It's OKAY to Put Yourself First

“Today it is more important than ever that women become and remain financially literate.” This was the opening statement made by a speaker for a non-financial workshop at the 1998 annual conference of the American Society on Aging. She wanted to be certain to deliver this advice (admonition?), before beginning her presentation.

The importance of this statement was re-validated for me when I read a brief interview, (in 1998), with the much-acclaimed playwright Wendy Wasserstein, (The Heidi Chronicles, etc.) Ms. Wasserstein is an intelligent, successful single person in midlife. The article stated she puts her advances and earnings in Certificates of Deposit. While CDs are “safe”, Ms. Wasserstein is probably losing money on her money because CDs pay so poorly. Wendy, you can get the same rate of return by stuffing the money under your mattress! Get with it!

What does “financial literacy” mean?

“Financial literacy” is not aiming to “time” the stock market. It’s about understanding your options, both short and long term; knowing what your cash flow is; your assets, and liabilities; having a will, durable power of attorney, health care proxy; knowing where you want to go and how to get there. The saying “When you don’t know where you’re going any road will do” still applies. There are fewer aspects of life over which we have actual “control” than there are those over which we have influence and/or choice. Choosing to be financially literate, or not, directly impacts the influence we exercise in shaping our later decades, our “retirement” or “unretirement”, our “third half of life”, as some have labeled it. Financial literacy, together with financial planning, should be the “diet” regimen of our economic life and another aspect of informed personal development.

Recent events have heightened the imperatives

That women should plan for their retirement, rather than attach it to someone else’s retirement, (spouse or significant other), is a fairly recent change. But at least one fact has not changed: Women have always worked, (and in terms of being responsible for running the household, have been managing and budgeting for generations). The old adage about men working from dawn to dusk while women’s work is never done is no less true today. In fact, it may be MORE true, due in part to our modern and ever changing technologies. Today we can take our work home via our laptop, be phoned or faxed in our car, do our laundry at any time of the day or night, and the list goes on. This combines with the economic realities requiring two-income families as well as the growing number of women who must be self-supporting. Women have been “multi-taskers”, to use a term popular in the current job-market vernacular, since the days of the cave dwellers. Why should financial literacy and the role it plays in shaping retirement be regarded or assumed as someone else’s assignment?

Concerns from the past remain concerns in the present

Approximately 5 years ago PERSPECTIVES, (Canada), devoted an entire issue to retirement. The lead article, by Janey Kennedy, was Road to Retirement for Women Often blocked by Barriers. Kennedy opens by asking, “Are today’s women at risk for poverty in retirement?” Midlife, (by which I mean the years between 38 and 62), women in the U.S. express with alarming frequency their fear of becoming “bag ladies” in their elder years. Those who reveal this anxiety are not limited to single women with no or low paying jobs. Being (1) female and (2) elderly, [62-80 = “young” old, 80-100 = “old old”, 100+ = very old], is termed in the social sciences a “double jeopardy.” If you add being an ethnic minority, then the risks of a triple jeopardy emerge. Few persons in the U.S. today, male or female, and in the range of ages 30 to 50, have faith that Social Security will have funds with which to help sustain their elder years. And the Social Security system in the U.S. has been generally regarded as one of the all-time most successful social programs ever, anywhere.

[When Social Security was enacted in the U.S. in the early 1930s, “retirement age” was pegged at 65. We have Chancellor Bismarck of 19th century Germany to thank for this arbitrary target, which has become a linchpin of work concepts in the Western World. Average life expectancy for a male living in the U.S. in the 1930s was below 65. Pledging to provide income at and after retirement – and this was built on the male model – was what we now term a “no brainer.”]

The longer life-less money dilemma

Men usually live between ten and 15 years- on average- beyond 65 now, and women usually live even longer. Part of the heated debate and concern over Social Security, and Medicare, in the U.S., is driven by the new realities that increased longevity brings with it. In countries which provide a more distinctly socialized form of medical care than HMOs and Medicare, there is also cause for concern. Taken to the most basic level, the individual, increased longevity plus economic concerns make it essential that we plan for our later decades, and that we guide the younger generations along the same pathways. (When I was in elementary school, teaching “life skills” was part of the math program. For example, we learned how to write a check and balance a checking account.)

I have a friend who is a Certified Financial Planner. Several years ago she was enlisted by the American Association of Retired Persons, (AARP), to deliver a program they had developed for the purpose of providing older women a financial planning guide. The pilot program, entailing three 3-hour sessions over a 3-week period, was intended to make this information available to women aged 60 or more. It was offered it free of charge at our local senior center. I attended, also. (This meant my friend and I were the two “youngest” women present!) Twenty-two women, average age 68, signed up. Only one dropped out (and she returned for a subsequent series.) Most of these women were widows and more than half of them were dependent upon Social Security – their late spouse’s, primarily – for support. The program required “homework” by the participants, and my friend was concerned this would be disincenting.

Rather than being daunted by the detail work of getting their various papers in order, (where’s the will, the insurance policy/ies, who is/are the doctors, what are the burial arrangements, if any, etc.); these women had two major questions: Why hadn’t this been offered to them years ago and could their daughters, or daughters-in-law, enroll in the program? What message can we take from this? That senior women know, retrospectively, they were not encouraged to become informed about these issues, which were categorized as “men’s business”, and they want it now, and for the generations following them to obtain and wield this knowledge as soon as possible. (My mother is in her nineties and she and my father were married more than 50 years when he died. All his good intentions notwithstanding, she didn’t know how to balance a checking account. Her situation was not unusual for a woman of her cohort. Today, there would – should be - be no excuse for such a basic lack of financial literacy.) I teach a college class on women’s midlife transitions. Despite the class title and description, there is usually at least one twenty-something in the class plus several students in their early thirties. The first message that clicks for them is that they can and must become knowledgeable where their personal finances are concerned. While this may seem surprising to you, they find it a very empowering proposition.

The impact(s) of pay inequity remain…

Two key factors Ms. Kennedy notes in her article are the preponderance of lower paying jobs available to women and the lack of equal pay for equal performance. Just as they constitute more than half the total U.S. population, women dominate the workforce – but in numbers, not earnings. The discrepancy is often demonstrated by citing the small number of CEOs, board directors, and other highly compensated positions filled by women. (Interestingly, more small businesses, especially entrepreneurial hi-tech and service businesses, have been started by women than by men in recent years, but these carry no guarantee of success.)

Lower pay carries both short and long term consequences. As regards pay and opportunity, much still needs to be achieved. This presents another powerful rationale for financial literacy. It also exposes the need to re-view how we manage our cash flow and to adopt what may seem a “reckless”(new) approach: Putting ourselves first.

My parents were young adults and newly married when the U.S. stock market crashed in October 1929. Surviving the Depression instilled in them, and their generation, an ethos of fiscal cautions, (including a life-long aversion to charge accounts. They were, basically, “cash and carry” consumers.) Their discipline was (1) pay the bills first; (2) put food on the table; (3) save the majority of what remained; and (4) anything left after these was “discretionary.” Somehow, they managed all 4 points consistently. Today, after attending to points (1) and (2), we are apt to be “tapped out” – thanks in no small measure to the ubiquitous plastic “money.” Therefore, to echo a financial consultant whom I heard recently, we have to pay ourselves first. For many, this will seem both radical and unwise. It may disconcert women especially, because we are socialized to pay and put ourselves second or last. Yet, it needs to be done. When I preach the importance of cultivating the habit of saving to my classes, the younger students, (traditional college-aged as contrasted with the more mature students), can be counted on to report they have no money to save. At the same time, they do not hesitate to purchase sodas and snacks from the vending machines on the campuses. In a single day, $5.00 of their money can go into vending machines instead of their future.

Shift the paradigm (or pair of dollars!)

Most of the women in mid-life now were raised to accept and act on what author and philosopher Sam Keen calls “the script” prepared for them (by others.) This “script” was written by preceding generations for whom the longevity at which we are looking now was not a factor and who adhered to the assumptions inherent in patriarchies. The prevailing paradigm of their socialization is one identified by Gilligan, (In A Different Voice), and Belenky, et. al, (Women’s Ways of Knowing): to decide and act in terms of relationship and connection, to not “rock the boat”; to be, perhaps, the “silent woman”, or the intuitive knower. When contrasted with the Levinsonian model of the male socialized to be independent, (Levinson, et. al, The Seasons of a Man’s Life), and the social evolution which provides us with women planning their retirement/third half of life, some powerful differences emerge. What seems ordinary for a 30-something woman may be the end result of social evolution for a 60-something woman.

The old script dictated “you’re born, you’re wed, you bore children, you died.” Then, as now, the chances were compelling that your spouse – husband – would pre-decease you. The expectation, however, was that when he died your life was essentially over. [Assuming your life wasn’t “over” when you no longer bore children or the nest emptied.] The contemporary, astute mid-life woman is not only approaching her later decades with care as regards her finances but, also, her long-term well being. She is facing the strong likelihood that she is going to spend at least some of her later years in the company of (mostly) women, and just herself.

The implications are multiple. One outcome of these is the increasing number of mid-life women who are returning to school – college – to both enrich themselves on a personal level and, in many instances, prepare themselves for their next career, not “retirement.” Fifty percent of the schedule I teach is in classes scheduled to accommodate these returning, non-traditional students; 75% of the students I work with are mid-life women. It’s a joy to teach and learn with these students. These are women who are influencing as fully as possible what their next decades are going to look like. They and the 21st Century will be richer for it.

What, then, are some of the considerations we are looking at: Whether you expect to retire in the traditional sense or pursue a new career, new you, financial literacy and planning are essential. Understand that with increased longevity, putting life and meaning in your later years is more than a cliché. It has been said that age 50 today is what age 40 was 20 years ago. Review how you are taking care of yourself now knowing that it is preparation for your future decades. Reframe your approach so that you are pursuing a process, not an isolated “event.” As observed earlier, when you don’t know where you’re going, any road will do. Know how to read the “map” and choose your road.