Carmen Wong Ulrich is President and Co-Founder of ALTA Wealth Management and Assistant Industry Professor in the department of Finance and Risk Engineering at NYU Polytech. She is the former co-creator and host of the only national, daily personal finance television show, “On the Money,” on CNBC.
5 questions for Carmen Wong Ulrich on Women and Finance
CEE: Working women are surpassing men as the primary decision makers of a family. How can financial literacy education for women keep up with the pace of this trend?
CWU: It’s a tough pace to keep up with and getting tougher, but, that doesn’t mean it can’t be done! It’s wise to not only know the in’s and out’s of the financial products you use and have (such as credit cards, student loans, insurance, etc.) but to know how they work, how to maximize their benefits (i.e., reducing fees), and how they fit into your life. We’ve been handed down a lot of ‘advice’ regarding money management by generations that lived in a very different time, financially. Pensions existed, homes seemed to only increase in value and mortgage rates were in the teens. That’s not our world. Keep pace by making it a habit to have financial education in your life, regularly. For example, follow one or two blogs that offer information and education. Look up any new terms. Read the personal finance sections of your favorite papers. Never stop learning and asking questions.
CEE: Women have a longer life expectancy than men (81 to 73). How can women prepare to be financially independent in their later years?
CWU: By staying involved in their finances. I see too many women handing financial planning and even budgeting to spouses and partners. Yes, we may not all like dealing with money or math, but this isn’t just about money–it’s your life! Always stay involved in financial decisions. Know where your money is and have a say with where it goes. Maintain and keep your own credit and have your own bank account as well. We don’t like to think of or be reminded that life happens, but it does. What would you do if you were on your own tomorrow? Always keep that in mind. It’s a gift to you and your family.
“It’s never too late!”
CEE: What is the most common mistake made by women when it comes to their finances? How do you think this could be averted?
CWU: Two big mistakes: Not paying enough attention and not protecting yourself with savings and insurance. Paying attention is vital. It keeps you in control of your money and less likely to get into any trouble even so small as paying fees you shouldn’t have to. Protecting yourself means not spending so much, rather having a savings plan and being underinsured. I’m a worst-case-scenario person. I always think, ‘what if’. Grab on to whatever motivates you best to pay attention to your money and make better decisions. You can do it.
CEE: Many women feel intimidated when it comes to learning about personal finance because of the “it’s just too late to learn” syndrome. What are the first steps in adulthood to becoming financially literate?
CWU: It’s never too late! I’ve seen women in their late to mid 60’s take the reins of their money and turn things around. It’s amazing what you can do if you have your health and you’re still sharp. There are always options, there’s always help, even when we’re convinced there’s not. It takes initiative and it can be harder to break habits and form new ones the older you are but it’s never impossible. It’s actually very invigorating! Dive in.
CEE: At the other end of the spectrum, what is the first thing a young woman should do to establish responsible personal finance habits?
CWU: Have a no-fee checking account and savings account (hopefully even earning a bit of interest). Start to build your own credit asap. If you’re worried about spending too much on a credit card, just get a card for gas or groceries–you can only use the card for one thing, then pay it off in full every month before it’s due. You’ll build credit sooner, which is vital for your independence. And sign up for your employer’s retirement benefits such as a 401k, even if you’re just putting 5% away, with youth comes the power of time!
CEE note: Learn more about women and finance from CEE’s ‘Financial Illiteracy: Educated Women Too?‘, and download a report from Smith College.