Making Change: A Woman's Guide to Designing Her Financial Future - Softcover

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Neale S. Godfrey writes a weekly Associated Press column and is the author of fourteen books that address money in the context of life skills and values. She has made numerous appearances on such television shows as The Oprah Winfrey Show, Good Morning America, and Today, and she is the founder of Children's Financial Network, Inc.

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Chapter 1

Where Do I Come From?

A lot of our baggage comes to us from our childhood -- the rules we grew up with, the examples we grew up with. Here are a couple of quizzes to help you identify where you came from. I've set up this first quiz in terms of a conventional nuclear family, because even though not all of us grew up that way -- I know...I've experienced every kind of family life from nuclear to nuclear holocaust -- most of us grew up with the kind of gender baggage that's exemplified by the role-playing that goes on in a two-parent family.

My Parents and Money

1. Finances in my home were managed by

a. Daddy.

b. There was no plan. Things were handled as they came up, and whoever got angriest won out.

c. My parents discussed everything and made up a budget together.

2. My mother

a. Had no money in her own name.

b. Had a joint checking account with my father.

c. Had her own bank account.

3. My parents

a. Never talked about money.

b. Argued a lot about money.

c. Discussed financial decisions.

4. My mother's response when I asked to buy something was

a. "Ask your father."

b. "We can't afford it."

c. "Let's see how it fits into our budget and what you're going to contribute to it."

5. Our household budget was made by

a. Daddy.

b. Mom, but she had to bargain and cajole for every expense.

c. The family -- money was considered a shared resource.

6. Discussion of money in front of the kids

a. Was never done.

b. Was something Mom did behind Daddy's back.

c. Was done openly.

7. If the family next door got the first color TV on the block

a. Daddy would decide that we could or couldn't get one. There was no discussion.

b. Mom would bust Daddy's chops until we got one.

c. There'd be a family discussion of where it fit into our budget and how everyone would contribute.

8. When Daddy was offered a new job

a. We would move at Daddy's convenience.

b. If we did move, Mom never forgave Daddy; if we didn't, Daddy never forgave Mom.

c. We discussed and planned the move until we reached a mutual family decision.

9. The picture we had of our family's overall condition was

a. That we were well off and that Daddy would provide.

b. That we were in financial difficulties. Mom never seemed to have confidence in Daddy.

c. That Mom and Dad were open about what we could and could not afford; we knew they had a plan that would keep us clothed, housed, and educated.

10. When the subject of money came up, my father's response to my mother would most likely be

a. "Don't worry your pretty little head about it."

b. "Get off my back."

c. "Let's sit down and discuss it."

If many of your answers were a, you probably came from a rigidly traditional household where the father controlled the purse strings and money was absolutely not talked about. The baggage from this household contains the lace collars and high-button shoes that Grandma wore, alongside Grandpa's Victorian starched collars. To break free from this one, you're going to have to break free from the notion that there's safety and security in not knowing anything about money. You're going to have to find new patterns and design new outfits that will reflect your new independent self.

If most of your answers were b, you probably came from a household with a transitional but still basically rigid household, where money was not a comfortable subject. This is the dark side of Donna Reed's Peter Pan collars, crinolines, and white gloves. It's Donna when the TV cameras were turned off. This one can be even harder to shed, because you may be afraid that conflict, danger, and hurt will result if you start taking too much of an interest in the details of your own financial life.

If more of your answers were c, you probably came from a household with a more relaxed, open attitude toward money. This doesn't mean you won't have any problems with money, but you may find it easier to bring them to the surface and deal with them.

Now let's see how much you knew about family finances when you were growing up. Answer yes or no to each question.

When I was growing up:

1. I knew how much my parents earned.

2. I knew how much a new car cost.

3. I knew how much my family's monthly mortgage or rent payment was.

4. I knew whether my family owned or rented our home.

5. I knew what kind of insurance coverage my family had.

6. I knew how much it cost each year to outfit me for grade school.

7. If my family was in financial difficulty, I knew about it, and I was told how serious it was.

8. My parents discussed with us kids what provisions had been made for us in case anything happened to them.

9. By the time I was in junior high, I was involved in my family's monthly bill paying.

10. By the time I was in high school, I was involved in my family's monthly bill paying.

If you answered no more often than yes, you grew up in a household where you were basically kept away from the household's basic driving mechanism -- family finances. This is actually, to one degree or another, the way most of us were brought up. As a result, most of us found ourselves at some point -- when we went off to college, got our first job, married and set up our first household, got widowed or divorced -- suddenly behind the wheel of an immense machine and out in traffic. We had never had a learner's permit. We'd never sat on a parent's lap in the family driveway or in an open field.

If You're Not Convinced You Need to Know This Stuff

Here are a few facts:

* Women live an average of seven years longer than men do.

* There are five times as many widows as there are widowers. The average age at which a woman becomes widowed is fifty-two.

* Divorce is at a record level today. Fifty percent of marriages end in divorce, and more men remarry than women. After a divorce, men are much more likely to maintain their former lifestyle than are women, and a woman who relies on the beneficence of her former spouse can be in real trouble. Only one out of every seven divorced women receives any spousal support whatever.

* According to the Brandeis University Policy Center on aging, the median income of divorced women, as of 1995, was $9,000, and growing at a rate of 1.5 percent a year -- well under the rate of inflation.

* At some point in their lives, 80 to 90 percent of all women will have to take charge of their own finances. This isn't a question of "Maybe I won't have to deal with these issues." You will have to deal with these issues, and you do have to be prepared to do so. The time to learn the Heimlich maneuver is not when you're choking at the dinner table; it's before you sit down to eat.

Your Financial Fashion Profile

The primary factor that governs how you treat money is the way you feel about money. This is what makes our financial habits so hard to break. You'd think that nothing in the world would be more rational than money. It can be counted; it can be measured; everything about it is an exact science. Right?

Wrong. There's nothing more emotion-driven, nothing more deeply personal, than our attitude toward money. That's why it's become the last taboo. We're not surprised at all these days when we turn on the TV and see people making the most amazing revelations about their sex lives. But talking about money -- that's still a no-no. It's what nice girls don't do. It's what real babes can't be bothered to think about.

But it's what women have to think about and have to talk about. We have to go through our own closets. We have to stand in front of that mirror and try on all our outfits. We have to...