BOSTON (WOMENSENEWS)–Though she has not yet identified the property–or even the town in which she wants to live–33-year-old Lisia Moorehead plans to buy a house within the next two years. After that, the Boston technology specialist expects to adopt a child. She intends to retire at age 58.
“Actually, I would like to retire at 40,” she said. “But that is not going to happen.”
To help achieve these goals, Moorehead–on one of the most glorious Saturdays duringBoston’s brief autumn–was one of 1,000 women taking copious notes and peppering financialexperts with questions at a Money Conference for Women, sponsored by Massachusetts State Treasurer Timothy P. Cahill.
The seminars were launched about three years ago by former treasurer Shannon O’Brien, a Democrat who ran unsuccessfully for governor in 2002. (O’Brien now works as a television reporter.)
Since 1999, according to the National Association of State Treasurers, Lexington, Ky., about 14 states, including Delaware, Ohio and Mississippi, have offered similar financial training courses for women. The classes target women of all ages, across all economic levels. Spokesperson Pam Taylor of the treasurers’ association said she expects the courses to be extended nationwide.
Taxpayers Pay Nothing
In each state, the day-long courses are free. Most rapidly reach capacity, or even are oversubscribed, as with the most recent Boston gathering. Corporate sponsors such as New York’s Goldman Sachs and Boston’s State Street Bank donate materials and volunteer time, sparing all taxpayer expense.
Massachusetts Treasurer Cahill, also a Democrat, made economic equity a top campaign issue. He not only vowed to continue the “money for women” conferences, but pledged to add financial summits geared to the concerns of racial minorities, as well as lesbians and gays. Cahill also hopes to schedule a money conference designed for mothers and daughters. And he has slated a women’s financial seminar later this month in western Massachusetts, so that residents of that more rural part of the state will not have to travel to Boston.
“I have five sisters and four daughters,” said the 44-year-old treasurer. “I am very aware of inequities in our retirement systems, in salary structures and elsewhere.”
The high number of women in poverty also places burdens on states, Cahill said. Three out of four working women earn less than $30,000 a year, he noted, and women receive half the average pension benefits of men. Recent statistics, said Cahill, show that “a staggering 71 percent of the nation’s 4 million elderly poor are women.”
Educating women about economic issues may not immediately reduce older women’s poverty, but, Cahill said, “I feel that a lot of the problems we face could be avoided, or at least reduced by providing better financial training for women.” In particular, Cahill said, “women are at a disadvantage because they do not retire with enough money.”
Caretaking Crimps Careers
More often than men, Cahill said, women leave their jobs for family reasons. Some women stop working altogether so they can care for an elderly relative. Women also are more likely than men to take time away from their jobs to serve as “domestic CEOs,” Cahill said, raising children and managing family finances.
“When they go back into the workplace, there is no mechanism for them to buy back this time,” he said.
For many women, the focus on families also means that long-range financial priorities take a backseat to immediate needs, the treasurer said.
“They are focused on today, because they have to be,” he said. “The children need shoes now. The family must be fed now. The elderly parent requires care now. They are focused on everyone and everything but themselves, because circumstances require them to be. Women who head households do not necessarily have the opportunity to think about the future as much as they should.”
That was certainly the experience of Teresa Lammey, a service coordinator at a Boston senior citizens’ residence. Lammey, 45, said she was so busy raising children and helping extended family members that she failed to notice how financially overextended she had become. Before she knew it, Lammey said, she was in credit quicksand, sinking faster and faster, deeper and deeper.
When she saw an announcement for the women’s financial conference in a newspaper, Lammey signed up right away.
“I have a pretty good retirement plan through work,” she said. “So what I really came here for today was to learn about fixing my credit. That seminar around the corner was really helpful.”
Joseph Wong, a financial planner from Boston’s Fleet Bank, helped facilitate the credit session Lammey attended. “This is what the state should be doing,” Wong said. “Banks and other financial companies recognize the role women play in financial matters. Women generally control the family budget–just like my wife. She is an accountant. She makes more money than I do. And she runs the family budget.”
Networking Session about Saving Money
Not surprisingly, at a gathering that was nearly all-female, some of the most important information was exchanged during a noontime networking session. Working the room with a hand-held microphone, Boston-based financial planner Dee Lee sounded like Oprah with an economics degree as she solicited real-life financial advice from her own audience.
In the category of “ways to save money,” Lee drew some of the following suggestions:
Take your lunch to work, four days a week. “Even MacDonald’s costs $5.”
Regularly check your bank statements. One woman said she did not realize for almost six months that her son had arranged for a monthly Internet service to be debited from her account. “It was costing me $47 a month.”
Buy presents for children’s birthday parties far in advance, and in bulk. “Not a single mother ever told me the amount of money that would come out of my budget for children’s birthdays,” a participant lamented. “We have had 11 birthdays this year. It adds up.”
Check fees on your brokerage accounts and find out when they go up. Contact your broker to see if the fees can be brought down.
Make gradual increases in retirement contributions. Start with a 1 percentage point increase, then six months later, go up another percentage point. Six months after that, increase it again. “You will not miss it,” said a woman who successfully used this formula.
Spend a full month analyzing your cash flow. Figure out not just how much you are spending, but where you are spending it.
“To save money means you are going to have to spend time,” Lee concurred. “But a savings even of $100 a month can add up to a quarter of a million dollars for a young woman when she retires.”
More complex discussions took place in individual workshops on investment strategies. But the enthusiastic exchange of information in a huge ballroom, during lunch, showed that the meeting was as much about empowerment as economics, Cahill said. The payoff for the state was potentially significant and for the individual women, the benefits could be even greater.
“Financial autonomy is real independence,” he said.
Elizabeth Mehren is the New England bureau chief for the Los Angeles Times.
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