Jean Chatzky On Financial Challenges Facing Women Today | NerdWallet

Hi, I'm Sean, a finance nerd. And today we're talking about women and money. I'm joined in this conversation by Jean Chatzky, 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 wanna 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 how women come to 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. Well, I wanna 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 O'Dean 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. So men are more likely to meddle. They're more likely to trade around. Being a buy and hold investor is 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 time. 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, but every other Monday night on Zoom, my friend Karen Feinerman 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. Right. 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. Absolutely. 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. When we look at, 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. You know, the 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 gonna 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, right? And unless we allow ourselves to figure out what the next dream is, we're not ever gonna 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. But 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. Thanks for watching. I'm Sean Piles, host of NerdWallet's Smart Money Podcast. If you learned something new today, hit like and subscribe and share with your friends. 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