Over the course of the last year, the majority of jobs that were lost from our economy were held by women. Women have lost 5.4 million jobs during this recession so far — nearly 1 million more than men. At the same time, those of us who are still employed are working harder than ever. In many cases, we’ve taken on extra work from colleagues who were never replaced, and we’re working longer hours just to get it all done.
Add that to new research from Northwestern University which shows it could take an entire 20 years for the gender pay gap to return back to pre-pandemic levels. (And no, that’s not to close entirely, that’s just to return to the gap that existed as we entered this new decade.) All of this begs the question — What should we be doing now to earn more? To empower other women? To not only know our worth but be paid our worth?
Claire Wasserman, founder of Ladies Get Paid and author of the new book by the same name, joins us for episode #260 to break it all down. In her new book, Claire offers a guide for how women can get recognized and rewarded at work, at every career level, and get paid what we deserve.
Listen in as Jean and Claire about how “Ladies Get Paid” got started — as a Slack group in 2016 — and since then, more than 2 million messages have been exchanged in that group. Claire talks about her book, which shares important information on finding a job, pivoting careers, negotiating your salary, getting a promotion, building confidence, battling burnout, getting paid what you’re worth, and time management and productivity — these are all things that so many of us are working on.
She also breaks down the idea of knowing your worth and evaluating your worth, and what it really means to be “paid your worth.” How do you put a good valuation on your work and skills and hours in the day? When it comes to being your own advocate, Claire weighs in with some specific advice: “It’s very important to know that you are doing the work and exceeding the work that’s expected of you, and that you have other folks at the company who are also amplifying your work, who are singing your praises in rooms that you’re not in,” she says.
We also talk about the millions of women who are currently looking for work and pivoting careers, and what we need to be doing in 2021 to make it happen. We’ve heard from many of our listeners that they don’t feel like they can ask for a promotion right now because of the economy. But is that true? Are we “lucky to have a job” or should we always be asking for what we know we’re worth? (I’m sure our regular listeners can guess where Jean and Claire weighed in on this one!)
Jean and Claire also talk about the importance of networking during COVID, and how we can really (actually!) turn networking into a job offer… In other words, how can we turn our excellent social media skills + clever email banter + Zoom happy hour attendance into a foot in the door that leads to a real opportunity? We also talk about networking internally once we’re hired, in a remote work environment… In other words, how we can create strong relationships with our colleagues when we never actually see them.
In Mailbag, we hear from a listener who is considering taking a $40,000 pay cut for a job she really wants, and Jean weighs in on the best ways to protect a listener’s retirement earnings from taking a tax hit. We also hear from a woman who was laid off from the cruise line industry and is worried about her career progression in the coming years. In Thrive, Jean talks spring cleaning your finances.
This podcast is proudly supported by Edelman Financial Engines. Let our modern wealth management advice raise your financial potential. Get the full story at EdelmanFinancialEngines.com. Sponsored by Edelman Financial Engines – Modern wealth planning. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM1969416
Claire Wasserman: (00:01)
It’s very important to know that you are doing the work and exceeding the work that’s expected of you, and that you have other folks at the company who are also amplifying your work — who are singing your praises in rooms that you’re not in.
Jean Chatzky: (00:17)
HerMoney is supported by Fidelity Investments. Whether you’re celebrating a milestone or adjusting to the unexpected, Fidelity’s there to help you navigate life’s important moments with confidence. Visit Fidelity.com/HerMoney to learn more.
Jean Chatzky: (00:34)
Hey everyone. I’m Jean Chatzky. Thank you so much for joining me today on HerMoney. Over the course of the last year, most of the jobs that were lost from our economy were held by women. Women have lost 5.4 million jobs during this recession. So far, nearly a million more than men. And many of us, many of you, are now looking for your next opportunity and your next paycheck. And at the same time, those of us who are still employed, we are working harder than ever. In many cases, we’ve taken on extra work from colleagues who left and were not replaced. We’re working longer hours just to get it all done. Add that to new research from Northwestern University which shows it could take an entire 20 years for the gender pay gap to return back to pre-pandemic levels. And then no, that is not to close entirely. That is just to get back to where we were at the start of this year. All of that begs the question, what do we do now? What do we do to earn more for ourselves now? What do we do to empower other women now, to not only know our worth, but to be paid what we’re worth? Claire Wasserman is no stranger to all of you. She is the founder of Ladies Get Paid. She has been here with us before. And since we last spoke to her, she has come out with a book called Ladies Get Paid. It’s an addition to her already impressive resume. And she lays out how women can get recognized and rewarded at work at every level and get paid what we deserve. Hey Claire.
Claire Wasserman: (02:28)
Hi. Thanks so much for having me, Jean.
Jean Chatzky: (02:30)
It’s really nice to see you again. Albeit from afar. Tell me about the book. It has gotten terrific reviews. Publishers Weekly called it a beacon to women navigating the choppy waters of workplace patriarchy. I love that.
Claire Wasserman: (02:47)
I know. And no, I did not feed that line to them. So the structure of the book is interesting. I found nine real women from the Ladies Get Paid community, and each of them are, you know, they’re going through a different kind of professional challenge. And as I tell their story, I stop along the way and I give advice. Almost almost as if I was career coaching them. But of course, no, I career coach the reader. And it spans the kind of chronology of a career. So I start with very existential questions of, you know, who am I and what do I want to do? And then what are my internal obstacles, right? Life is hard, but am I standing in my own way? So that’s really a discussion of how women are socialized. And then moving beyond that, okay. Now I feel confident to apply for the job. But wait, I have to interview. That also means networking. Then you get the job. You negotiate the salary. You set yourself up for success. You move up. And the end of the book is really more of a macro way of looking at our careers. How do we affect change for all women? What are the policies that our companies can enact, laws that can change, that make it just easier for women to get into leadership positions. So really that’s sort of a conversation around things like paid family leave and universal childcare, which that that’s a conversation a lot of us are having now with the pandemic. So even though I wrote this pre-pandemic, I think it’s just needed more than ever.
Jean Chatzky: (04:08)
I think you’re right. I think your timing has been incredible. You mentioned the Ladies Get Paid Slack group. You were actually my introduction to Slack and I live on Slack now every single day. I bet you didn’t know that, but I think you were probably a lot of people’s introduction to Slack. So tell me just a bit about that group and how it’s evolved since you launched a half decade ago.
Claire Wasserman: (04:33)
Great question. Yeah. So I hosted an event for women to come and talk about money in 2016, or I guess it was a few months leading up to the 2016 election. And oh man, I had no idea that this was going to be anything beyond just an even. But in that event, as we were talking about money, there were so many sub-themes that kept coming up, right? Because money is so much more than just the dollars in our bank account. And I knew I wanted to continue the conversation. And I was just thinking, what would be a platform that would make sense, right? To keep ourselves organized, connected. Slack. And so this Slack group, you know, it’s grown now to almost a hundred thousand women from all 50 States, more than 120 countries. And Jean, I don’t know if I had this data last time we spoke, but over 2 million messages have been exchanged since 2016. So I wasn’t wrong in knowing that there was a lot of conversation to be had. And, in a sense, these women are crowdsourcing their career advice. Full disclosure, we are actually building something else that we are going to debut very soon. Because Slack is fantastic, but we’re not paying for it. And when you don’t pay for it, you actually lose messages — the history of your messages after 10,000 messages. And since these women are speaking so much to each other, which is so great, if you don’t check it today, that job posting that was in our Slack, it might be gone tomorrow. So it works well in a lot of ways, but you know, we need to build our own thing. We we’ve grown up enough.
Jean Chatzky: (06:00)
That’s fantastic. Congratulations on that. And I’m sure I will be on it as soon as it launches. Cause I do find it very helpful and we post jobs for HerMoney there.
Claire Wasserman: (06:08)
Good, good, good.
Jean Chatzky: (06:09)
So it’s been good. I want to start digging into the information in your book with this topic of knowing your worth and evaluating your worth. What does that mean? And what’s the difference?
Claire Wasserman: (06:21)
Yeah. I mean, first we need to understand, are we hesitant to embrace our worth? First of all, I mean, there’s the knowing your worth part, but there’s even like the believing in your worth. And that’s where I talk a lot about imposter syndrome and perfectionism, right? All the ways that we are just so hard on ourselves. You know, oftentimes I ask women, tell me about an accomplishment or a win that you’ve had this past year. And they’re stumped. And when I really dig into it with them, they say, but Claire, that was part of my job description. I was just doing my job or, you know, my work will speak for itself. Why do I have to speak for my work? So there’s a lot of work we got to do upfront about how, you know, we are incredible. We are incredible. And then there’s the, not just what we’ve done, but how we do things, right? Our strengths, our empathy and patience and our creativity and resourcefulness. So things more in the EQ direction that often get taken for granted both by other people and, and even ourselves. And so that’s where the kind of existential conversation gets started in the book. And then there’s the, you know, feeling confident to move forward in a direction that is just unique to you and your values. Getting rid of the shoulds, right? I should do this or I shouldn’t do this or expectations that were put upon us that we’ve now thought they’re ourselves, our voice. But in fact, actually it really came from our community or our parents or our schools. So my joke is, you know, by the book, but also get a therapist.
Jean Chatzky: (07:45)
I’ve always thought it’s a good idea because I do think that we have trouble singing our own praises, right? And a lot of that factors into not just knowing our worth, but feeling that we are worth it. And I’ve always liked this idea of just keeping a folder, a running folder. Whether it’s a paper folder or whether it’s a desktop folder, where when you get a nice email, you plop it in there. When you get a good review, you plop it in there. When you know that you have executed a project to near perfection, you plop it in there. And what you’re creating is sort of a journal that you can use when you go for your next job or your next review.
Claire Wasserman: (08:27)
Yeah. I like to, when I talk about salary negotiation with women in my community, I say, imagine yourself as like the LLC of me, okay? And you are going in to pitch investors on why they should invest in you. Okay, so this is going into negotiate. And you’re not asking for a favor, right? You’re not asking for a favor. You’re asking them for money because you’re going to show them that they can get a return on their investment. And when you take the evidence of the past, right? We call them a brag book or a smile file, which what you’re talking about. It’s just testimonials. And sometimes, you know, for women, it can feel easier to advocate on behalf of somebody else than for ourselves. So getting a little bit of distance from yourself or imagining yourself like as a business, it can be freeing in some ways. The other thing is, oftentimes we feel like work has to be hard, right? If it’s not difficult, we’re not working. When in fact I want us to embrace what comes naturally to us. The kind of work we’re doing, our strengths, how we do it, where we do it. That is the direction we should go in, right? Those strengths we have should be the focus of our role of our job and not just a quote, nice to have. So it is interesting to see how sometimes again, we sort of make life harder for ourselves in a number of ways. And oftentimes we are not even aware of it.
Jean Chatzky: (09:41)
So we’re talking a lot around the emotional language of our worth, right? How do we put a number on it? When it comes to getting paid what you’re worth, how do you take all of that information and put a number on it and then ask for that number?
Claire Wasserman: (09:57)
Yeah. I mean when you say number, of course there’s the money number, but it starts before that. It’s all of the ways that you’ve contributed to the bottom line, okay? And I’ve actually been thinking a lot about this, because women tend to have roles where it is actually harder to demonstrate how you’ve made money. For example, sales dominated by men. Well, that’s easy. You can go, hey, listen, I brought an X client. I made Y dollars. Right? Okay, great. Software engineers, mostly men. They build a product. Well, that product gets monetized. Much easier to make that case. But for women, if we’re in more supportive roles, admin, HR, even marketing, it’s a little bit nebulous. Now you definitely contribute to the bottom line. Otherwise you would not be getting a paycheck from the company. But that means we have to do a little bit of sleuth work. Who can we talk to to see how we’ve impacted the bottom line? And sometimes it’s not money that you’ve made for the company. It’s actually money you’ve saved for the company. So if you are doing the role, you know, jobs of more than one person, okay? If you’ve made processes efficient, if you’ve negotiated with vendors, even contributing to the company culture, that’s huge. Because companies, when they’ve got great culture, it means employees are more likely to stay and be dedicated. They can leverage it to find attractive candidates. Having been in the recruitment space, let me tell you, it’s expensive to do all of that. But it’s on us to draw the connection between our work, our strengths and the impact it’s had, perhaps indirectly on the bottom line. You have to quantify that. The person who can make the most compelling case about how they’ve brought in money or saved money is the one who will get the raise. And I don’t think we’ve spent enough time doing that as women because it’s harder. It’s harder. So I would say, you know, for anybody listening, going, gosh, I’m not sure how to do that, just think about somebody you can talk to. I don’t know if it’s your manager or, you know, even going to the person who’s in charge of budgets. I want to better how this company makes money and all the ways it makes money and my place in that ecosystem. I want to think like an entrepreneur. And if you don’t have the answers to those questions, we really have to go finding them now. Don’t wait until it’s time to negotiate.
Jean Chatzky: (12:06)
There’s a lot of feeling right now in the midst of the pandemic, even with the pandemic starting to wind down, we hope, that if you have a job, you’re really lucky to have a job. And it might be the wrong time to negotiate for an increase in pay. And yet I think statistics and surveys continue to show that many of us are working harder than ever. And not everyone is suffering. I mean, the savings rate in America really has popped. And we know that a lot of companies are doing very well. So how do you frame the argument or the conversation in the middle of a pandemic?
Claire Wasserman: (12:47)
Well, first of all, if you don’t ask, I can guarantee you, a hundred percent, you’re not getting, okay? And also just remember, it’s not really sort of what you say, but it’s how you say it. So you can certainly ask with empathy. You mentioned something, I’m really glad you did, which is not all companies are doing poorly. In fact, think about all the saved money that companies have had over the past year. Travel budgets alone, right? Companies used to send their employees all around the world, but they didn’t use that travel budget this year. Salary increases can come from many different departments, okay? So if you have a creative conversation with your manager, right, what are all the ways that we can figure out cobbling together some kind of raise here, and you work with them. Then that could be a way forward. I would use words like if you were in my position, what would you do? Because guess what? We’ve been in this for over a year now. Everybody, every single person is thinking about how they can get a raise, including your manager. What would you do if you were in my position? I understand that budgets might be tight, but I want to think creatively about this. What can we do together to figure it out? If you’ve been doing the roles of multiple people, listen, yes, they’re saving money by not employing another person, but even if they give you a raise, it will still be less than if they had two people, two salaries, two different sets of benefits. So as long as you come up with solutions for, you know, again, creative ways to get to the number you want, you’re open to their ideas and you seek their advice. Just listen to, if it’s a no, can it be a, not yet? Are there other avenues for growth? Full compensation, right? There’s other perks you can get. If it’s still no, no, no, and there’s zero timeline for any kind of movement, whether it’s salary or promotions, then is this a company that is just simply not going to support you in your upward momentum? And so my advice here is my advice all the time, which is please be networking. Constantly, have your eyes and ears open for other opportunities. Because at the end of the day, the strongest negotiators are the ones who are able and willing to away, though I hope it doesn’t get to that point for you.
Jean Chatzky: (14:54)
I think that’s wonderful advice that we should always be networking. We should always be looking, even if we’re just looking with one eye open. I want to come back to this in just a second cause I have so many more questions for you. But before we do that, let me just remind everybody that HerMoney is proudly sponsored by Fidelity Investments. Some of life’s important moments are planned for way in advance. Others, like many of the ones that we’re talking about today, we just don’t see coming. And as always, Fidelity is here to help you navigate both the joyous and the unexpected events with confidence. Their resources, their guides, their tools can help guide you through important financial decisions when you need it most. And you can visit Fidelity.com/HerMoney to learn more. Confidence, as I just pointed out in talking about Fidelity, competence is hard. It’s hard, particularly for women. It’s hard when it comes to investing, but I think it’s hard in any arena where our money is concerned, including salary. So how do we get our confidence and then keep it throughout the day, week, month, and year.
Claire Wasserman: (16:08)
Confidence comes from money. I’m so glad that you, you know, shout out to Fidelity cause I actually recently opened up a Fidelity account. You know, to my point earlier, if the strongest negotiators are the ones who are able and willing to walk away, money gives you options, okay? It gives you freedom. So you can go in and assert yourself without fear of being put out on the street with no money if you have savings, right? If you have investment. So that alone will give you confidence. It’s not just about kind of bolstering yourself up with mantras, right? It’s the bank account that counts. It’s also making sure you have allies that you know what’s going on, right? That you’re not sort of assuming that your boss needs something from you. You have open communication. You really understand their expectations. How they define and measure success, right? It’s very important to know that you are doing the work and exceeding the work that’s expected of you and that you have other folks at the company who are also amplifying your work, who are singing your praises in rooms that you’re not in. So that networking piece, yes, externally, right? Keeping one eye open, as you said, to finding work. But it’s equally as important to network internally because a) that will build your confidence. But b) that will probably open up opportunities for you to grow. Really. It doesn’t just come from you raising your hand. It comes from people raising their hands along with you.
Jean Chatzky: (17:27)
How do we do that in a remote work environment. I think all the time about my daughter who was laid off early in COVID. She was working for a PR firm that specialized in restaurants. No surprise there. Everybody was laid off. But she got another job and she’s doing great. She is working for people she’s never met, never met in person. And hopefully she will get to meet them and get to have lunch outside somewhere sometime soon. But there’s so many people in this boat. How do we network with people we’ve never even met?
Claire Wasserman: (17:59)
I see this positively actually. Because sometimes, especially if you’re an introvert, it can feel kind of awkward just swinging by somebody’s desk. And you know, how are you doing? Of course, online can not replace the in-person connection. That being said, you can build relationships. Email people, Slack them and say, I really admire your career. I’d love to learn more about you and introduce myself, see if I can support you. Do you have 20 minutes? Because the only reason people will say no is that they are too busy. But if you give them a framework for how long this is going to take and why you’re reaching out, they know that they have to network too. Especially when you say things like, how can I support you? And you add a little bit of flattery into it.
Jean Chatzky: (18:42)
That is it. That one sentence. How can I support you? I think when we’re asking for a raise, when we’re asking for 20 minutes of somebody’s incredibly valuable time, that by the way they do not have, you’ve got to just put it out there that this is not all about me. This is about you. You’re going to get something from this. And I know that may seem like a very callous way of thinking about it, I think it’s the only way to get to a yes.
Claire Wasserman: (19:10)
Oh absolutely. You know, and even reaching out to somebody that you know is a parent and saying, hey, how are you doing? Hope you’re doing okay. But even just little comments of support like that and promoting things. If you see on LinkedIn or Instagram that somebody spoke at a conference or had an interview, share it to your network and say, I’m so proud to know this person. That’s a place to begin. Definitely gets you visible. And don’t think that just because maybe you’re junior or just younger than the other person that you can’t support them. You’d be surprised actually. When people ask me, I say, wow, first of all, thank you. And second of all, yeah. Spread the word about this. Or if you’re looking to hire somebody, keep your eye out. So just don’t make any assumptions, and offering support, it goes a long way.
Jean Chatzky: (20:01)
We’ve got a pay expert on the show today. So I’m going to take an additional five minutes of your time and weave you into our mailbag. And I know I’m surprising you with this question, so I hope you don’t mind. But as you know, we do this mailbag segment. It’s maybe the most popular segment of our show. People love it. We get a lot of letters about things like pay, things like salary, and we’ve got one of them today. And so I’m going to read it. And I’d love to get your take on it. I’ll give mine as well. And then we’ll transition with Kathryn into the rest of our mailbag. Does that work for you?
Claire Wasserman: (20:41)
Ooh, I’m so excited.
Jean Chatzky: (20:42)
Okay, here we go. It says hi Jean and Kathryn. Thank you so much for all you do. I love listening to your podcast every week and I’ve gained so much knowledge from it. I started job searching recently and I’m in the process of interviewing for a position I’m excited about. It’s a career change move with a significant decrease in pay at first, but it’s going to put me on a path toward long-term success. I am overqualified for the position, whether it’s this position or another entry level role at the same company. I’m confident I’ll be able to get my foot in the door at this new company in the near future to make this change. They are actively hiring. I’m 27 years old. I have $81,000 in my 401k and Roth 401k combined with $77,000 of that being fully vested. I’ll be fully vested in September. I’ll also get a bonus of about $5,000 in October. My question is, how do I handle the situation if I get this job. I started conversations with people in my network planning for this change in the fall, but not thinking there would be open positions already that they would refer me to. If I get this job within the next few months, I’ll leave a significant amount of money at my current employer on the table. However, I don’t want to miss out on this opportunity. And I don’t know if it’s appropriate to delay my search at this point and or a potential offer. I know I have a lot of money saved for my age. So does $4,000 really make a difference? My new potential employer would also offer a much better matching program, so I’m confident I’d make up for it longterm. Not getting my bonus this year also makes me nervous, but I do have a ton of money saved, $75,000 between an emergency fund and investments, and would be able to pay for my current lifestyle even with a pay decrease and without the bonus. However, we are planning for a house in the next few years, so having that extra money would help. I hate the thought of missing out on money that I’ve worked so hard for and earned, but I don’t want to miss out on a great opportunity that might not come around for another year or more. I feel ready to make the leap if I get an offer and the money situation is the only thing holding me back. Do you usually recommend taking a pay decrease, probably close to $40,000, if it’s the right move for your career long-term? Any advice is much appreciated. What do you think Claire?
Claire Wasserman: (23:14)
These are great things that she’s thinking about. I almost feel like she kind of answered her own question here, which is I am financially ready to make this leap. And also, something that I loved, what she said was long-term. Many of us, we think short-term either because we’re drowning in debt, right? We don’t have the ability to potentially walk away like she does, or we’re just so overworked that we can’t even think beyond the next day and the next week. If she can keep networking and find an opportunity where she actually is a little better qualified, right? She said, this is kind of underneath her, my understanding, that means that there could be something else out there. She’s not in a toxic situation at work where she desperately needs to leave. I know she has some fear about finding another opportunity, but again, if she’s a bit overqualified, then I’m not quite sure that that fear is correct. So I would say, it’s a tough call. I mean, pivoting, you are going to have to take a pay cut oftentimes, because you don’t have the experience that they need you to. I might say wait, only, only, only because she said she feels a bit overqualified for this, and she’s not in a bad situation at work. That being said, if you have the financial ability to take risks, I mean, that is, to me, the reason to have financial stability, is so that you can take the risks in your life. So I’m a bit torn. What do you think Jean?
Jean Chatzky: (24:34)
Yeah. The overqualified point was the only one that stopped me as well. I did this when I was her age. I had set myself up with a job on Wall Street because I was looking to get my chops in personal finance. I’d been told I needed to get an MBA. I wasn’t going back to school, but I went ahead and I got a job on Wall Street and I was making more money than I had ever made in my entire life. But my goal getting that job originally had been to get the chops to become a personal finance reporter or a business reporter. So I was making about $50,000 a year on Wall Street. And I got offered a job as a reporter at Forbes for $24,000 a year. Half of my salary. A little less than half my salary. And no bonus, which you got on Wall Street. And I took it and it was the right move, within a year and a half had moved from Forbes to Smart Money and was once again making $45,000 a year. So as long as you’re putting yourself on the right path for success, I think you’re fine. I just would be very careful about recognizing how overqualified you are, because I think if you’re tremendously overqualified, you’re going to be frustrated doing the work. And that’s not the point.
Claire Wasserman: (25:55)
Yeah, that’s really good. I also, if she hasn’t already, I would definitely reach out to people who are either in that role, who’ve been in that role, whether it’s at the company or elsewhere, and ask them what they think and the challenges that they have at work. If you know for sure that you are overqualified, that means you are going to be an incredibly attractive candidate for any other company also. So just make sure you’re not taking the job out of some kind of fear or desperation, right? We don’t want to make choices from a kind of negative place. That being said, life’s too short to do something that you don’t love. So, ooh, I don’t know. Hopefully this was helpful.
Jean Chatzky: (26:33)
Very helpful. Very, very helpful. Claire, thank you so much for spending the time with me today. Congratulations on the book. It’s called Ladies Get Paid. Where do we find you?
Claire Wasserman: (26:44)
Anywhere and everywhere I’m @ClaireGetsPaid on Instagram and you can come join the Ladies Get Paid Slack group at LadiesGetPaid.com. You can also learn more about the book and where it’s available at LadiesGetPaid.com/book. Thank you, Jean. Thanks for having me here. I’ve admired your career at first from afar, but so honor that I get to know you and read all of your books. And I just appreciate the opportunity and thanks to everybody for listening. I hope you found this helpful.
Jean Chatzky: (27:09)
Talk to you soon. Thanks so much.
Claire Wasserman: (27:11)
Jean Chatzky: (27:11)
We’ll be right back with Kathryn and the rest of your mailbag.
Jean Chatzky: (27:22)
HerMoney’s Kathryn Tuggle joins me now. Hey Kathryn.
Kathryn Tuggle: (27:26)
Hey Jean. How are you doing?
Jean Chatzky: (27:28)
I’m doing okay. I’m doing okay. I’m having a little trouble getting my words out today. I’m not sure exactly why. Maybe I’m down like one cup of coffee or something. Elliot actually said this morning that he made the coffee wrong. That he usually has his very scientific system. We don’t use a Keurig or anything with pods. But we have a Cuisinart coffee maker. It keeps the coffee very hot for a long number of hours, which is important to me. And usually he puts in four and a half scoops of coffee to make a 10 cup pot. And we kind of mix it between decaf and regular so that we can drink more over the course of the day without getting the shakes. And today he said, you know, I only put in three and a half scoops of coffee for the full 10 cups. He meant to only put in like seven cups because he was going out today and he knew he wasn’t going to drink as much, but he just forgot and put in the full 10 cups. And then he just pushed the button anyway. Actually tastes fine, but I don’t think my brain is working as well.
Kathryn Tuggle: (28:40)
I think that the takeaway here is that Elliot is to blame. And that now that you’ve had your first vaccine shot, you have to go out and treat yourself to like a nice Americano so that you can make it through the rest of the day.
Jean Chatzky: (28:55)
I am going to do that. I’m absolutely going to do that. That is a really, really good idea. I’ve been trying to get out and walk outside because the temperatures have warmed up and I’ve been wanting to get off the treadmill. Since I had my back surgery, I am not allowed to run yet, which is incredibly frustrating as all the runners in our audience will know. Not to be able to run as it turns into a beautiful spring. But I have been walking a lot. And so I think maybe I will walk myself into town to get a cup of coffee and then walk back.
Kathryn Tuggle: (29:31)
That would be a long walk, right?
Jean Chatzky: (29:34)
It would be. I’ve been doing three miles. This would bump it to four. But I think I’m ready. I think I can handle it.
Kathryn Tuggle: (29:41)
Yeah, absolutely. Especially on a beautiful day,
Jean Chatzky: (29:44)
On a beautiful day, when I’m taking a break. So there you go. Thanks for the inspiration. All right. Let’s finish up our mailbag cause I know we’ve got a bunch here.
Kathryn Tuggle: (29:55)
We do. We do. Our next question comes to us from Helen. She writes, hi Jean. I’m a long-time listener and follower of yours, and I do appreciate all the advice you’ve shared. You inspire women to take control of their finances, and I would love your thoughts on my situation. I’m a 50 year old woman, single with no kids. Due to the pandemic, I was laid off in the fourth quarter of 2020. I was a tech consultant and my AGI was $170,000 in 2019. I’m pivoting and looking to switch careers to become a therapist, and I don’t expect much income in 2021. With that being the case, I’m considering making Roth conversions to take advantage of my expected lower tax bracket. What do you think about this approach? Here are the details. Combined 401k accounts $1.1 million, IRAs $400,000, brokerage account and savings $600,000. In all likelihood, I’ll make less than I have in my previous career and I want to make sure I keep as much as possible from the IRS in my retirement. I appreciate any insight you might have. Thanks again for all you do.
Jean Chatzky: (31:03)
Hey Helen. I first of all want to say congratulations on your pivot. I think that that sounds incredibly exciting. And I think this is a good overall strategy for you to consider. You are looking at paying taxes at a lower rate next year on the money that you convert to a Roth because you’ll have less income. And as long as you expect your tax bracket down the road to be higher, then it’s a good move. It’s also a good move for anybody who thinks taxes overall will be higher in the future than they are right now. And I think if you’ve been reading the newspapers, looks like that may very well be the case. So two things I would advise here. First, we don’t want to see you pull money out of retirement accounts, out of tax sheltered accounts, in order to pay the taxes on the conversion. You said that you’ve got a substantial amount of money in brokerage and savings. That’s where I would look to get the money to pay the taxes on the conversion, particularly savings. But as far as the overall picture, you’re talking about a lot of money here. And I’d like to see you sit down with a financial advisor who can run some scenarios for you, to figure out how much is the right amount to convert and, specifically, which assets you should be converting. If you’re looking for a financial advisor and you don’t have one that you’re currently working with, go to HerMoney.com. At the top, we’ve got a banner and you’ll see that it says, find an advisor. And we will introduce you to typically three financial advisors that have been vetted through our partnership with Wealthramp. Nobody’s going to reach out to you. This is a free service. It’s up to you to make contact with the advisors that we serve up to you. But they’re all advisors that a) have been vetted and that b) we feel comfortable with. So good luck with all of that and let us know how it goes.
Kathryn Tuggle: (33:26)
Yeah. Please keep us posted that. This is the kind of thing that I feel like is always a multi-pronged approach. There’s probably going to be a few different tools in the toolbox that you can use to streamline this and ensure that you pay as little in taxes as possible.
Jean Chatzky: (33:41)
A hundred percent. That’s always the name of the game, isn’t it?
Kathryn Tuggle: (33:44)
Yes, absolutely. Our last question comes to us from Alison. She writes, I was recently laid off on my 62nd birthday. I’m currently really stressing out as I know that the decisions I make now will have far reaching consequences for the future and I almost feel paralyzed and unable to make a decision. This is the first time in my life I’ve been laid off or lost a job, so all of this is a bit daunting. I was in the cruise line industry and was an HR director for shipboard staff. The cruise industry is going to change greatly. And when it does return, I feel for me, at my age, it can be very difficult to find a position. I have no idea what to do with what little capital I do have to save as much as I can and how to even start to reinvent myself at my age. I’m worried about what I should do. When unemployment runs out. I made $61,000 a year when I was working and this barely kept my head above water. My house currently has $200,000 in equity and I owe about a hundred thousand dollars. I was in the process of refinancing to bring my payments down, but I lost my job while in the process. Should I sell the house? It’s been my home for 19 years. My payment is around $1,200 a month, including taxes and insurance. In terms of other debt, I have $17,000 in credit card debt with payments of $690 a month. Please note that I incurred this debt to pay medical bills for myself and my dog. Do you think I should take money from my 401k to pay this off? On my car, I owe $7,000. I have $5,000 in emergency savings, $175,000 in a 401k and $9,000 in a traditional IRA. My situation is not all doom and gloom. I’m trying to look at this as a new start. But with being single and having made some bad financial decisions in the past, I would really appreciate some advice. Thank you.
Jean Chatzky: (35:37)
So first of all, let me just say that I’m really sorry, Alison, that this has happened to you and that you’re in this position right now. But I don’t think that the situation is all doom and gloom as well. I think that you need to focus on the fact that you were an HR director. That is an incredibly transferable skill. Every industry, every company of a substantial size needs people in HR. And you were somebody with a lot of experience in this field. You need to write a resume and craft a story that sells the fact that this is your expertise. Not that relies on the fact that you were in the cruise industry. I think that the doors are going to be wide open for you as long as you can figure out how to write your story and then tell your story. And to that end, I think you may want a little career coaching. If you’re looking to pivot in this way, and it is a little bit of a pivot, not a huge pivot, having a fresh set of eyes look at all the different things that you’ve done and help you put your best foot forward, if that’s something that you’re having trouble doing yourself, I think could be a terrific investment of a few hundred dollars. So that’s my first piece of advice to you. It’s not exactly what you asked for, but I think it’s going to be very important as you move forward. As far as your current financial situation, while you’re trying to pivot, I would try to tread water for as long as I can. First take a very good hard look at your budget. See what’s coming in, what’s going out and where it’s going down to the dollar. You want to minimize your spending as much as you possibly can. And then you want to look to accumulate as little in additional debt as you possibly can. Let’s sort of take the pieces here that you laid out one by one. The house is, at roughly $1,100 a month, a pretty reasonable place to live. I would certainly look at what alternate living arrangements would cost in your area before you make any decision, but there’s a cost to selling and there’s a cost to moving. And although it would give you some cash, it also leaves you without a place to live. Think about that house as a different sort of asset. Could you rent out an additional bedroom in that house? Could you take in a roommate? Could it produce income for you in another way while you are treading water? As far as that credit card debt is concerned, look, nobody’s going to judge you for that credit card debt. I think when you write that you incurred it as medical bills for yourself and your dog, you’re worried that we’re going to judge you. We are not going to judge you. This happens. And we just want you to put yourself into a position where you can pay it off as inexpensively and as cheaply as possible. I would not take money out of your 401k. You’d have to do it as a withdrawal, which means taxes would be owed because since you’re no longer with the company, you can’t borrow from that 401k. Instead, get in touch with the creditors, get in touch with the credit card company. See if there’s anything that you can do to reduce those interest rates. And if not, just keep paying it off out of the money that you’ve got in your savings right now, on a monthly basis while you look for another job. Same is true with your car payments. I think as soon as you start moving forward, you’re going to start feeling better. And I hope that you will be able to find a job that enables you not just to tread water, but to put a little bit more away for the future that is coming down the pike in a few years. I hope that that’s helpful. And, again, please let us know how it goes.
Kathryn Tuggle: (40:05)
I think the thing that struck me the most was her experience as an HR director. And I think maybe she’s too hung up on the fact that the cruise line industry is in trouble right now. The cruise line industry may be in trouble for another year. But your experience as an HR director translates into any number of industries.
Jean Chatzky: (40:24)
A hundred percent. A hundred percent. So focus on that, not on cruise ships. Get a little sprucing up of the resume and the cover letter and the story. Practice it with a friend. Practice telling your story. Practice selling yourself. You need people telling you how great you are because clearly you’ve been doing this for a long time. I cannot imagine that being an HR director on a cruise ship is easy. I think I’ve probably watched a little bit too much below deck, but it is not an easy industry. It’s not an easy job. And I think that you’ve probably got chops that you don’t even recognize.
Kathryn Tuggle: (40:59)
Absolutely. Thank you Jean.
Jean Chatzky: (41:01)
Thanks, Kathryn. In today’s thrive, let’s spring clean your finances. Not only can a financial deep clean help you save and get your money goals back on track. It can also help you prevent late payments on bills, and help you avoid losing items that you may have to spend hours looking for. Scouring your finances and getting all your accounts in order can even help prevent falling victim to identity theft, which costs headaches galore for the millions of people who go through it each year. How? During a cleanup, you update your passwords on any old accounts. You move retirement accounts that may be lingering unattended into a rollover that you can keep an eye on. And you go paperless so there are fewer opportunities for thieves to raid your mail. At hermoney.com this week, we’ve got to look at what you need to do to cut the clutter and get back on track for 2021. Here are just a couple of our favorite tips. Number one, pair down the paper. One of the most popular articles we have ever published at HerMoney is on the documents you need to save, to keep, and to toss come tax time. If you’re curious, just head to the website and take a look. But essentially keep anything tax-related for three years and anything tax-related where you took a loss for seven. Keep paperwork relating to assets, like homes and cars and investments, as long as you have those assets. Keep social security cards, birth, marriage, and divorce certificates, and estate planning documents forever. And preferably you want to keep them in a fireproof safe or a safety deposit box. Number two, simplify your maze of accounts. The average career professional will change jobs 12 times during their working years. And when you add that to the fact that many of us have side gigs and freelance income, before long, we are looking at a complicated roster of retirement accounts. Personally, I like being able to sign onto one place, one portal or two, just to look at my investments, and this way I never have trouble keeping things straight. So try to roll those accounts together so that you can view them with one or two brokerage firms at most. Finally, move from chaos to control. If you are feeling like you need to reign it all in, consider joining me and my team of coaches and our next session of finance fix. This is our eight-week coaching program. We are launching new sessions all the time. Seats are always limited and they fill up fast. And you can get more information at FinanceFixx.com. We spelled fix with two X’s, by the way, but we will put the address in the show notes. The folks who’ve already gone through the program, and we’ve had couples in addition to women, say that they are feeling much more confident and much more in control.
Jean Chatzky: (44:03)
Thank you so much for joining me today on HerMoney. Thanks to Claire Wasserman for joining us to tell us all about her new book and how we can not only know our worth, but get paid what we’re worth. I love her optimism for what we can accomplish when we’re all working together. If you like what you hear, please subscribe to our show at Apple podcasts. Leave us a review. We love hearing what you think. We’d like to thank our sponsor, Fidelity. We record this podcast out of CDM Sound Studios. Our music is provided by Video Helper and our show comes to you through Megaphone. Thanks so much for joining us and we’ll talk soon.