Money Shy to Money Sure: A Woman's Road Map to Financial Well-Being

Money Shy to Money Sure: A Woman's Road Map to Financial Well-Being

by Olivia Mellan, Sherry Christie

If you feel nervous or confused when dealing with money decisions, you’re not alone. Many smart women recognize the need to make informed decisions about money yet are thwarted in their efforts because of anxiety and insecurity, emotions that often come out of parental, cultural and social influences.

Nationally known money therapist Olivia Mellan has long


If you feel nervous or confused when dealing with money decisions, you’re not alone. Many smart women recognize the need to make informed decisions about money yet are thwarted in their efforts because of anxiety and insecurity, emotions that often come out of parental, cultural and social influences.

Nationally known money therapist Olivia Mellan has long understood that you can’t make good money decisions unless you realize what role money plays in your life. In Money Shy to Money Sure, she and financial writer Sherry Christie lead you on a journey of self-discovery that will boost your financial confidence and expertise. They begin by analyzing the seven most common myths that hamper women when dealing with money, then counter those misconceptions with positive messages based on facts. Mellan and Christie present equally valuable advice about managing your money–including a primer on how the stock market works, tips on deciding which savings or investment options are best for individual circumstances, strategies for finding and working with a financial planner, and much more.

This money-wise, woman-wise guide to achieving financial confidence and security includes insightful quizzes to help you set goals, and action plans for reaching your objectives without sacrificing your principles or alienating your family. There are also inspiring success stories and cautionary tales from the lives of ordinary women and from such celebrities as Katie Couric, Linda Ellerbee, and Gloria Steinem.

If you feel anxious about your financial future–whether your struggling to make investment decisions or negotiating money conflicts with a partner–you’ll find in Money Shy to Money sure the best kind of therapy: encouragement, valuable advice, and the inspiration that comes from shared experience.

Editorial Reviews

Library Journal
Coauthors of Overcoming Overspending: A Winning Plan for Spenders and Their Partners, Mellan, a psychotherapist specializing in money issues, and financial writer Christie have written an excellent financial guide geared toward women. The authors focus on seven money myths that they feel women must overcome in order to feel more confident about financial matters. Each chapter covers one myth such as "Money is too complicated for me to understand," "If I take charge of my money, I'll antagonize others," or, most harmfully, "Somebody else should be taking care of all this for me." Throughout the chapters are quotes, stories, and advice from the variety of both ordinary and famous women interviewed for the book. The practical advice is presented clearly, and each chapter ends with a series of exercises for the reader. The appendix includes a list of resources about money and investing. Here is a useful book to get women who need it started on their financial education. Recommended for all public libraries. Stacey Marien, American Univ., Washington, DC Copyright 2001 Cahners Business Information.

Product Details

Walker & Company
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6.31(w) x 9.32(h) x 1.13(d)

Read an Excerpt

Chapter One

Myth 1:
"Money Is Too Complicated
for Me to Understand"

I am living proof that you can understand money, because nobody thought it was more complicated than I did. If I can do it, anyone can!

Daria Dolan, cohost of The Dolans,
a national personal-finance radio program

"I was so stupid about money that I didn't know I needed to do any more than pay my bills on time, balance my checkbook, and save a few dollars," says this energetic brunette. A theater arts major from Long Island, New York, she became a flight attendant in order to see the world, then got married at twenty-four.

    Today, you may know Daria Dolan as one of the nation's most articulate and visible women on the subject of money and investing. Cohost with her husband, Ken, of The Dolans syndicated radio call-in show, she's a frequent guest on TV news shows and coauthor of three financial books, including Sams Teach Yourself e-Personal Finance Today.

    What inspired her to change from someone to whom higher money matters were a mystery, into an expert who now feels at home discussing asset allocation, junk bonds, and risk-return ratios in front of a national audience? Here's what Daria told us.

Growing up, I was always told that if I picked up a pool cue I should lose, but I've always been competitive as hell.

When I met Ken, he was working for a Wall Street firm and dealt with money all day long. Whenwe got married, I had some money and no bills, while he was three thousand dollars in debt, so I decided that as the better money manager I would be the one to pay the bills and balance the checkbook.

Fifteen years into our marriage, Ken came home and said he wanted to leave Wall Street to become a talk-show host, with a 70 percent cut in pay. I was acting in theater at the time, and I figured I'd better get serious about making some money to fill the gap. To this day, I don't know what made me say, "Well, I guess I'll have to become a stockbroker."

    To get her broker's license, Daria studied investments seven days a week during three months of training. "God knows I never had a modicum of interest in the topic," she says, "but I found I had a facility to understand how this stuff worked." After a year as a broker, she joined Ken's show as an on-air money consultant. In 1986, they formally became a team ... and the rest is history.

    Like Daria Dolan, many intelligent women grew up expecting that the mysteries of money would be a closed book. Yet thousands of women around the country have proved that the notion of money being "too complicated to understand" is just a myth. When it comes to investing, for example (the topic many of us mean when we say "money is too complicated"), women often beat men, hands down.

• The National Association of Investors Corporation reports that women-only investment clubs earned nearly 10 percent more than men-only clubs in 1999 (and almost 5 percent more than coed clubs). It's important to note that many of these club members are ordinary working women, homemakers, and retirees who taught themselves—and each other—the fundamentals of investing.

• There are successful women investors in the big leagues, too. An analysis of more than 2,500 mutual funds for Money magazine showed that over the three years ending August 31, 1997, women fund managers posted better investment returns than male managers in most important fund categories, including U.S. diversified stocks, international stocks, taxable bonds, municipal bonds, and hybrid stock/bond funds.

• This investment savvy is beginning to percolate into homes around the country. Thirty percent of women in a June 2000 Wall Street Journal/NBC News poll said they alone make the decisions about buying mutual funds and stock for their household.

Many of us know more about
investing than we suppose

As many women can testify, understanding money is like getting comfortable with a foreign language. The way to begin feeling at home with money is the same way you'd learn Spanish or French: by relating it to what you already know. With this in mind, many of the basics of investing may not seem so foreign after all.

    Investing in stock is similar to buying a house. You can understand the principle behind investing in stock if you've ever owned a house and sold it for a profit. When you buy stock, you become the owner of a company. (Actually, you share ownership with other investors—the reason why stockholders are often called shareholders.) You hope that when you sell your stock, it will be worth more than you paid, letting you pocket a profit. Many stocks also have an advantage that home ownership can't match: They pay dividends, giving you a share of the company's profits every quarter. When you think of stocks, think "I own."

    Investing in bonds is similar to putting money in a CD. If you've ever earned interest on a certificate of deposit, you understand the principle behind investing in a bond. You're loaning your money for a certain period of time to a company, government unit, or even the U.S. Treasury. The debtor gives you its "bond" (as in "my word is my bond"), promising to pay you a fixed rate of interest and return your principal at a certain point in the future. (Despite this promise, however, bonds are not federally insured like CDs.) When you think of bonds, think "I am owed."

    As for the stock and bond markets, imagine them as two auction desks in a big tent full of investors who are ready to buy if the price is right. Some investors focus on stocks because they want their money to grow. Other investors need steady income, so they concentrate mainly on finding the best bond deals. Many others—professional money managers, day traders, speculators—try to keep an eye on both desks so they can jump into what's hot and out of what's not.

    On the stock side, the action is pretty straightforward. There's usually lots of demand for the stock of companies with rosy prospects, so investors tend to bid up the price. By contrast, the stock of a company on the skids becomes cheaper—the Wall Street equivalent of a fire sale. Prices may change constantly during the course of a day, according to what buyers are willing to pay.

    The bond market is driven by demand, too. When a company, state, or city decides to raise money by floating a new bond issue, it has to pay an interest rate attractive enough to entice investors without bankrupting itself. If the bond is viewed as relatively risky, the issuer has to pay a higher rate to reward investors for taking on the extra risk. That's why supersafe Treasury bills, backed by the U.S. government, pay investors less than high-yield corporate bonds, whose greater risk is evidenced in their nickname, "junk bonds."

    Stripped of its jargon, the Great and Powerful World of Investing is really just a glorified bargain barn. In fact, women's experience as smart shoppers tends to make them excellent investors. As fund manager Loretta Morris puts it, once women begin educating themselves about money, "they make careful decisions, gathering all the information they can. They tend to be more thorough." Knowing how to choose efficiently, recognize bargains, and learn from past mistakes is a priceless advantage.

    But what if the whole idea of investing, comparing interest rates on loans, doing your taxes, or balancing your checkbook makes your palms get sweaty or your heart race?

For women with math anxiety,
help may be right around the corner

If you get physically anxious about dealing with numbers, this feeling probably goes back to your school days. Despite the years since then, old memories of frustration and discouragement still have the power to influence your adult attitude toward dealing with money. According to a 1997 study by the Dreyfus Corporation, women who had math anxiety as girls are likely to be more risk-averse, more fearful of making investment decisions, and less financially prepared for retirement.

    Why is math anxiety so much more common in women than in men? Research shows that boys don't find math any easier than girls do, but they often have more confidence in their ability to learn it. Even today, when teachers and parents are united in stressing this subject's importance, many girls don't feel they can master math ... or money matters. For example, in a survey of junior high and high school students by Liberty Financial, girls were only half as likely as boys to consider themselves "very knowledgeable" about money and investments—even though the study showed little real difference in knowledge levels!

    Some teachers are trying innovative ways to make girls more comfortable with mathematical concepts. Ms. magazine founder Gloria Steinem mentioned that Sheila Tobias (author of Overcoming Math Anxiety) had helped her see that there are "many different paths to math, not one right way to do it" or learn about it. For example, Tobias suggests reading about the lives of great mathematicians as a way of getting into their ideas.

    Another fresh thinker is Dr. Galeet Westreich, who teaches "dancing mathematics" to young girls, encouraging them to experience geometry by creating an array of shapes in different planes with their bodies. Westreich says research has shown that kinesthetically oriented young women improve tremendously in their grasp of geometric and other mathematical skills after using creative learning techniques like these.

    But what about you? If you're determined to take charge of your money now, how can you get past math anxiety created in your youth?

    To begin with, try to put aside math-associated feelings of shame, dislike, and anxiety that may have sunk their roots into your tender adolescent self-esteem. Remind yourself that math is just another language. Maybe you don't know yet how to say what you want in this language, but you can learn.

    So the first step is developing a new attitude. Try to remember the confidence and joy with which you approached your favorite subject (whatever it was) early in your education. That excited new learner is still somewhere inside you, looking forward to the pleasure of making numbers dance.

    Now here's the good news: You don't need to know advanced math to manage your money well. As Washington, D.C., financial planner Susan Freed told us, "It doesn't get more complicated than addition, subtraction, multiplication, and percentages."

    So forget about geometry, calculus, or any of that college stuff. A shopper who knows how to figure 20 percent off a regular price, multiply the cost of new shoes by three kids, or add sales tax to a planned purchase has virtually all the know-how she needs to manage her money.

    Once you feel confident that you have what it takes to understand money concepts, you'll find they're far less complicated than you feared.

    But what if you simply can't attain that level of confidence—perhaps because you did miss some of the fundamentals, or you've just felt insecure about math for so long? Some possible solutions:

• Look for an adult math class offered through a nearby community college or university continuing education program. Encourage a buddy to sign up with you (or make a friend in the class) so you can compare notes and cheer each other on.

• Ask a financially proficient female friend to mentor you as you restore your knowledge and confidence (perhaps bartering your skills in another area for hers).

• If you'd prefer to work with a partner at your own level, enlist a female friend or relative and coach each other with the aid of a self-help guide. (See the appendix.)

• Find a simple money or math task you can do, and drink in the feeling of confidence that comes from completing it. Then use that confidence as a springboard to take on a harder math or money assignment.

Managing money isn't rocket science

Money is a tool we can use to build what we want out of life: security, pleasure, comfort, prestige, power, freedom, loyalty, even love (or so we may hope). Once we get past old money messages, math anxiety, and whatever else may be in the way, it's easy to see that this tool itself is actually pretty simple. We can lend money or borrow it, save it or spend it, invest wisely or speculate wildly, grow it or blow it. In the course of a lifetime, we'll probably do all these things.

    Sometimes we avoid learning how to build what we want with our money because we wrongly feel we don't deserve much in life. But in many cases, the problem is simply that we don't know what we want. To use this tool effectively in our complicated lives, we need a plan. Here's how to put one together.


Setting goals may sound like a big commitment, especially to someone who feels her future is constantly subject to change. But without goals, we tend to forget what our priorities are. We buy things that don't really matter and pass up choices that do—like a dieter who falls for a mouth-watering chocolate cake in the bakery, only to wish later that she'd spent her money in the supermarket produce section instead.

    Without goals, we may also be swept into the wrong decisions by someone else who does have an agenda—a partner, parents, boss, kids, financial adviser, or maybe a shrewd marketer.

    For example, let's say you've squirreled away $3,000 with no particular purpose in mind. Your brother, whose ambition in life is to open an electric-car recharging depot, begs you for a loan to start his business. Since you don't have the money earmarked for anything else, you agree. Unfortunately, there are only two electric autos in the whole county, so your brother soon goes broke, leaving you with nothing to show for your savings but a $3,000 bad-debt write-off and a strained family relationship.

    You might have been more reluctant to hand over that money if you'd been saving it for a specific reason. In short, a goal can not only help make your innermost dreams come true but also validate your financial choices—an important advantage for women raised to defer to the wants and needs of others.

    Many of us have some general idea of what we want to achieve in life. But motivational experts tell us that when we write down dreams and wishes on paper, they become much more powerful. Simply crystallizing them into words emphasizes their validity and their importance. And once they're written down, you can review the list regularly to reinforce your determination and make sure you're on the right track.

    We recommend starting this process with some blank sheets of paper in front of you. Take a few deep breaths and imagine yourself in a relaxed setting (on the beach, in a Japanese garden ... whatever works for you). Ask yourself: If I could do or have anything I really want, what would it be? Let your most deeply felt dreams, longings, and desires surface.

    First, consider the short term. What secret or not-so-secret dreams would you like to see come true within the next five years? In what ways would you like to improve your financial well-being? How about other nonfinancial goals that would enrich your life? For example, would you like to:

• Learn how to invest more confidently?

• Increase your retirement savings substantially?

• Get out of debt?

• Buy a first home, move up to a more comfortable place, or get a vacation home?

• Start your own business?

• Establish a college fund for a child?

• Learn a musical instrument, a new language, or a craft?

• Travel somewhere you've always wanted to go?

    At the top of a blank page, write "Here's what I really want to do during the next five years" and then write down your dreams for that time frame. There can be any number of them, and they may be in any order.

    Next, think about what you would like to do (or enjoy) in ten or twenty years. Is there another kind of work you'd rather be doing? Where would you like to be living? What will your relationship be with your family? Contemplate your future after age sixty or sixty-five, or after you stop working full-time. (Although we often refer to these as "retirement" years, they might—with a good financial foundation—actually be years of joyful creativity or a nourishing blend of work and play.) For example, would you want to:

• Spend summers in the North and winters in the South?

• Be able to travel whenever and wherever you wish?

• Make sure your parents get the care they may need?

• Build a sailboat and go cruising in the Caribbean?

• Retire early, move to the Riviera, and paint?

• Help pay for your grandchildren's education?

• Keep working, either as a consultant or in a completely different line of work?

    Head another blank page with "Here's what I really want to do in the long term," and write down your dreams for the rest of your life.

    A dream has to be something that's truly important to you—not just a temporary whim. To find out which of your desires are really abiding, try writing another dreams list a week from now, and do a third list in two weeks. (Don't look at the old list or lists when you write the new one.) After comparing the three attempts, you should be able to create a "final" list that reflects what's truly important to you.

    Even then, of course, it won't really be final, because life doesn't always turn out the way we want it to. You may fall madly in love and marry (or remarry). You may become a new mom when you'd thought your childbearing years were over. You may lose your partner. You may decide to follow an independent path instead of settling into a long-term relationship. And, we hope, you'll reach some of your short-term goals and want to choose new ones. So feel free to update your dream list whenever appropriate.

    If you're in an intimate relationship with a partner who's also done this goal-setting exercise, you'll want to take the extra step of getting together to compare and discuss your lists. Once you've identified the dreams and goals you can both get behind, create a single list of shared goals. (Remember: Don't give up on a dream that's really important to you!)

    By the way, it's fine to keep money for mutual goals in a joint account if you wish. But in this age of divorce, we believe it's prudent to keep funds for personal goals (like a financially secure retirement) separate from jointly held money.

    We know that insisting on separate accounts may make you feel like Hard-hearted Hannah. But your wise Uncle Sam already stipulates that you can receive tax breaks on retirement savings only if they are held in your own name. Follow this lead, and your assets will be better protected from predators and creditors than they would be in a joint account.


What People are saying about this

John Gray
Money therapist Olivia Mellan is a beacon, showing women how to conquer anxieties and navigate financial power struggles in their relationships.
— (John Gray, Ph.D., author of Children Are from Heaven)
Harriet Lerner
If you're convinced that you can't think clearly about money-or that you don't really want to-this is exactly the book for you.
— (Harriet Lerner, Ph.D., author of The Dance of Anger)
Daria Dolan
Olivia Mellan wrote the definitive book on money personalities; and now she and Sherry Christie have done it again with Money Shy to Money Sure!
— (Daria Dolan, co-host of "The Dolans" on radio and television)
Nancy Friday
Mindful of the connection between money decisions and emotional independence, Olivia Mellan and Sherry Christie have written a valuable guide that explains why many women are phobic about money and how to overcome those fears.
—( (Nancy Friday, author of My Mother/My Self)
Linda Ellerbee
Olivia Mellan and Sherry Christie are great mentors, giving women the knowledge and perspective to demystify money management.
— (Linda Ellerbee, TV producer, journalist, and best-selling author)
Barbara Stanny
It's a terrific book. I am going to give a copy to each of my daughters. And I'll recommend it to every woman I know.
— (Barbara Stanny, author of Prince Charming Isn't Coming and How Women Get Smart About Money).

Meet the Author

Olivia Mellan, author of Money Harmony and Overcoming Overspending, is a groundbreaking psychotherapist in the field of money-conflict resolution. She gives seminars nationwide and has appeared regularly on television, including The Oprah Winfrey Show, The Today Show, and 20/20. She writes a monthly column for Investment Advisor, and has been interviewed widely in magazines ranging from Money to Working Woman. She lives in Washington, D. C.

Sherry Christie is a writer who specializes in financial matters. She lives in Jonesport, Maine.

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