Why women have trouble getting rich

As part of “Today’s Money,” Jean Chatzky, the show’s financial editor, gave Megan McCormack, a single 30-year-old, a financial makeover. McCormack was concerned about her long-term savings and providing for herself later in life. Chatzky gave her a four-step plan to help her ensure her future. She has advice for other women in her new book, “Make Money, Not Excuses.” Read an excerpt:

Introduction
Why Aren’t You Richer?

It took me only fifteen years reporting on money and how people should be using it to have the following epiphany: If you want to get rich, if you want to be wealthier than you are today, you really need to do only four things. That’s right, just four things:

• You need to make a decent living.
• You need to spend less than you make.
• You need to invest the money you don’t spend so that it can work as hard for you as you’re working for yourself.
• And you need to protect yourself and this financial world you’ve built so that a disaster — big or small — doesn’t take it all away from you.

Everything else is just window dressing. The fees — and how to avoid them.The advisers — and how to hire them. The deals. The scams. The ins. The outs.They are all interesting. Some of them are even quite important. But until you have conquered the heart of the matter, they are all minutia. The four cornerstones, by contrast, are the meat and potatoes of your financial life. If you do those things today, you’ll start getting rich tomorrow. And once you feel set financially, you’ll be able to start focusing on the truly important things in life.

NBC VIDEO Financial makeover for a 30-year-old Sept. 28: The "Today" show's Ann Curry talks with the show's financial editor, Jean Chatzky, about her four-step plan for Megan McCormack's finances. Today Show Money

After I had my epiphany, I stood there for a little while. (Okay, I’ll let you in on a little secret: I had my epiphany where I often have my best thoughts . . . in the shower.) As I let the hot water run out, I had little doubt that every woman, every person, in America wants a little more financial security and the independence it would bring. So the real question is, If it’s so simple, why aren’t we all richer?

And that’s where, for women in particular, the answer is more complicated than the question. Most women in the country are far from rich. We’ve all heard the dismal statistics:

• At retirement, a woman’s average payout will be 56 percent less than a man’s her age.
• Women lose roughly $650,000 in earnings, missed promotions, raises, and benefits as a result of caregiving to children and aging parents.
• For one in four women, Social Security is the only source of income.
• One-third more women than men live below the poverty level.

You hear these numbers cited so often (yes, sometimes by me) that you’d be perfectly reasonable in thinking these are the reasons women aren’t richer.  But these are not reasons; these are results. These are examples of the things that happen because you and other women aren’t as wealthy as you’d like to be.

The reason most women aren’t richer — and the reason you aren’t as rich as you’d like to be — is that you can’t get out of your own way. That’s right, you are a big part of the problem. You set up roadblocks that stop you on the way to wealth. You have a million excuses that prevent you from earning as much as you’d like, saving as much as you’d like, keeping as much as you’d like for the future. Have you, for instance, ever heard yourself or the other women in your life say . . .

• “I’m just not good with money.”
• “I can’t get up the nerve to ask for a raise.”
• “My husband (or partner) takes care of our finances.”
• “My husband doesn’t want me managing our money.”
• “I’m going to buy those shoes. After all, you only live once.” “I can’t find a financial adviser (or planner or broker or lawyer or accountant or insurance salesman) I trust.”
• “I don’t have time to deal with my money.”
• “I’m not a numbers person.”
• “Organization isn’t my strong suit.”
• “I hate paperwork.”
• “I shop. He saves.”
• “I’m afraid if I manage my money I’ll lose it!”
• “I don’t know where to start.”
• “I can’t talk about money.”
• “I can handle money, but investing is over my head.” “Managing money is too depressing (or intimidating or overwhelming or scary).”
• “I’m single. I’ll think about money when I get married.”
• “I’m young. I’ll think about money when I get older.”
• “I’m too old to make a difference.”
• “I don’t have enough money to make a difference.”
• “Managing money is boring.”
• “I’m not materialistic. I just don’t care about money.”

If you’re sitting there rolling your eyes, cringing, or shaking your head because these excuses sound sooooo familiar, then you’ve come to the right place. Maybe you don’t say them in exactly that way. Maybe you prefer to think them silently rather than saying them out loud. But you know exactly what I’m talking about. And the fact is, these words —these harmful, negative, demoralizing words and phrases — have to go. Why?

Because these excuses allow us to believe it’s okay that we don’t know where to start. They give us the leeway to set off on what might very well be the right path, then get sidetracked. They let us off the hook when something big, even monumental, rocks our world and sends us all the way back to “Go.”

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