and for the folks at HerMoney. They can come through our employers, they can come from financial advisors. The most important thing is getting on a trajectory where you’re saving enough on a consistent basis, and I like to see 15% year in and year out, which can include matching dollars from an employer, and then investing that money so that it is really working for you as hard as you’re working for yourself. One of the things that we still see women doing is leaving far too much of our money in cash, which feels safe, but actually isn’t when it comes to keeping up with inflation and taxes and the growth that we need to sustain us through those extra years.

Mm-hmm. I also think it’s worth pointing out that being a woman or a gay man or any underrepresented minority doesn’t mean that you are inherently less able to navigate finances by virtue of your identity, but that some of the challenges that we face in society do make it more difficult for us to thrive financially, be that through lack of resources, opportunities or discrimination. So how do you think that financial education can help people overcome this?

I think financial education gives us the building blocks that we need to be confident in making the decisions that we know we need to make. Sometimes the world of money is one where we feel like we don’t have enough information to proceed. And just hearing the message over and over again that historically over time the markets have gone up. If you invest in a diversified low cost portfolio through a target date fund or through some index funds or ETFs that are very broad and that keep expenses low and you just keep doing it, you are going to be okay. In fact, you’re going to be more than okay. You’re going to be able to meet your goals, but without that education to give you the nudge to do it and know that you’re doing it correctly and know that there isn’t a perfect answer that you’re missing, it’s more difficult to get over the starting line.

I do want to talk about a challenge that I run into as a creator in the personal finance space, which is that there is a disconnect that I experience between trying to give people empowering information and resources to better their lives while realizing that there really is only so much that we, as individuals, can do in the face of bigger structural challenges like the gender pay gap or the fact that LGBTQ Americans are more likely to have less in savings and are unbanked at higher rates than other Americans. I’d love to hear how you grapple with this in your own work and any solutions that you’ve maybe come to because I’m still working through this.

I hear you and I agree with you. It is incredibly frustrating that there are still these societal challenges for LGBTQ Americans, for women, for women of color. That we know that these challenges not only exist, but have existed for decades and we don’t seem to be able to make headway, is just a huge piece of frustrating information that I sit with on a day-to-day basis. And what I come back to is that just like I can’t control the economy, I can’t control interest rates, I can’t control the markets, I can’t control inflation, I can, to some degree, control my own personal economy. That means the amount I spend, it means how and whether I choose to invest, it means, to a lesser but important degree, how much I choose to work and how much I choose to earn.

And I think you have to revert, Sean, to controlling those things that you can control and doing your best not to allow the others to drive you crazy. Because if we go down a spiral of frustration at all of these societal factors that we really can’t maneuver, then we lose the limited amount of willpower and energy that we have to focus on our own personal situations. And so I’m a control what you can control kind of a person.

And sometimes that means voting for policies that will hopefully mitigate these issues over time.

Yes, I put that in the column of things that I can do while I’m simultaneously managing my budget, keeping a lid on my credit card debt, making sure that my credit score is as high as possible so that I can borrow at the best rates, thinking about the purchases that I make and the way that I choose to live my life and the decisions that I have control over.

It’s been interesting over the past few years, I would say probably since 2020, seeing an evolution in people’s thinking about how there was this, for lack of a better term, girl boss mentality before where it was like, “Yes, you can have the career, you can have the family, you can do all of it, you just have to really hustle for it.” And I’ve seen among my friend group this realization that you really can’t spread yourself too thin. Have you seen a similar change of people realizing that look, it actually is impossible to have it all, as they say, and people are prioritizing and getting more specific about what they do really want to spend their time and their life working on?

I’m smiling because I never believed that. I think that this whole idea of balance is a complete crock. There are some days that I am good at home. There are some days that I am good at work. There are no days that I’m good at both. I’m on the other side of my caretaking arc these days. My mom has not been well and I’ve spent the last three weeks in the hospital with her and I’m not getting a lot of work done. And that is okay right now. That is the choice that I need to make and that I want to make, by the way.

The one thing that I do want to push back on is this notion of stepping back from the workforce completely. I agree with you that if this is something that you want to do and you have the resources to be able to do it, that is amazing. But I also, at now, almost 60 years old, I’ve seen the other side of that. I’ve seen a lot of women who I went through college with take that path and then face a lot of frustration that they were not able to get back in without really compromising on seniority or salary or other things that they didn’t feel that they should have needed to compromise on.

And so when I talked to my daughter who’s in her 20’s and her friends about these decisions that they’re going to face in the future, I really urge them to try to maintain at least a small foothold in their careers if it is something that they think that they may want to come back to at some point. And for people who make the decision on finances alone, who look at, “Well, gosh, it’s going to cost me as much to pay for caregiving as I’m earning. Why should I work?” It’s not just the cost. It again, it’s those social security credits, it’s the 401k contributions, it’s the network and it’s the seniority, and you’ve got to think of the whole package.

Well, I want to turn to investing. So I know that you believe that women can make better investors than men. I would love to hear what you mean by that and also how I can overcome my gender deficiency in this space.

Okay, so I am not suggesting that all men are deficient, nor is this an opinion. This is fact-based, at least fact-based on research. So there’ve been a couple of big studies, one done by a professor named Terry Odean years ago at UC Santa Barbara, another done decades later by Fidelity that showed that women outperform men when it comes to our investments. And the reason that we do is largely because we don’t trade as often. Men are more likely to meddle, they’re more likely to trade around. Being a buy and hold investor, at least over the past few decades, has been a better way to consistently make more money. Because sometimes when we sell, we sell at the wrong times. Sometimes when we buy, we buy at the wrong times. But if you followed the trajectory of the markets overall, you’ve seen that the tide has just risen. And so that is why women have outperformed men.

As I said a little bit earlier, the problem that women tend to have is that we are sometimes a little bit late to the party, which is why at HerMoney we now run an investing club for women. It’s called InvestingFixx. We spell it with two Xs just to make it difficult. But every other Monday night on Zoom, my friend Karen Finerman from CNBC and I are teaching women to invest. We are teaching how to build a portfolio. We’re doing fundamental analysis of individual stocks and ETFs and bonds, which is really, really fun. And we’re boosting confidence along the way, as well as making money for some of the women who’ve bought the things in our portfolio for their own accounts.

Oh, that’s great to hear. It’s also reassuring because I’m a buy and hold type investor. We talk a lot on Smart Money about how people who are active investors lose money at much greater rates than those who are just buy and hold investors. So keep on keeping on, those buy and hold people.

So I’m also wondering what you see, beyond being better investors, as unique financial opportunities that women have that maybe they’re not aware of?

Negotiating is a big one. It’s one of those things that not enough women have done over time for ourselves and our salaries. I think it’s so interesting. We’re so willing to go to bat for other people, for our employees, for our friends, for our colleagues, for our kids. When it comes to going to bat for more money for ourselves, we tend to hold back a bit, whether that is raising our rates if we’re entrepreneurs or negotiating for a raise if we’re employees. So I think that that’s a really big opportunity that women have. I think that women these days have very much the same opportunities that men have. We want to start businesses, we are starting businesses. We want to change the world by giving to the causes that we believe in, we are doing a great job at that as well. So I think that the goal here has to be figure out what you want as an individual and then plot out the steps to go after it.

And that’s so true when it comes to money across the board. We talk a lot about how money is merely a tool to get what you want in life. It’s not this nebulous scary thing. It is something you can deploy with intent to have the experiences and the memories that you want to create in this life that we do have. And I think that can sometimes get lost in conversations around money, which can be almost overly tactical and full of jargon around which high yield savings account or which target date fund you need to invest in. Whereas this is really something that you should be thinking about holistically as it relates to every aspect of your life.

Yeah, I think that’s great relationship advice as well. A lot of people talk about how money ruins marriages and how money ruins relationships and makes relationships really difficult because sometimes we marry or are with our financial opposites, and that is true. But what you were just talking about, the figuring out what you want and then how the money that you have at your disposal can help you get that, that’s the romantic part of money. That is the dreaming together part of money. And I think if more couples would allow themselves to do a little more of that, then it would be easier for them to maneuver their financial lives.

I’m wondering why people don’t do more of that. I think maybe people just see the number in their checking account and think, “I can’t dream beyond that,” when in fact there’s so much more to imagine.

People are still really scared of numbers. Numbers tend to be limiting, I think, to our beliefs and to our abilities to dream, because we look at those numbers in our checking accounts and we think, “Well, how am I ever going to get there and why should I even bring it up? If I bring it up, I’m just putting it out there to be disappointed down the road.” But what we need to understand is that these are all long-term things, and unless we allow ourselves to figure out what the next dream is, we’re not ever going to get there. If we can put it out there, then we can start… I mean, I’m not a very big woo-woo person. I tend to be a little bit more, a lot more practical. I like the numbers. For people who believe in manifestation, this is just manifestation with evidence. It’s manifestation with a little bit of data to back it up.

You know what’s funny is that I, like you, am very practical and not very woo-woo. But the more that I’ve been working in the personal finance space, the more woo-woo I have become because I do think that the dreaming aspect of it, the understanding your motivations, the knowing your why is such a crucial part to accomplishing anything with your money.

I think you’re right. All of that stuff though, I don’t know that I think of that stuff as particularly woo-woo. I think of it as, to me, that’s the stuff that makes sense. I think we dream first and we attach numbers to it second. Figure out what it is. What is it that you want? Then figure out what it costs. Then figure out, “Okay, if I have this amount of time between myself and when I want to achieve that goal, whether it’s 18 years to get a baby to college, or whether it’s six months to get myself to Costa Rica, I can break it down. I can figure out how much I need to contribute on a weekly, monthly paycheck basis to get myself there.”

Well, I do want to turn to something that might seem a little woo-woo. You’re interested in the idea of financial peace, so I would love to hear how you define this and what steps we can all take to achieve a sort of financial enlightenment, if you will.

So to me, peace isn’t really enlightenment. I define financial peace as the absence of financial stress when we can control it and the tools to deal with it when we can’t. Financial stress is huge. It makes us physically ill. It’s the reason that employers are now embarking on financial wellness programs to help the people in their companies bring it down because financial stress has just gotten so bad. And financial peace is taking that financial stress down a notch. There are some, again, research tested ways to lessen financial stress. Number one, you should be saving 10% on a pretty consistent basis. You should have an emergency fund. You should be at least working on your high interest rate debt, if not eliminating it completely. High interest rate debt is the thing that stresses us out more than anything. And you should have a plan. And a plan is really just what we were talking about a second ago. It’s just what do I want and when do I want it, and how am I going to get there?

Well, Jean Chatzky, thank you so much for joining us on Smart Money.

That’s all we have for this episode. Remember, listener, that we are here for you and your money questions. So turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-N-E-R-D. You can also email us at [email protected].. Visit nerdwallet.com/podcast for more info on this episode. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio, to automatically download new episodes. This episode was produced by Tess Vigeland. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all their help.