An annoying email I got

October 24 114 Comments latest by IUnderstand

Nathan writes:

This is nothing personal against you, because every personal finance author I’ve read says the same thing, but your advice is not for real people like me. The “spend less, save more” theory is great for singles or young married couples with no kids (and therefore, fewer attachments, expenses, etc.) I’m 30 years old, married, with two children. I make a very good wage for a 30-year old, but after a mortgage, two car payments, a wife who is a full-time student herself, daycare, and (many) other various utilities, activities, etc. there’s not much left for saving.

Granted, things will be better in a couple years when my wife is done with school and we’re back to being a dual income household. But all you personal finance gurus are people who have graduated from Stanford (or some other 1st tier school) and worked your way into a high paying, high end job. You represent about 0.01% of the population. Not that I hold that against you–I wish I had been that successful. But I need some other strategies to help me get my finances in order.

My response:

So what’s the alternative? Throw your hands up and say, ‘I give up — there’s nothing I can do’? Or are there small, systematic ways you can save more, invest more, earn more, and spend money in a conscious way?

I also pointed him to The Shrug Effect. He wrote back:

I think you miss my point. At no time did I resent your success and doubt that I ever could have done that. Had I had differing priorities in my younger days, I’m sure I would be in a much different position than I’m in now. But I chose to get married, have children, and support a wife’s dream of medical school, among other things.

[…]

My whole point, which you missed, was that most of the the personal finance articles available are not geared towards people in my situation.

Huh? I’m not the only personal-finance writer online — there are lots of other people who write about getting out of debt, frugality, etc. My response:

This is an interesting discussion so I’d like to continue on it for a minute, if it’s ok with you.

I understand your point, but I’ve seen thousands of articles about people in your situation. Few, very few articles, are geared towards young people who have everything together. Most of the articles are about how to get out of debt, how to spend less, etc.

I’m curious: Exactly what kind of advice are you looking for?

He didn’t respond, so I re-pinged him a couple days later. His final response:

After sitting on this a while, I realize that there isn’t really any advice I can be given. I want to–and do, for the most part–give my wife and kids whatever they want. Until I stop doing that, the whole saving more, spending less thing won’t work for me.

I think that’s very perceptive of him to realize that there isn’t really any advice he would listen to. Notice how at first he didn’t think any personal-finance advice was relevant for him (even though there are millions of articles online for every conceivable situation). Could the problem have been him, not the advice? Answer: Yes. So here are my thoughts.

1. If you don’t say no to things, your life is guided by external priorities, not your own.

• If you don’t say no at work, you’re going to be resentful of your workload
• If you don’t say no to going out all the time, it’s going to be tough to save money
• If you don’t say no to your family sometimes, you’re not going to be able to save, much less grow your money

2. Ordinary actions get ordinary results. Look around. Do you see many rich people around you? No, because they are behaving in predictably ordinary ways: Not knowing how much they spend, not being conscious about where their money goes, and not setting investing goals. Want an easy way to see this? Go ask your friends who just went on vacation (or bought a new handbag or iPhone or whatever) this: “Wow, that’s awesome. How long did you save to be able to buy that?” Their reaction will be priceless, as if the antagonist from Saw II is holding their head in a vise and ordering them to look at the moon while opening their mouth. Try it.

As always, there are no secrets to personal finance. Fundamentally, you can either cut costs or make more money. When I say that, people roll their eyes, but they fail to dig into each part. Cut costs? That means saying no. That means being merciless with budgeting and negotiating and making smart purchases for the long term. Make more money? That means entrepreneurship, working two jobs, or asking for a raise.

The whole point of this site is that getting rich doesn’t happen to you. You make it happen. Until you step up, nothing will change.

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114 Comments latest by IUnderstand

Look how men’s and women’s magazines write about money

October 18 62 Comments latest by Katt

I read Oprah’s magazine once in a while. Yes, I said it. And my jaw drops when I see an article like the recent, “25 things you don’t have to worry about.” What? Why do I need a magazine to tell me what I don’t need to worry about?

But I’m not the target audience. It turns out men and women’s magazines are very different in the way they present money. Whether that’s good or bad is the subject of a guest post by Nina Smith from Queercents. I love how she’s used excerpts to point out the differences in how men’s and women’s magazines write about money.

-Ramit

* * *

Investment advice comes in all shapes and sizes. Grab a few back issues of Esquire and a quick scan of its “investing” columns reveals “investing” advice. For example, they give opinions on buying Wal-Mart, selling Apple, and buying the Baby Bells vs. Cable Companies.

But do the same with O, the Oprah Magazine and this is what the editors categorize as “investing”:

• How to buy life insurance
• The basics of financial planning and investing
• Home finance basics everyone should know
• Know how much home you can afford
• How to play rollover with your 401(k)

So here’s my Aha! moment: why do men get “investing” advice in their magazines and we get financial basics in ours?

Women get touchy-feely encouragement
Suze Orman is an O Magazine columnist and typically I like her advice. She’s spot on when it comes to buying a used car and term life insurance. But when speaking to women, is she talking down to us?

Case in point: look at what she says about establishing a rainy day fund in this O article. She writes, “Ideally, you will have eight months of living expenses stashed in a savings account. I know that sounds daunting, but make it a goal. Start putting away a little each month. Every penny you save is a step toward building your own personal insurance plan.”

Ahem… “I know that sounds daunting but make it a goal.”

Would a male personal finance expert ever instruct a man this way?

Men get hard-hitting advice
Ken Kurson, the columnist at Esquire and author of The Green Magazine Guide to Personal Finance: A No B.S. Money Book for Your Twenties and Thirties writes, “You’re keeping your emergency cash in a money market fund. In other words, don’t fund the expansion of your portfolio into stocks and bonds with the money you’re keeping on reserve, but feel free to consider that money part of your portfolio.”

See the difference? First let’s consider the demographics of O Magazine: The median age is 45, readership is predictably female (91%), married (66%), and a median household income of $88,000. Their readers aren’t exactly females fresh out of college.

So Orman is encouraging forty year old women to make sure they have an emergency fund and Kurson assumes twentysomething guys already have a stash in reserve. Perhaps this is why CNBC gets Jim Cramer and The Today Show has Jean Chatzky.

A commenter at BloggingStocks had this analysis of Orman’s writings by saying, “When someone is talking to me about money, I want math. I bought one of Suze’s books and when she started talking about how I ‘felt’ about my money, I put the book down in disgust. Behavior patterns as applied to money fall under psychology; everything else is quantifiable. I don’t need to have a good relationship with my money; I need to understand how the stock market, the housing market and my 401K work.”

Gender-specific behaviors with money
But do female money experts talk down to us or are we inviting the tone by behavior? After all, according to Manisha Thakor and Sharon Kedar, authors of On My Own Two Feet, the average woman between ages 24 and 35 has only $500 in savings.

Woman’s Day acts like their readers only have $500 in savings as well and I don’t know any women under fifty subscribing to that magazine. Mary Hunt is their columnist and a quick glance at her 2007 columns reveal topics like “Big Online Bargains” and “Slash Your Food Bills”.

Kay Bell, the blogger at Don’t Mess with Taxes, gives her perception on the male vs. female financial behaviors. She writes, “Even today, some gender-specific societal expectations manage to persist… That is, a lot of women take a more ‘supportive’ fiscal approach, focusing on money maintenance, holding on to what they have, instead of taking steps to advance it.”

“We need to get over that right now and get more aggressive when it comes to money – making it, saving it, investing it. The go-for-it approach seems to be more typical of male financial bloggers. Men, at least in my anecdotal observations, are more apt to be risk takers with their money. They embrace the idea that to make more money you sometimes have to take some financial risks with what you’ve got.”

And it’s not just Oprah
I couldn’t find any money advice in InStyle magazine, but they offer plenty of ideas on how to spend it. Glamour claims to have a money expert, but the only thing I could find was an online debt quiz. Take it and see how you stack up with their readers. If you’re a regular follower of personal finance blogs then it’s likely you’re way of ahead of these well-heeled and in style consumers.

Just to be fair and balanced, I reviewed some other men’s magazines and money was either missing or sexualized and presented by young, attractive female writers. Check out the article by Anya Kamenetz in Men’s Health called, 7 Financial Habits of Highly Laid Men. Enough said – otherwise this might segue into a different discussion.

But maybe money is missing from general interest magazines because men go to the source for their financial advice by subscribing to the money periodicals. As an example here is the male / female readership break down for Fortune and Money:

Money: Male/Female (64% / 36%)
Fortune: Male/Female (79% / 21%)

And guess who is reading The Wall Street Journal and Financial Times?

Money spends the same whether it’s carried in a purse or wallet
So does tone and depth of the advice really matter? In the end, money is money and basic truths are better than nothing at all. But if empowerment and financial independence are what Suze Orman wants for the ladies, then maybe it’s time to butch up the advice. Don’t sugarcoat or wrap it in a soft, pretty package. We’re ready to take it like a man! That’s how you turn women savers into women investors!

Finally, for the sake of starting a conversation below, do you agree that women get fed the softer side of money from women’s magazines? Or will some of you accuse me of gender-generalizing? If you agree, then what should we do about it? Write to Oprah? Or just subscribe to Fortune and Money like the big boys?

—————
Nina blogs about money at Queercents.

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62 Comments latest by Katt

1. Answer surveys 2. Be in my book 3. Get famous

October 12 13 Comments latest by evie

At least one of the three points in the title of this point is a lie.

Anyway, below are some new surveys below for a chance to share your story in my upcoming book, published in 2008. If your story is selected, you’ll be fully credited in the book, which will make your mom and dad so happy. IT’S THE CHANCE OF A LIFETIME!!!!!

Please leave your contact info. There were some awesome stories submitted last week by people who didn’t realize that I need contact info to include their stories. This is rather like mailing in a $10m winning lottery ticket and chicken-scratching “SEND ME THE MONEY!!!” on the back…without a return address. If you don’t submit contact info, I won’t include you!

Tip: Start at the bottom and work your way up for the best chance of inclusion. Most people will click on the top ones = so your probability of inclusion is better on the more-ignored questions.

Questions about saving and spending
If you make less money than your friend but save more.

Self-fulfilling prophecy: staying poor

If you’ve ever done something with the goal of seeming sexy instead of rich.

People who spend more than they make and don’t know it

Do you feel guilty about how much you spend?

People who don’t believe saving is the way to get rich

People who don’t plan until it’s too late — they realized, too late, that they needed to save money

Reminder: Start at the bottom and work your way up for the best chance of inclusion. Most people will click on the top ones = so your probability of inclusion is better on the more-ignored questions.

Questions about credit cards
What were the barriers to using your credit card effectively?

Best experience using credit cards.

Used credit-card offer for college students?

Your worst experience using credit cards

If you missed a credit card payment

Trouble with a big purchase because of credit

START AT THE BOTTOM!! KILL ME PLEASE IF YOU DON’T!!!!

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13 Comments latest by evie

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