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Women Mean Business - January 2009

Posted by Jill Kerby on January 01 2009 @ 22:03

Letting your personal finances get out of control is just as easy as losing sight of your waistline – especially when your banker was so keen to encourage that spending binge. So why not set up a ‘MoneyWatchers’ club to trim up your bank balance and slim down your credit card balance, asks Jill Kerby.

 

Here’s a novel New Year’s Resolution to mull on…join a money club in 2009.

 

I came across the notion after reading a New York Times article about five mainly thirty-something professional women in Vancouver, Canada who were desperate to lose their disastrous spending habits and monstrous credit card balances.  

 

Described by the NY Times as a “one part Debtors Anonymous and one part Weight Watchers, a bit like the investment clubs that were popular in the 1990s but with every part of our financial lives under the microscope”, ‘The Smart Cookies’, (see www.smartcookies.com) as they are known, have now written the inevitable book, ‘The Smart Cookies Guide to Making More Dough’.  Clever and cute in a Martha-Stewart-on-Manolos sort of way, perhaps the book was even part of the plan right from the start to get themselves out of debt and onto the money pages of the NY Times and other media.  But as my mother could never resist saying when a cynical daughter rejected a perfectly good idea (because she hadn’t come up with it herself): there’s more than one way to skin a cat. 

 

Getting your personal finances in order by sharing your money misadventures with others  - and other women of a similar age and experience in particular – has a certain appeal.  In my experience, both personal and observed, money is a difficult subject to discuss at the best of times, but especially with most men of one’s acquaintance.  

 

For example, once you move out of home, admitting to your father that you’ve made a complete haims of your finances is pretty humiliating and regressive, especially if he’s positively pleased that you came home to him for the bail-out.  Daddies suffer from empty nest syndrome too, especially when it comes to their little girls. (This only works once, by the way. The next time he’ll be properly pissed off, especially if your mother is carping on about how irresponsible you’ve been.)

 

Next, husbands.  My experience of the vast majority of married couples is that they have never had a formal money discussion – the kind in which all financial cards are put on the table and sorted into orderly piles like assets, debt, tax, savings, investments, retirement provision, succession planning. Since most working women still earn less than their husbands, going to your husband to admit to a debt problem can seem worse than going back to your father (but is a better idea, ultimately).  It is for this reason that money issues should always be discussed before, as well as during a marriage.

 

Boyfriends don’t really count, unless they are very old and very rich or long term co-habitees, and maybe not even then. The ones you are simply dating will sympathise with your credit crisis, but are unlikely to hand over any cash (nor should they).  They may be in worse fiscal shape than you are, and would you want to bail them out? You also take the risk that they will interpret your profligacy as a problem…that isn’t theirs…yet…but could be.

 

Bank managers? They have problems of their own these days, what with the value of their personal bank shares having fallen by more than three quarters over the past year. All the umbrellas are locked up in the vault again now that it’s pouring, and as one bank manager of my acquaintance put it so pithily recently: “If you need a friend, get a dog.”

 

Which is why the women-only money club idea has a certain appeal, though I can see how it might be rife with difficulty.  Who should join?  Sisters and cousins who already know your spending habits intimately?  Work colleagues who may not know exactly how much you earn but have a pretty good idea how much you spend?  Neighbours?  The women you work out with at the gym? 

 

As with investment clubs, it may be a good idea to set up some rules and appoint officers for the money club, suggests The Smart Cookies.  They particularly stress the need for a confidentiality clause that (hopefully) ensures that what is spoken about in the club is kept within the club.  In their case, a condition of joining was that members shared their financial records – bank statements, credit card records, pension fund details, etc., so that the nitty-gritty of everyone’s overspending and poor budgeting could be ruminated upon by the group and individual and collective solutions devised.   

 

‘How North American’, I hear you say.  Since money is the last taboo in Ireland, if you don’t think your fellow spendthrifts can keep their lips sealed once they leave a weekly/bi-monthly/monthly meeting, you might want to keep the agenda somewhat more informal and generic.

 

With recent research by Hibernian Insurance showing that about three quarters of Irish adults admit that they need help with their personal finances and don’t really understand how much of it works, just getting together with like-minded friends or family members and discussing pressing money issues has to have some positive effect. 

 

For example, you could set assignments each for each meetings – say, researching how credit card interest works, how long it would take to pay off a typical €5,000 balance if you only pay the minimum payment (a long, long time), what are the best value cards on the market and what you need to do to qualify for one. 

 

You could apply the same research and report principal to mortgages, personal loans, tax relief, pensions, investments, will-making, etc.  How ‘expert’ your report will be depends on the amount of research and fact-checking that is done, but there is plenty of objective information available – the Financial Regulator’s internet site www.itsyourmoney.ie is as good a place to start as any – to get you started.  A small investment in some good financial guides and money books wouldn’t go amiss either. 

 

Moral support is cited as an important feature of any money club; talking about a problem, like how weak-willed you are every time you see the word ‘Sale’ or even how you can’t bear to tackle the pile of overdue bills that are overflowing on the hall table, can be a first, constructive step. Like with a diet or AA buddy, members can even offer to be there for each other - at the end of a phone line or by e-mail – to talk you out of a compulsive spending moment that you will know you will live to regret. 

 

That isn’t to say that if you’re losing sleep about the size of your debt and are about to lose your home that you shouldn’t throw yourself at the mercy of your bank manager, and if that fails, at the local MABS* counsellor.  

 

Professional assistance in re-scheduling impossible mortgage payments or other bills that are in arrears should be sought as soon as possible to avoid court action or a visit from the sheriff. But for every hard case of desperation, there are probably a dozen others of women who lost the run of themselves buying a slightly more expensive car than they should have; or have been using a couple of credit and store cards on the run when they really should have had only one tucked in their wallet.  These are personal spending attitudes and habits that need changing, and a group of like-minded friends to thrash out all the issues and to try and come up with workable solutions may be all you need. 

 

A money club is only going to be as effective as its members are committed to its core goals – to help each other sort out their pressing financial difficulties and to move onto a healthier attitude towards the use of credit and debt.  Once that’s tackled, saving and investing becomes much easier and less contentious, even in today’s tumultuous financial times.

 

Maybe because we are facing such tough economic times that money clubs might catch on.  Before it was expropriated by the professional counselling industry, self-help groups, though they weren’t necessarily described that way, were the backbone of every community where people were having problems.   

 

Women seem to be particularly good at coming up with ways to provide practical solutions, all the while interweaving them with other old fashioned notions of friendship and sisterhood.  The foundation bones are already there – whether it’s the Irish Countrywomen’s Association or Network. 

 

Smart Cookies indeed. 

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