Jean Chatzky is a financial journalist and author of “Money Rules,” “Money 911” and “Make Money, Not Excuses,” among other books. Chatzky is also the financial editor for the Today Show.
Here’s her best advice to take control of your finances:
What can I do today in 30 minutes or less to take better control of my finances?
Automate your savings. Do this by enrolling in your employer’s retirement plan and having money deducted from your paychecks, or having funds automatically transferred from your checking account into savings and retirement accounts. Then kick back and watch it add up.
What is the biggest money mistake you think women tend to make?
One of the biggest money mistakes women tend to make is thinking that their financial planning can mirror men’s. Anyone who tells you women don’t need financial advice specifically for them is wrong. Whether you’re a caretaker, a breadwinner or both, you face a unique set of financial challenges. Most obviously, you’re more likely to live longer. This means you need to be more aggressive with your retirement savings.
How do you teach your own kids to be financially responsible?
For my two teens, I opened up accounts at my bank that were linked to my checking account. Since I maintain the minimum balance, they didn’t have to worry about it. The accounts each came with debit cards. Then I set up automatic transfers into the accounts every week for their allowances. They’ve learned to monitor their balances online (they have separate passwords), all about the fees when you use an ATM other than your own bank’s, and how fast money can go when it comes automatically out of a machine.
Before they have their licenses, you may have to be the bank for them. So, when they need cash, you give it to them, then have them watch you transfer the money back out of their accounts into yours. It’s worked really well. And when my son took off for college, I didn’t have to add this to the skills he needed to learn. The most important point: Set limits on how much they’ll get from you. Then don’t bail them out when they blow it. If they need more, they have to work.
How can I make my charitable gifts have the most impact?
Giving back is one of my Money Rules (it’s #94 to be exact) because whether it means writing a check, volunteering or giving away your unwanted goods, the process makes you healthier and happier. It will give your psyche a boost. As for giving more effectively and efficiently, approach choosing your charities and making your donations as you would choosing stocks: focus on the outcomes. Both are investments you hope to profit from—though in the case of charitable gifts, your profit comes in the form of changes you’d like to see happen. First ask yourself a few values-based questions: What angers you? What inspires you? Then, survey the charities that share your passions and see which ones will give the biggest “change per buck.” For instance, would you rather donate a $10,000 gift that goes to buying children’s books, or a $10,000 gift that sponsors a class that teaches children how to read? I’m more inclined to take out my checkbook for the latter.
