Too single to fail. With Catherine New

Meet Catherine New. Catherine has made a career out of helping women with finance. As a Finance and Money writer for the Huffington Post, she is well versed on the topic and recently wrote a heartfelt article on how a divorce saved my finances?

So we get the feeling she knows a thing or two about the financial challenges that women face. Despite all the remarkable social advances women have made in the last four decades, some of us  continue to remain in the dark when it comes to managing our finances. We sat down with Catherine to discuss the topic on a personal level.

JM: Catherine, why do you feel so passionate about helping women with money?

CN: After I went through my divorce, I realised one of my biggest financial vulnerabilities was that at some unconscious level I assumed or hoped someone or something else was going to be the answer to my financial life. But through the split I came to the understanding that the only person who could save my financial life was me. I had to take control of my own money and that process has been hugely empowering. I think that process goes for both men and women.

JM: How did you get into this arena? What was your exposure to finances growing up? Did you grow up in a family that empowered you in money matters or did you have to learn about it?

CN: My parents were divorced when I was very young, and I grew up for the most part with my mother. My mom worked when I was growing up so I have always viewed money as compensation for doing well at a job. In other words, it is the result of hard work. Another lesson I learned from her: She gave me $500 to open a Roth IRA for my college graduation, and that really planted the seed that I needed to have a long view of saving. Of course, what it really took for me to learn about money was getting into trouble with credit cards and then getting out of debt through hard work and budgeting. That’s where my real a-ha moment with money happened.

JM: What is the biggest lesson you have learned about money management.

CN: The biggest lesson I have learned is that money is a fact, not a feeling. We have a lot of emotions around money. For example, not having enough can make us anxious or having more than enough can really impact our sense of self worth. Even though we tend to think about our money through a certain emotional lense at the end of the day net worth is just a number. Taking the emotions out of money and just sticking the facts is an important first step in managing it.

JM: What is the most common mistake that you see women (or anyone) make about money?

CN: I believe the biggest mistake people make is staying in denial about money issues. If you have several credit cards it can be easy to be vague about the total amount you really owe and let debt continue to grow. Or maybe you’re thinking that you’ll start saving more for retirement next year, or that it doesn’t matter that you never bothered to see what kinds of fees you’re paying for your investments. But if you don’t get honest about what is happening with your finances you don’t even have a chance to improve them.

JM: What are the three easiest things anyone can do to get ahead financially?

CN: The best advice I heard this year came from an unlikely source — the rapper Slim Thug wrote a personal finance book and his advice was “Don’t live a Bentley lifestyle on a Benz income.” In other words, live a lifestyle you can actually afford. If you can afford designer shoes and clothes by all means buy them. But if those shoes are going to cause you stress and debt, it’s not worth it. Getting real about your income and expenses is the first step to getting ahead. Secondly, become a passive saver and set up automatic deposits into your retirement accounts straight from your paycheck. Don’t even let that money into your checking account where you might spend it. If your workplace offers a matching sum for retirement, take the maximum amount as that is essentially free money. Lastly, don’t be afraid to ask questions or speak up about money. It’s your money and you have a right to know where it’s going, what the fees mean, to learn what the price is, and so on. Asking a question or picking up the phone can often mean a big difference in a financial transaction that will save or earn you money. For me these three steps have changed my relationship with money and [have helped/allowe me to] get engaged with my own financial future.

JM: What are the three fastest things you can do to get out of debt?

CN: Stop getting into more debt. It’s like dieting: You’re never going to lose those ten pounds if you keep eating an extra bag of chips every day. The first step is to stop the problem from getting worse. Secondly, take a real inventory of what debts you owe and write everything down on one sheet of paper. Third, make a pay-down plan: Decide what debts you want to tackle first and stick to the plan, no matter what. There is some research that shows paying down your smallest debts first, aka the snowball approach, works because you gain confidence after you are able to eliminate one whole debt before moving on to the next one.

JM: Why do you think women lack confidence in the financial arena when statistics show that they often make most of the financial decisions in relationship or in running a home.

CN: I am not sure why there is a perception that women lack confidence. Women are starting to outpace men as breadwinners in the United States and there’s been a big push from big investment firms and smaller financial services to attract more women as clients. However, I think an area where women generally might have more confidence is learning how to ask for more money, in a salary negotiation for example, or pricing their work.

JM: Areas like buying shares, trading, property and DIY Super (retirement funds) are complicated. How does the average person learn about these things?

CN: Reading is a good way to get basic knowledge, but the only way to do it is to jump in and start doing it! Many financial decisions are associated with risk and there is only one way to find out your own tolerance for risk: real life practice. Last year I wanted to start investing and I was intrigued with a platform called Betterment. It’s an investing website, where you can set a goal and it tells you how much you need to invest every month to meet your goal, based on the allocation of stocks and bonds you have selected. There is no active trading involved, but I have been putting money in for the last six months and it’s been enlightening to watch my own reaction to the markets when I see my money go up or down.

JM: Are you a spender or a saver?

CN: I feel like I have a balanced approach to spending and saving. I set up my savings accounts with automatic deposits so I know I am saving money every month even when I don’t think about it. I make adjustments on a weekly basis depending on what comes up. I am not afraid to spend some money on a restaurant dinner with a friend, for example, but I’ll cut back elsewhere.

JM: What is your idea of financial freedom?

CN: For me, financial freedom is a state of mind and has to do with a sense of abundance inside and out, rather than a dollar amount. Of course, that sense of abundance also comes from knowing I have made smart choices that are getting me closer to long-term financial security…not further away from it.

JM: What do you enjoy spending money on?

CN: My big spending splurge is travel! In October I am venturing to the Himalayas for a two-week trek in Northern India. It’s been a lifelong dream of mine!

View the full The Huffington Post article here.