Hala Taha: [00:00:00] 

Hala Taha: Young and profits, we are on the brink of a major wealth shift, one that's putting financial power in the hands of women over the coming decades. And no matter if you're a man or a woman, this is super important because you can create business ideas to cater with this women who have more wealth.

Hala Taha: Yet, despite the shift of women having more money, they're still less likely to invest than men and often feel less confident about doing so. My guest in this Yap classic episode is Jean Chasky. She believes the best way to build confidence is simple start investing. Jean is an award-winning journalist, bestselling author, and host of the podcast Her money.

Hala Taha: She also served as the longtime financial editor of The Today Show. Jean has a talent for making complex [00:01:00] financial topics easy to understand. And in this episode, she shared practical strategies for budgeting, saving, and investing. Alright, yap fam, let's get right into it. 

Hala Taha: Jean, welcome to Young and Profiting podcast. Thanks, holla. Thanks so much for having me. I'm so excited for this conversation. I think it's gonna be so insightful for my audience. I really love your work. You didn't really start off in finance, which I thought was interesting. I'd love to get some backstory from you.

Hala Taha: In terms of your journalism background. You were an English major. How did you end up first getting interested in finances? 

Jean Chatzky: I got interested quite honestly, because my own financial life was a bit of a mess, and simultaneously the journalism job that I got was business adjacent. I started my career. As an editorial assistant at a magazine that no [00:02:00] longer exists called Working Woman, and got to report some stories on things like business and careers and management trends and investing, and I was interested enough in them to.

Jean Chatzky: Try to get a job in personal finance business journalism. When I left that job, which turned out to be really, really difficult, 'cause all the big business magazines on the planet, I applied to all of them. Thought working woman was a joke. And finally I got a little bit of advice that what I needed was an MBA, but I didn't.

Jean Chatzky: Have really any interest in going back to school at that point. So instead, I got a job on Wall Street. I worked in equity research for a couple of years. I learned investing inside and out, and when I came back out I was able to reenter journalism, joined [00:03:00] Forbes from there to Smart Money. And from there I ended up on the Today Show for 25 years.

Hala Taha: Amazing. So when I looked at your career journey, it reminded me a lot of my own in terms. That you skill stacked to become an entrepreneur. So I call this skill stack entrepreneurship, where basically you worked for other people and you gained all these skills over the years, and then you became an entrepreneur basically putting these skills together, and then you came out with her money and nobody could do her money better than you because you had all the experiences to put together this unique offering to put together this awesome website, this awesome podcast.

Hala Taha: You had all the background and the skills, the, the writing, the journalism, the broadcasting, the knowledge of that actual topic. It's a lot like what I did with Yap Media and my podcast network and my social agency. So I'd love for you to just talk to us about that for all these young people listening.

Hala Taha: Talk about the skills that you acquired over the years, and then how you sort of use that in your entrepreneurship [00:04:00] journey. 

Jean Chatzky: I was one of the original side giggers, right? I think I had a side hustle before it was called a side hustle. Pretty much always because journalists make very little money, or at least when you're starting out as a journalist, you make very little money.

Jean Chatzky: So originally my side hustle was teaching SATs, but as I started to become a stronger writer and a stronger content creator, I was able to. Hustle in my own industry. So just by doing that, I picked up a lot of the adjacent skills that I then needed to launch this business. Once I was on the Today Show in particular, a lot of doors started to open.

Jean Chatzky: These were the days where everybody was watching the Today Show, and so I got a lot of offers to go out and speak to write books to consult. For different companies in [00:05:00] the employee benefits departments where they were trying to improve the financial health of their employees. And I didn't become an entrepreneur until a full scale entrepreneur until 20 years down the road when I.

Jean Chatzky: Left my last magazine job. I actually got fired from my last magazine job 'cause I'd gotten a little too expensive for their payroll. And I looked at all of the other things that I was doing. I was doing radio for Oprah over here and I was doing, speaking here, and I was on my 10th book over here and I had three other clients over here.

Jean Chatzky: And I thought, why am I getting another job? I have five other jobs. I just need to put 'em together. Her money as a company came along after her money as a podcast. I was doing some work with Fidelity Investments. They were our [00:06:00] original launch sponsor. The fabulous team there basically said, what else can we do together?

Jean Chatzky: And I was like, how about a podcast? So we launched and very quickly it became apparent to me that. We were growing a community of like-minded women who wanted to learn about money and her money. The company launched around that. 

Hala Taha: Amazing. Well, you've been doing such a great job. I know that your podcast is super popular.

Hala Taha: Your blog is very well known. I've heard about her money for many years now. You also have so many books and you've just become such an accomplished author. A majority of your content is actually geared towards women. So I wanna talk to that for a minute because I know that all the advice you give is applicable to all genders, right?

Hala Taha: Doesn't necessarily need to be just for women. We do need to understand why women have traditionally had an uphill battle when it has come to their finances. Can you give us some [00:07:00] insight in terms of the gender wage gap? And I think a lot of people have the assumption that that's not really a thing anymore.

Hala Taha: So can you talk to us about if it is a thing in 2024? 

Jean Chatzky: Oh, it's a thing. It has budged, which is good. Over the last like year and a half, it's moved up a smidge so that at this point women earn. 83 and a half cents to every dollar that a white man earns. But the American Association of University women say we are gonna be halfway through the next century before this gap actually closes.

Jean Chatzky: That's how slowly it's moving and it's worse for women of color. And the problem with the gender wage gap is that. When you combine it with all of the other factors that women deal with in terms of earning money and growing money for retirement, they [00:08:00] put us behind. Women are the ones to take breaks from work to care for kids, and care for older parents.

Jean Chatzky: We saw that in the pandemic in spades, but it's been true all along because we take those breaks. We have less money growing in those retirement accounts. We earn fewer social security credits. We get to the end of the line. We've got a smaller nest egg, and then we have to make the money last longer because we go and we outlive men by six, seven years.

Jean Chatzky: So it's an uphill battle. But you're right. In terms of the advice being gender neutral, there are not a ton of differences. In the advice that somebody would give to a man versus a woman. Jane Bryant Quinn, who is one of my mentors and a leading personal finance journalist, just a trailblazer, she likes to say that stocks aren't pink or blue.

Jean Chatzky: Money's not pink or blue, [00:09:00] it's green, right? And she's a hundred percent right about that. The problem is that women sometimes don't feel. As safe as we need to feel to ask the questions that we need answered in order to get us to take the steps to start investing, to put our money to work, to ask for that raise.

Jean Chatzky: And what I've found in the reason that I launched her money was that when I was in a room full of all women, given some sort of a talk, and I would get to the q and a section. The hands would just fly up in the air. And when I was in a mixed group, the response was a lot more muted. Women really held back and didn't wanna share as much.

Jean Chatzky: And so what I set out to create was a safe space. But am I gonna tell women that they should buy Nvidia as we did for our investing club [00:10:00] two years ago and tell men that they should not? No. Absolutely not. 

Hala Taha: Such good advice. And by the way, that stock has done really well. 'cause I have it too. Yeah. So a lot of my listeners are business owners.

Hala Taha: A lot of them are people of power. We have employees, we have our own small businesses. What is our responsibility when it comes to the gender wage gap? 

Jean Chatzky: I think our responsibility is to level it, and it has to come from the employers because if employers don't take a look at. Payrolls don't take a look at how we are treating our employees, irrespective of gender, irrespective of race, these gaps are never gonna close.

Jean Chatzky: And so we have to get really honest about who's doing what work and how much are they being compensated for it. And it's not a matter of need. It's a matter of the work that we [00:11:00] need them to do, but it's not a matter of our perception of the money that they need to take home, which is how it used to work.

Jean Chatzky: You know, years back you would hear conversations where a boss would tell a female employee, well, of course John is gonna get paid more than you do. He's the breadwinner and he's got multiple mouths to feed at home. We're now in an era where more women are the breadwinners, and if you look ahead, I. If you look out to 2030 and into the 2030s, women are actually expected to control the lion's share of the wealth and the spending in this country and across the world.

Jean Chatzky: And it's because of educational trends that are leading women to have more qualifications than men in many, many instances. And it's also because. Of the way that the transfer of [00:12:00] wealth, the $41 trillion transfer of wealth that is going on as we speak, is playing out. Women are inheriting twice and not because our parents prefer us to our brothers, but we're inheriting twice because if we have brothers, chances are we split the family pie with them.

Jean Chatzky: But then when our husbands die, we inherit that money as well. 

Hala Taha: So good, and this is really, really fascinating to me. I really wanna spend a lot of time here on these social and economical changes that are going on. So I got some incredible stats from your work, and I'm gonna rattle some off and ask some questions about them.

Hala Taha: I'd love for you to really just give us as much insight, as much color as you have about them. So the first one is for every a hundred men who graduated from college last year, 132 women graduated. Can you talk about how this really snowballs into various social [00:13:00] demographic economic changes? Absolutely.

Jean Chatzky: If you look at the types of jobs that college grads hold and the types of jobs that you need to have a college degree in order to get. They tend to be the higher paying jobs. We are seeing some movement in trades, in apprenticeships, in vocational programs. I grew up in Wheeling, West Virginia in a high school that had a, a big welding department in the basement.

Jean Chatzky: And I believe that we need to see more of these opportunities, but there's no question that a college degree helps you land a better salary. And when you look at the lifetime earnings of a person. With a college degree versus one who doesn't have one. It's hundreds of thousands of dollars, if not more.

Jean Chatzky: And the way that that then drives change in society [00:14:00] is that you have these families where you tend to have not just one, but two college educated people because college educated people often meet in college and those. Two income college educated households are gonna be making significantly more money in many cases than those who are not college educated.

Jean Chatzky: And what we wind up with is just a bigger income disparity in this country than we have right now. And as you know, Hala, it's already problematic. So we look at it and we see these things starting to march in that direction. The other problem though, and I hear of this from my daughter and from people younger than her, is that if you are on a college campus and you're heterosexual and you wanna date, it's gotten an awful lot harder.

Hala Taha: Mm. I [00:15:00] definitely wanna talk about that, but let's hold that thought for a second. Let's talk about how by 2028 women will control 75% of discretionary spending around the world. By 20 30, 60 6% of America's wealth will be with women. You alluded to this a bit, but what are some of the factors of why women are gonna have so much more money in the future years?

Hala Taha: So it's 

Jean Chatzky: education. And it is the transfer of wealth. Those are the two big factors that are playing into this. But when you talk about the fact that women are going to have the money, what people don't do is sort of follow the breadcrumbs and think about how that's going to change everything, right? When you follow the breadcrumbs, what you see is that the fact that women are making these purchasing decisions changes things.

Jean Chatzky: If you look at cars, it's gonna change the way that cars are designed because they're going to be designed with women [00:16:00] buyers more in mind. You'll have a better place to park that bag that you carry around on your shoulder all the time. The seat will be adjustable in a different way so that you'll be able to see over the front of the hood if you're height challenged in the way that I am.

Jean Chatzky: It'll change the design of homes. Single women buy many more homes than single men. They've become a very important segment of home buyers, and we are seeing homes designed with the things that women want in mind. So it's not just a matter of the fact that financial advisors are a little bit up in arms about this, because they have seen studies that show that.

Jean Chatzky: When the male spouse in a family dies, 70 ish percent of women are likely to leave the advisor and find somebody of their own. Choosing. Those trends are [00:17:00] underway as well, but it's gonna change the look and feel and design of a lot of products. 

Hala Taha: Oh my gosh, so interesting. You know what you just reminded me of?

Hala Taha: So I took my mom to Cancun on vacation. And I got us first class tickets. We only brought checked bags, and I remember me and her trying to put our bags up on the airplane we're both petite. We had to help each other. And actually my mom accidentally slipped and the bag fell and it was so embarrassing and it kind of caused a commotion.

Hala Taha: And in my head I was thinking I just paid over $2,000 for these tickets. I was expected as a five foot one girl to put up a bag with my 70-year-old mother by ourselves. And I was thinking, how ridiculous is this? Who are these airplanes designed for? It's obviously not considering petite women. 

Jean Chatzky: Yeah, it's definitely not.

Jean Chatzky: And maybe if they start to see that more women are buying their own [00:18:00] business class seats, that'll be something that will change. Or the folks who make the away bag that we all seem to carry will. Come up with some sort of a hoist to help us get it up in that luggage compartment. 'cause I have the same trouble that you do.

Hala Taha: It's the worst part about flying for me. It is. Okay. So 38% of women are their family's biggest earner or primary breadwinner. How does that impact society and contribute to the fact that 50% of women are single right now? 

Jean Chatzky: Look, there's a lot of research on when a woman is the primary breadwinner and whether or not.

Jean Chatzky: It causes strife in relationships generally. If when a man and a woman formed their relationship, the woman is already the higher earner, then that status quo doesn't rock the boat too much. It's when there's a shift in the dynamic over the course of the relationship that impacts the [00:19:00] balance of power in the relationship in other ways that things go a little bit sideways.

Jean Chatzky: That's where we start to see breakdown in communication. That's where we start to see women compensating for the fact that they make more money. I mean, I, I'm sure that you have seen this research hall. It's so troubling when women make more money, we don't see that they offload more of the responsibilities at home.

Jean Chatzky: We see that they take on more of their responsibilities at home. And the logic behind that is that we feel somehow bad about that and that we have to make nice to our spouse's ego. So of course we're gonna make dinner and do the grocery shopping and take care of the kids. And that's where burnout comes from, and that's where anger comes from.

Jean Chatzky: And in some cases, that's where divorce comes from. 

[00:20:00]  

Hala Taha: I wanna talk to you about the availability of suitable partners for successful women. You like kinda alluding to this when you were talking about your daughter, and I'm gonna get a little bit personal here. So I'm in my mid thirties and I've no kids. I'm, I'm married. I'm literally never single. I can get a boyfriend like this, but I haven't really found the one, and I kind of know the reason why.

Hala Taha: I feel like it's because a lot of guys that I date, they seem like they're cool with a successful woman and they're successful too. They're all executives or whatever they are, but I'm growing really fast and they end up getting insecure. Like, you're gonna outrow me, is what they think, right? You're gonna outgrow me.

Hala Taha: Mm-hmm. And so we end up breaking up and I haven't found the right partner. Now there's a couple things that have recently opened my eyes. Number one [00:21:00] is Marshall Goldsmith. I have a social media agency. He's one of my longtime LinkedIn clients. He's a leadership coach. He is always trying to get me married, and he's always telling me, Kala, this happened to my daughters.

Hala Taha: You have to marry down. You can't be worried about marrying up. You've gotta marry down. You'll find a great guy. He doesn't have to be richer than you, or like you've just gotta marry down. For a while I was trying to find somebody that was equal that I could grow with. But like the other thing that really opened my eyes is that I started this podcast network and I've got a lot of women who like, I feel like I'm gonna be like in a few years, like Jenna Kutcher, Amy Porterfield, Kelly Roach was my social client, and they all have either retired their husbands, they have house dads, basically, or their husband works with them or for them.

Hala Taha: And that made me realize, 'cause their families are so happy and I was like, well, maybe I'm just like looking at this in the wrong way. Maybe I should feel like almost not like a man, [00:22:00] but that I just need to find a great partner. They don't need to have the career that I want them to have. It's more about the person.

Hala Taha: Right. So I'd just love your thoughts on this. I am married for the second time 

Jean Chatzky: and I agree with that. First of all, I think, and. No disrespect to Marshall, but when he says you have to marry down, I think that that's the wrong word. I think that you have to marry and date different. Yeah. You need a partner who is going to be really supportive of your efforts and your career, because let's just be honest about this, and I felt the same way when I first had kids.

Jean Chatzky: My former father-in-law said, well, when are you stopping working? Because all of his other daughters and daughters-in-law had stopped working. And I said, yet, not me. I'm not doing that. We will figure out how these kids will have care during the [00:23:00] day. And the way that we did it was that my ex-husband didn't travel for work and I did.

Jean Chatzky: And that balanced us out for a very, very long time. If you are in a relationship where the egos are clashing or where your partner can't support your success or doesn't wanna support your success, then it's not gonna work. It's just gonna fail. Have you ever seen the movie Beautiful Girls? 

Hala Taha: No. 

Jean Chatzky: Okay. You have to watch the movie Beautiful Girls.

Jean Chatzky: It is old. 20 years probably Natalie Portman. And Annabeth Gish and Timothy Hutton and Matt Dylan, a whole bunch of people. But the part of that movie that sticks with me is there's a very successful woman in it. She's dating Timothy Hutton, and he is a piano player in a bar who also happens to be an [00:24:00] accountant, and he's been putting a whole lot of pressure on himself to.

Jean Chatzky: Get a real accounting job so that he can keep up with her. And finally, she just said, musicians are sexy. Accountants are not sexy. Musicians are sexy. Giving him the permission to continue to do this thing that he enjoyed, and continue to bring that sexy energy to their relationship, which is what she needed from him.

Jean Chatzky: And so that's the balance I think that you're looking for. There's a lot of lean in Sheryl Sandberg's book that people have dismissed over the past number of years. I think the thing that really holds up from that book is the importance that she put on selecting your partner. She picked a guy that she knew was going to let her be her and let her do the work that she wanted to do and help them create a life where that was gonna be [00:25:00] possible, and that's what you need.

Hala Taha: Yeah, more generally for everybody tuning in, I just feel like it's just harder to find traditional roles and partners anymore for men and for women. And I just would love to understand even more advice from you for the young people tuning in. How can men feel like men and women feel like women in their relationships when everything is sort of getting switched around in terms of who's the breadwinner?

Hala Taha: I just feel like it's so difficult for us to date. I 

Jean Chatzky: think the way that you do it is by knowing yourself and knowing your partner and closing ranks. This is your business and it's your partner's business, and it's not your mother's business or your mother-in-law's business or your friend's business or Instagram's business, right?

Jean Chatzky: It is nobody's business but yours. And if it's working for the two of you, then who the hell cares, right? What anybody else has to say. You just have to respect [00:26:00] the boundaries that you've created with the two of you and what that allows you to do. Look, I'm the breadwinner in my marriage. I have been for many years.

Jean Chatzky: My husband is largely retired. He works about 15 hours a week these days. He's older than I am and he had an incredibly successful career. But the fact that I out earn him. He could care less. He knows the value that he brings to our marriage. I certainly know the value that he brings to our marriage, and it's nobody else's business really, despite the fact that I'm talking about it on your podcast.

Hala Taha: I love it. Thanks Jean, for all of that. Okay, so women are getting richer. Can you talk to us about how women are gonna treat this newfound wealth compared to how men traditionally have treated wealth? 

Jean Chatzky: Men have traditionally invested it, and women [00:27:00] traditionally have been slow to the party. If you, again, and you, you pulled out a whole bunch of statistics.

Jean Chatzky: I'm grateful for that, but one of my favorites is that women keep about 70% of our assets in cash. Men keep about 60%. It's a really big and important difference because investing our money is the only way. That we are going to make sure that it is working as hard as we are working ourselves. And so what we're starting to see is women move into the ranks of being investors, wanting to be investors, wanting to learn about investors.

Jean Chatzky: Whether you've got all your money in a 401k where you put it in a target date fund and you let that fund do its thing, or you're buying individual stocks. We wanna learn. I was telling you about my investing club. I run this investing club with Karen Feinman, who is one of the [00:28:00] panelists on Fast Money on CNBC.

Jean Chatzky: She's a hedge fund manager. You would love her. She's so brilliant. And we are teaching 300 women. Growing how to invest every other Monday night on Zoom, and we pick stocks together and we talk about diversification and trends, and everybody can ask their questions. And investing is the kind of thing that is hard for women because there are no right or perfect answers.

Jean Chatzky: There's some parts of personal finance where if you ask me a question, I can give you an answer and I can be a hundred percent right. What is the best cashback credit card? I can look at 'em all. I can run the numbers. I can give you an answer. I can know that I'm correct. What's the best stock? Can't do it because no perfect answer exists.

Jean Chatzky: 'cause we have backward looking information and not forward-looking information, and so [00:29:00] we have to trust in the historical. Accuracy of what has come before that is difficult for a large portion of women who like to know the answer to any question before we even ask that question. We have to get comfortable and the way to get comfortable is by actually doing it.

Jean Chatzky: And one thing that has really, really helped when you look at Gen Z and millennials is that we are now being across the board. Automatically enrolled in these 401k and other retirement plans at work where we have them. The money's being automatically invested into a default, like a target date fund. So you're investing whether or not you are doing the work of investing yourself in many cases.

Jean Chatzky: And if you can allow yourself to sit with that and get comfortable with the fact that you're not only doing it, but you're doing it pretty well, that helps people. 

Hala Taha: I love that. [00:30:00] This was, to me such an interesting conversation. Honestly, I feel like this whole gender wage gap and transfer of wealth is really shifting everything.

Hala Taha: Let's move on to some more general advice, tactical financial advice. I wanna start with the concept of financial freedom, right? I feel like the concept of financial freedom has changed, especially for millennials, for Gen Z. How do you think we should go about thinking about financial freedom? Well, 

Jean Chatzky: I'm interested in knowing how you think it's 

Hala Taha: changed.

Hala Taha: What is it to you? Well, I feel like now it's more about enjoying life, doing what I want, right? It's really not about becoming a billionaire. It's what's the amount of money that I need where I can live comfortably, buy what I want, and enjoy life, work out, be healthy, sit in the sun, you know? That's what I think of.

Jean Chatzky: That's pretty much my definition too. It's just my definition I think extends for [00:31:00] a longer period of time because of my age, right? So I look at this and I think I want all of that, but I want to be able at some point to just work when I wanna work and know that those things will continue for as long as I live.

Jean Chatzky: So I think that's where the disparity in financial freedom comes in. I think. Younger generations define it in terms for today and older generations define it in terms that include a retirement that might last for three decades. 

Hala Taha: So one of the things that I think a lot of my listeners are probably going through right now, we've got a lot of 30 year olds, is buying or renting.

Hala Taha: And traditionally when we're talking about the American dream financial freedom, a lot of it is also like being a homeowner, right? I. Do you feel like it's important to be a homeowner? Do you feel like it's a good investment strategy, and what are some of the things we should think of renting versus buying?

Jean Chatzky: I feel like [00:32:00] being a homeowner is a helpful way to save money over the long term. If you think about buying versus renting month to month, right now, the costs are actually closer than they've ever been. But when you own. You are putting equity, you're building equity in this house, and that is a form of forced savings.

Jean Chatzky: And what happens if you get to the end of the road, if you pay down a mortgage for a long enough period of time, or even if you swap out of in and out of a couple of homes, but you've built up some equity, and then you build up some more, you end up with this cushion of cash and you can use that cushion to.

Jean Chatzky: Supplement your standard of living. You can use it to pay for long-term care. You can use it to keep a roof over your head. You can use it to [00:33:00] sell and move to Costa Rica. You have choices because you have this additional cushion, and if you've rented your whole life, unless you took the difference between the renting cost and the buying cost, which is a lot slimmer than it used to be, and you put that away every single month.

Jean Chatzky: You don't have that additional sum of money. So that's where being a homeowner I think is additive to your bottom line. There are other differences. We know in a whole bunch of different situations that autonomy is one of the things that make people happy. You're happier at your job if you feel like you've got enough autonomy to rearrange the furniture or to put your own stuff up on the walls, or to decide that you're gonna come in at nine 30 rather than nine o'clock.

Jean Chatzky: You're just happier. And you are happier where you live. If you feel like you have enough [00:34:00] autonomy to make the place what you want it to be, and you're more likely to have that if you own, rather than if you rent. There are a lot of cases where you shouldn't own, right? If you're not gonna be someplace for five years, I don't think you should buy.

Jean Chatzky: The cost of buying is just too steep. I don't think that mortgage rates at this level should stop people who wanna be in a place for six, seven years and more, you'll. Eventually, hopefully you get an opportunity to refi that loan, but there are cases where renting is just better. 

Hala Taha: You gave such good advice, like I'm in this predicament now, to your point, I see a lot of my friends who have been homeowners and I see them like really leveling up.

Hala Taha: 'cause every time they switch a house and they'll make like 200 grand. They just keep playing with that money and growing it and growing it. So I do see a lot of [00:35:00] my friends who have dabbled in home ownership do really well. That's inspiring to me. It's just that in New York it gets crazy. It's so crazy.

Hala Taha: So I feel like people who are in different cities also have a different experience. That's way easier to buy a house if you live in the suburbs, you know? 

Jean Chatzky: But you have more choice now than you used to have. I know young couples who are thinking. They live in New York where the price of home ownership is unsustainable.

Jean Chatzky: They're looking at Philadelphia, they're looking at Charlotte. They're looking at other places where, because they can work remotely, they could keep their jobs, they could make some friends, and they could be homeowners and have a standard of living that just is a little bit easier. 

Hala Taha: Okay, so something that you talk a lot about, and I was looking around your website and I saw that you were like, what is your money type?

Hala Taha: And you have this quiz that people can take for their money, type on her money.com. So talk to us about money types. [00:36:00] What is that? Why is it important to know? 

Jean Chatzky: It's important to know how you're wired and why you're wired the way you are. The money type is love languages, right? If you ever read the five Love languages, money type, is that just for money?

Jean Chatzky: So we worked with PhD who developed this in-depth tool that has been tested on men and women to help figure out why you are the way you are with money. I mean, you may know that it is. Hard for you to spend or easy for you to spend. You may know that you have trouble losing money or more or less trouble taking risk than other people.

Jean Chatzky: You may know that you would do anything for the members of your family, even if it meant putting yourself at financial risk. All of these things. Are tied up in our five [00:37:00] personality types and I would bet just knowing a little bit more about you and about your audience, that if people went to her money.com and they took our diagnostic, our questionnaire, money type quiz, you've got an audience that is full of what we call visionaries.

Jean Chatzky: A lot of entrepreneurs are visionaries and visionaries. Have to be careful when it comes to their own personal finances because it is really tempting to throw all of your money against the business and think that that business is gonna be your retirement plan. And we know the statistics on businesses that succeed versus fail, and you give up a lot of years trying to get that business off the ground and very quickly you can get yourself in trouble.

Jean Chatzky: The other thing, and that I like about money type so much is that we are not. All just one type. We've got a primary type and then we have a couple of secondary types that [00:38:00] make up our personality. And if you know your money type and your partner's money type, it's helpful in the navigating the relationship and the conversations that the two of you have about money.

Jean Chatzky: I was recently on a different podcast and the hosts had taken the money type questionnaire and they said, I feel so seen because there's something about this diagnostic. It just gets people, I felt this way the first time I took it. And I'm a producer. That's my primary money type with a little bit of connoisseur, which means I like to spend in as well.

Jean Chatzky: And it's really true and it's really. Interesting that a test can get you so well, 

Hala Taha: it's so true and I'm happy that you brought up relationships 'cause I actually recently ended a relationship and one of my primary reasons was our views on money were so different. He's [00:39:00] richer than I am. And was so cheap and I was just like, I can't do this.

Hala Taha: I like to live a life of luxury. I like to spend my money. Not that I'm frivolous, but it's just like, what's the point of choosing such a hard job if you're not? And like, right, if no one's spending their money, why are we working so hard? 

Jean Chatzky: Yeah, and it's good that you figured this out before you got engaged to the guy or worse married the guy.

Jean Chatzky: Right. In my house we say, this is why we work. And we say it for exactly the reasons that you just described. We work hard and we work hard, so that. If we wanna get on a plane and fly across the country, we don't have to think about it. This is the payoff of working so hard and producing, and I acknowledge we are definitely privileged.

Jean Chatzky: I'm fortunate to have a career that I love, which makes working hard, feel like not working as hard, but this is [00:40:00] why we work. If they didn't pay us, we wouldn't work so hard. 

Hala Taha: This has been such an awesome conversation. Okay, a couple more questions. Let's talk about budgeting. There's so much inflation going on. Everything is just way more expensive. There's a lot of keeping up with the Joneses, with social media, a lot of comparison, feeling like you need to keep buying and.

Hala Taha: For instance, with me, I feel like I always gotta buy so much clothes because I'm always photographed in my outfits and then suddenly I don't wanna wear the same thing again. And so talk to us about how we can avoid overspending. 

Jean Chatzky: Well, first of all, are you not on the RealReal? You should just be turning over your closet all the, I mean, this is what I do.

Jean Chatzky: 'cause I'm the same. I do a lot of appearances. And I don't wanna be wearing the same thing all the time. [00:41:00] And I wear it a couple of times and I send it to the RealReal and I buy something else on the RealReal and I run a credit, and it makes me feel like I'm shopping for free, even though it's not quite shopping for free, and that I'm doing something a little bit better for the environment.

Jean Chatzky: And so that's my shopping suggestion. But when it comes to overspending in general. I think that the secret is that most people have absolutely no idea where their money is actually going. So when we teach budgeting and we have a program called Finance Fix where we teach budgeting and how to do this in a way that you can actually save something, we put people through this process of figuring out where their money is going.

Jean Chatzky: We use technology to do it so you don't have to do it by hand. Once you see where you've been using your money, then you have the tools and the ammunition to make changes about where you consciously [00:42:00] want to use your money. And so it's not, don't buy the coffee, right? Everybody's least favorite example, it's.

Jean Chatzky: If the coffee is the thing that lights up your day, then by all means buy the coffee. But if you could care less and really what you want is a little bit of caffeine to help you get out the door, then make it at home and have a sip and go about your day and spend your money on something that you actually value.

Hala Taha: I know where all my money's going. It's Sephora and revolve. All my money's just going straight there. Okay, let's talk about. Paying down debt. A lot of people have student loans, a lot of people have debts. You've got this avalanche method. Talk to us about the best strategies for paying down debt, in your opinion.

Jean Chatzky: The cheapest way. The cheapest fastest way to pay off debt is to just stack it. Highest interest rate to lowest interest [00:43:00] rate. Pay off the highest interest rate debts first, while making the minimum payments on the rest once that high interest rate debt is gone. Then you just move on to the next one, and so on and so on and so on.

Jean Chatzky: The student loan debts are a little bit of a different beast. Long-term debts, student loans, mortgages, car loans. You basically wanna try to pay those off on the schedule that you're given. If you're struggling with your student loan debts and federal debts, then you wanna make sure you're enrolled in an income repayment program through the Department of Education.

Jean Chatzky: We're getting some changes to those programs that are helpful. As long as you're enrolled, you should get notified of the changes and they should come your way. But don't let paying student loan debt faster. Get in the way of doing important things like grabbing the match from your 401k. 'cause if you look at the [00:44:00] return on your money.

Jean Chatzky: The way that we think about, or the way that we should think about return on your money is equivalent to the interest rate. So if you're paying off a student loan debt at 6%, that's like getting a 6% return on your money. If you are getting 50 cents on the dollar as a match in your 401k. That's a 50% return on your money and you can't not get that.

Jean Chatzky: 'cause you wanna pay off the debt at 6%. You just pay off the debt at 6%. A little bit slower. 

Hala Taha: Let's talk about improving your credit. So I actually recently messed up my credit because, oh no. I was putting all, yeah, it was really dumb. I was spending everything on my business credit cards, and I just thought it was good that I wasn't spending on my own credit cards.

Hala Taha: And like I was like shutting down my personal credit cards and then I realized, oops, I wasn't supposed to do that. You need to actually have credit cards. And I always [00:45:00] used to, 'cause I have a lot of cash, I would just pay it off, pay it off to zero balance. And you're actually not supposed to do that. Oh no.

Hala Taha: You are supposed to do that. You are supposed to do that. Tell me about it. 'cause I feel confused about what should we actually be doing with our personal credit. 

Jean Chatzky: You should be using your personal credit cards and you should be paying them off every month just to zero. Pay 'em off to zero. Interest rates are way too high.

Jean Chatzky: The average credit card interest rate, I just looked this up yesterday, is 28%. It's insane. It's insane. You don't wanna be paying interest on a credit card. So the way to do this is to understand that there are a couple of factors that go into your credit score and you need to simultaneously manage all of them.

Jean Chatzky: Number one, you gotta pay your bills on time. If you pay late, especially if you pay late more than once, that's really gonna hurt your score. The second, and this is where you got in trouble, is [00:46:00] credit utilization. That's the percentage of credit that you have available to you that you're actually using.

Jean Chatzky: We wanna keep that number below 30% at all times. So if you have a heavy spending month, sometimes when I go on vacation, I have a heavy spending month and I spend more than 30% of my credit limit on a card. If you do that, the thing to do is just pay the bill now, pay it twice a month rather than once a month to bring the utilization down.

Jean Chatzky: The problem that you got into by closing those credit cards is that you shrunk the pool of available credit that you had and that hurt your score. The other thing that you did, another factor, it's not as big as the first two, but it's something called length of credit or credit history. The longer your credit relationships, the more beneficial it is to your score.

Jean Chatzky: When you close those [00:47:00] cards, if they were the cards that you had had the longest, you heard that factor too. So that's how you do it. 

Hala Taha: And actually I did have a credit card that was with me for like so long and then the credit card company ended the card and I was like, oh man, I'm really screwed. They ended it.

Hala Taha: 'cause you weren't using it, right? No, no. Like that type of card retired because I had it for so long and then suddenly I was like, oh my god, I have no credit cards. And I didn't even realize I'm fixing it though. It will, it will give. It's not that terrible, but I'm fixing it. Cool. So. Let's talk about investing in general.

Hala Taha: I'm just gonna give you a general question. I actually asked Susie Orman this question when she came on the show. If you had a hundred thousand dollars to invest, you already had your emergency fund, you already had savings, all that. You just had a hundred thousand dollars cash, where would you put it?

Jean Chatzky: What I'm doing with that kind of money right now is splitting it up and buying the stocks that [00:48:00] we've been picking for our investing club. I have a diversified portfolio that is set up to get me to the retirement that I want to get to. I am on track. I have met my savings goals, so if this is quite literally free money, I'm gonna put it into the picks that we are picking for our investing club.

Jean Chatzky: And so recently we've been looking at, at stocks like Lululemon, we've got JP Morgan Chase, we've got, oh. A bunch of stocks in the portfolio, but we add one about every month and uh, sometimes we sell one. And I would do that. 

Hala Taha: That's so cool. So this investment club is basically, you guys like all talk about stocks and give guidance to each other.

Hala Taha: How does one join your investment club? So you can go to her 

Jean Chatzky: money.com. It's called Investing Fix. If anybody wants to try it out, you can do it free for a month. But the way it works is that. Every [00:49:00] month we present four different investing options. We look at them on four different dimensions. How do they make their money?

Jean Chatzky: What do we like about 'em? What don't we like about 'em? And would we buy them at the current price? And then the club votes on what we add to the portfolio and what we take away from the portfolio. It's a democracy. Democracy rules, and. It's been a lot of fun. Some of the women in our club have stepped up and presented stocks that they're interested in, and some of those have been purchased for the club.

Jean Chatzky: One of our members suggested United Rentals and we bought that. It's been a huge win. So we're all learning from each other, which is just so amazing. 

Hala Taha: That's so cool. So it's actually like you guys are pooling your money together and investing together. 

Jean Chatzky: We're not, we run a group portfolio that the club itself runs and is invested by the [00:50:00] votes that the club decides.

Jean Chatzky: But a lot of members like me are buying the picks for 

Hala Taha: our own portfolios. I love it. Well, Jean, this was such an awesome conversation. I and my show with two questions that I ask all my guests. Then at the end of the year, we typically do something fun with it. So the first one is, what is one actionable thing our young and profits can do today to become more profitable tomorrow?

Hala Taha: Start tracking your spending, figuring out where that money is going. For real? 

Jean Chatzky: Yeah. If you don't know where it's going, then you have no control over what it's doing for you, whether it's a business expense or a personal expense. And I know it's tedious, and I know it's boring, but sometimes boring is 

Hala Taha: better.

Hala Taha: What is your secret to profiting in life? And this can go beyond financial advice. 

Jean Chatzky: My secret to profiting, and I gotta tell you, I lost my mom recently, and my lifelong [00:51:00] friends came out of the woodwork and haven't left me alone in a good way, in the best way. And my secret is to invest as much energy as absolutely possible in those friends.

Hala Taha: That's so beautiful. That's so true. Sometimes you forget about relationships and nothing in the world is more important, I think, than relationships. A hundred percent. Jean, where can everybody learn more about you and her money? 

Jean Chatzky: So I'm on social pretty much everywhere at Jean Chatzky and you can find [email protected].

Hala Taha: Amazing. Well, thank you so much for joining us on Young and Profiting Podcast. Thanks for having me. 

Hala Taha: