Local Knowledge

Saeeda Hafiz realized early in life that earning her own money was important. At age 9, she went around her neighborhood in Pittsburgh, Pennsylvania, asking what chores she could do for money. When a neighbor offered to pay her weekly to dust furniture, Hafiz was elated. She could now pay for extras like hot lunches and class photographs. “That gave me a stronger voice in the family,” Hafiz remembers. Because her mother worried a lot about finances after the separation from her husband, Hafiz was glad she didn’t need to ask for pocket money. Her mother’s attitude has had a profound influence on the now 42-year-old Hafiz: “Because she worried so much, I make sure I worry a lot less and enjoy what I have.  

ELLEN TARLIN, A COPYEDITOR at the online magazine Slate.com, had her epiphany about money later in life. She didn’t plan to marry a millionaire, but she had certain expectations. False expectations, as it turned out. “After I got married I remember having the revelation that my husband was never going to care about money or know anything about managing money, so I was going to have to learn all that stuff,” she writes in Slate.com’s blog “The XX Factor.”

And so she did, in spite of receiving little practical advice from home. “My father always made me feel we were poor and my mother made me feel like we were rich,” she laughs, “but we never really discussed investments or personal finance at home.” Growing up without an introduction to finances is common among American women, according to a multi-phase study titled Women, Money and Power by Allianz Life Insurance Company of North America. Half of the 1,443 women surveyed between the ages of 25 and 75 said their parents never discussed financial planning and they saw that as a major barrier to their financial literacy.

Tarlin wasn’t deterred by a lack of financial savvy. Following the advice she had found in books by personal finance guru Suze Orman and articles in investment magazines, she started making maximum contributions to her retirement fund early in her career. But when she and her husband both lost their jobs temporarily, Tarlin realized that knowledge helps make good decisions but it doesn’t prevent financial roadblocks: the couple had to cut back on contributions to their retirement funds. “In our 30s, we were ahead of our peers when it came to retirement planning, but now we are behind,” she says. As a married professional in her early 40s with no kids, she feels she needs to be in control of her financial life. When it comes to educating herself, she is picky. “There is a lot of information out there but not all is really actionable,” she says. While books give some guidance, she also has a broker that she talks to regularly.

This represents a trend toward personal contact: Despite all the information out on the Internet, most women prefer to speak to someone directly when discussing money matters, according to the Allianz study. While most women first turn to the Internet for financial information, only 12% of all women asked in the survey found it effective. Most take a skeptical view, as does Hafiz: “Some of the information on the Internet feels like a dishonest sales pitch.” She prefers talking to a trusted friend, who is also a broker.

BUT WOMAN STILL HAVE TO WEIGH advice from any source. Hafiz, who has a degree in business administration, views money as a tool for people to express themselves. “You have to use it in a way that’s right for yourself, and only you can decide what right is,” she says. And: she puts her money where her mouth is. After working as a corporate marketing database manager at a large bank for a decade, she decided to cash in her retirement fund and focus on her passions: yoga and food. “While working, I was able to create a certain lifestyle, but I didn’t create internal wealth, so I was willing to risk material income to do something that makes me feel truly wealthy.”

To achieve her goal, Hafiz made some financial trade-offs. “At age 27, after working for 10 years, I had pretty substantial retirement savings,” Hafiz recalls, “but I invested the money in my new business.” While she has a lot less financial security than before, Hafiz believes giving up her retirement savings temporarily was worth it. “I am the happiest I’ve ever been,” she says with a smile. And after using her savings to finance her career change, she is now using her earnings from teaching yoga and nutrition in San Francisco to put money back into her retirement account. Because she works with the school system for some of her classes, she participates in retirement programs offered by the school’s administration.

While some may think Hafiz’s strategy is daring, she was taking a calculated risk. As a young woman, she was selected for the prestigious INROADS program, a program that prepares minority students for corporate and community leadership. “We had a lot of workshops and seminars regarding money and financial planning,” Hafiz says. The education and her life experience have given her confidence.

When it comes to women being optimistic about their financial future, Hafiz stands out. Nearly half the women in the US feel financially insecure and worry about losing their assets, according to the first part of the Allianz study. The second part of the study, published in summer of 2008, reveals that 54% of women are most interested in learning more about planning for their retirement.

LYNNAE MCCOY IS ONE OF THESE WOMan. The 37-year-old stay-at-home mother of two, along with her husband, had accumulated student loan and consumer debt over the past 12 years. In 2006, after inheriting some money, McCoy decided it was time for a financial makeover. She set a deadline and started chipping away at her debt while blogging about her progress on beingfrugal.net. “As a Christian, when I say I am going to do something, I will do it,” she says. Two years later, she had paid off the family’s credit cards, relying on the single income her husband earned.

Stretching her budget and sharing money-saving strategies on her blog has become a rewarding activity. “It’s fun, and other women here in my community in Oregon inspire me,” she says. Her blog, with more than 4,000 subscribers, has hit a nerve. Learning the basics about smart shopping and finding out how to start saving with a very small budget were two of the top five financial planning topics that concern women.

Being able to budget well has not only helped McCoy reduce the family’s debt, it has also made her more relaxed. “My husband lost his job twice in the last few years but knowing that I could make our money last a long time gave us a sense of confidence that we could master a financial crisis,” she says. Her confidence wanes for a short moment when asked about retirement planning. “We are definitely behind on retirement savings,” McCoy says before her can-do attitude takes over again. “But my husband and I both enjoy working, and we’ll work as long as we both are able to.”

Still, learning about retirement plans and investing is one of her priorities for the future. “I am not there yet, but once I get there, I’ll study away,” says McCoy, who enjoys reading blogs and financial books, especially by authors Dave Ramsey and Mary Hunt. She also uses a budget planning tool on her ministry’s website www.crown.org.

ANA CARCANI ROLD, THE 28-YEAR-OLD FOUNDER and editor-in-chief of the global affairs magazine Diplomatic Courier, likes to consult with her husband, her parents and grandparents on money matters. Right now, her focus is on making her business grow and putting all resources back into the magazine. But saving and retirement planning is definitely on her radar. “Our generation has to start saving much earlier than our parents,” she says. “There won’t be much in terms of social security for us.”

As an immigrant from Albania, Rold did not grow up wealthy. Today, however, she has an empowered attitude toward money: “Money is not only a means of buying things, but also a means to create a legacy, and that makes me work harder,” she says. In this respect her attitude is in tune with that of yoga and nutrition teacher Hafiz, who says: “Money represents energy, it is a force that gets things moving.” 

Published by PROJECT M in June 2009