Presentation given for Meredith College in Raleigh, NC in November 2017

1. A Man is Not a Financial Plan:
What Every Woman Should Know About Money
Barbara O’Neill, Ph.D., CFP®
Co-Author, Money Talk: A Financial Guide For Women
boneill@njaes.rutgers.edu

2. Personal Introduction
• CFP® for 33 years
• Rutgers University professor/financial educator
• Author/co-author of eight personal finance books
• Twitter handle: @moneytalk1

3. Presentation Agenda
• Introduction
• Unique financial needs of women
• 10 things women need to know about personal finance
• Online personal finance resources
• Q & A

4. Let’s Get To Know One Another
Money Coat of Arms

5. Women Have Unique Financial Needs
• We live longer, on average
• We earn less, on average
• We may have gaps in employment that impact future
retirement benefits (e.g., Social Security)
• We are impacted more severely than most men by
events like divorce and widowhood
• Some women lack financial experience

6. Another Big Reason:
The White Night Syndrome

7. Money Talk Book Introduction
No matter how much women prefer
to lean, to be protected and supported,
nor how much men prefer to have them do so,
they must make the voyage of life alone,
and for safety in an emergency
they must know something
of the laws of navigation.
Elizabeth Cady Stanton, 1892

8. It’s Only a Matter of Time...
An estimated 85% to 90% of American women will be
on their own financially at some point in their lives
– Some will never marry
– Some will see their marriage(s) end in divorce
– Some will outlive their husbands

9. Ten Important Things... …That
All Women Need to Know
– To achieve financial success
– To reduce financial stress and worry
– To live a more comfortable life
– To be able to retire someday
– To pay the least amount of taxes possible
– To feel secure and financially independent

10. 1. Your Financial Goals
• Include a specific date (e.g., 2020)
• Include a specific cost (e.g., $7,000)
• Develop an action plan to achieve the goal (e.g., “I will
contribute $400 monthly to my 401(k)”)
• Develop positive habits that support the action plan
• Measure your progress periodically

11. 2. How to “Pay Yourself First”
(Automated Savings and Investing)
• 401(k), 403(b), Thrift Savings Plan (TSP), and Section
457 employer tax-deferred retirement plans
• Automatic checking to savings deposits
• Mutual fund automatic savings programs
• DRIP accounts for stock purchases
Try to give savings the same “respect” as major household bills
(e.g., car payment)

12. Don’t Be Afraid of Investing

13. The Rule of 72

14. 3. How to Develop and Maintain
Your “Human Capital”
• Never consider your education finished
• Learn new skills and information
• Computer/tech literacy is very important
• Purchase adequate disability insurance to protect your
income stream
• Practice good health habits

15. 4. How to Maintain a Good Credit
Rating (In Your Own Name)
• Check your credit file regularly
– www.annualcreditreport.com
• Correct errors, if any (form is provided)
• Pay credit bills on time (35% of credit score)
• Avoid charging >30% of available credit
• Avoid co-signing loans for others

16. Your Credit Score = Financial GPA
• Rating scale of risk
• Higher the number, the better
• Can often get for free

17. 5. How to Deal With Debt
• Seek a low interest rate credit card:
• Negotiate a lower rate with lenders
• PowerPay debt reduction analysis: http://powerpay.org
• Non-profit credit counseling agencies
• Pay more than the minimum payment!
– $3,000 balance, 18% APR
– 3% minimum payment ($90): 14 years; $2,625 interest
– 6% minimum payment ($180): 6 years; $938 interest

18. Minimum Payment Illustration

19. 6. Tax-Avoidance Strategies
• Legal tax-reduction strategies
– Not the same as “tax evasion” (a crime)
• Tax deductions and credits
• IRAs and employer retirement savings plans
• Tax-exempt securities (e.g., municipal bonds and tax-free
bond mutual funds)
– Know your marginal tax bracket and compare taxable and tax-
free investments
– Tax rate chart: http://njaes.rutgers.edu/money/taxinfo/

20. Taxable vs. Tax-Deferred Investing
27,600
31,300
48,300
58,600
75,800
98,800
112,200
157,900
160,300
244,700
$0
$50,000
$100,000
$150,000
$200,000
$250,000
10yrs 15yrs 20yrs 25yrs 30yrsTaxable Returns (at 28%)
Tax-Deferred Returns Garman/Forgue, PERSONAL FINANCE, Fifth Edition, Tax-
Sheltered Returns are Greater than Taxable Returns (Illustration:
8% Annual Return and $2,000 Annual Contribution)

21. 7. Your Net Worth
• Total all your assets
• Total all your debts
• Subtract debt total from asset total
• The result is your net worth
• Calculate net worth annually to measure progress
• Worksheets: http://njaes.rutgers.edu/money/

22. 8. Your Cash Flow and Spending
Patterns
• Track and total your monthly income
• Track and total your monthly expenses
• Compare the numbers
• Identify expenses that can be cut to find money to save
• Everyone has “lattes” that waste money
• Develop a spending plan (budget):
– http://njaes.rutgers.edu/money/pdfs/fs421worksheet.pdf

23. 9. Essential Versus Non-Essential
Insurance
• Cover risks with the largest potential losses, not the
most frequency of happening (e.g., liability, disability)
• Avoid unnecessary insurance (e.g., limited health
policies, life insurance on a dependent child)
• Inquire about available discounts and the cost of
various options (e.g., auto insurance deductibles)
• Consider LTC insurance or good alternatives

24. 10. Financial Education
Matters- Stay Informed!
• Seminars
• Publications, books, etc.
• Web sites
• Financial advisors
• Investment clubs
• Government agencies
• Social Media

25. RCE Money and Investing Site
http://njaes.rutgers.edu/money/

26. Rutgers Cooperative Extension
Investment Risk Tolerance Quiz:
http://njaes.rutgers.edu/money/riskquiz/

27. RCE Financial Fitness Quiz
http://njaes.rutgers.edu/money/ffquiz/

28. RCE Wise Credit Management Quiz
http://njaes.rutgers.edu/money/wise-credit/

29. Small Steps to Health and Wealth
http://njaes.rutgers.edu/sshw/

30. eXtension: Cooperative Extension 24/7/365
http://www.extension.org/personal_finance

31. Investing For Your Future Home Study
Course (Cooperative Extension)
• Free of charge and downloadable
• 11 units; do at your own pace
• Designed for beginning investors
• Monthly investment messages
• www.investing.rutgers.edu

32. The Ball Park Estimate
• Six easy steps; can do online or download paper worksheet
• Can do online at www.choosetosave.org
• Flexible annual retirement income and life expectancy figures
• Assumes a 3% constant real rate of return

33. College Savings (529 Plans)
www.collegesavings.org

34. Internal Revenue Service (IRS)
www.irs.gov

35. MyMoney (Federal Government)
http://www.mymoney.gov/

36. Key Financial Messages for Women
• Save early and often
• Invest for long-term growth
• Earn all the “free money” you can (matching)
• Don’t depend on the government
• And…

37. Major Take-Away:
Focus on What You CAN Control
CAN’T Control
• Speed of economic recovery
• Financial markets
• Labor market/unemployment rate
• Housing market
• Employee benefit cutbacks
• Political environment
• Actions of lawmakers
CAN Control
• Healthy lifestyle
• Spending habits
• Saving habits
• Investment expenses
• Human capital investments
• How you spend your time

38. Don’t Make the $1Million Mistake

39. Take Charge of Your Finances
“If it is to be,
it is up to me”

40. Questions? Comments?
Experiences?
Barbara O'Neill, Ph.D., CFP®
Extension Specialist in Financial Resource Management and
Distinguished Professor, Rutgers University
Phone: 848-932-9126
E-mail: boneill@njaes.rutgers.edu
Internet: http://njaes.rutgers.edu/money/
Twitter: @moneytalk1