Yahoo Finance How to Be a 'Money Queen'
After working in the financial industry for 25 years, Cary Carbonaro was tired of seeing her girlfriends make the same money mistakes over and over again. "One of my dear friends is terrible with money... Now she's in her 40s, and not having financial literacy has hurt her." So Carbonaro, a financial planner, decided to write a book, "The Money Queen's Guide: For Women Who Want to Build Wealth and Banish Fear," that will be released this month.
One of the biggest problems for women, Carbonaro says, is that they don't talk about money with each other. "We talk about going out, shopping, sex, makeup, but nobody ever talks about what they have in their 401(k) or how much they're saving," she says.
One reason for the lack of chit-chat on the subject is likely the potential for awkwardness, something Carbonaro admits she feels herself sometimes. "For a long time, I didn't want to talk about [money] with [my friends]. I felt bad to let them know I had made a lot of money. I never wanted them to look at me like I thought I was better because I made more money," she says.
For women who want to get on the fast-track to wealth, Carbonaro shares the following lessons, which you can start applying to your financial life today:
1. Pay off those credit cards.
"Credit cards are not free money," Carbonaro warns. "Use them as you would cash or not at all." She says she's seen friends misuse credit cards by building up debt that then becomes difficult or almost impossible to pay off. She says it's also important to build up your credit history by having a card in your own name; you can also take out a secured loan if you're just starting out.
2. Know your net worth.
If you're going to manage your money, you first have to know how much you have, Carbonaro says. List your assets, subtract liabilities and figure out those numbers. "It doesn't equal your self-worth so don't be afraid," she says. Focusing on the numbers can also help take some of the emotion away from spending and saving choices, she adds. It also helps you figure out your goals, including how much you want to have saved before retirement or how much to put in your emergency fund.
3. Become financially literate.
Learning the basics of budgeting, investing and saving are essential to making smart money choices, she says, adding that if your parents didn't teach you those lessons, then you'll have to teach yourself. "Learn it and share it -- I feel really strongly about that," she says.
4. Talk about money with your partner.
"Full financial disclosure is key to a healthy relationship," Carbonaro says, and she shares some of her own money and relationship challenges in her book. She says you should never lie about spending to your partner and warns that financial disagreements are a leading cause of divorce. If you currently keep your finances separate from your partner, then she suggests sitting down and writing down all expenses, assets and liabilities together to get on the same page.
5. Soothe your fear of becoming poverty-stricken.
In the book, Carbonaro uses the term "designer bag lady" to describe women who appear to be successful but inside harbor a fear of becoming insolvent. "I'm one of them," she says. Even though she was earning half a million dollars a year by the time she was 30, in her mind, she always feared she would lose it all. "When I married the wrong man and that almost came to fruition, it was like my greatest fears coming true," she says.
Many women, she says, lose sleep over this worry. To ease those fears, she suggests seeking the professional help of a financial advisor. "They can guide you and let you know that you're OK," she says, so you won't let your fears lead your investment choices. Coaches and therapists can also help.
"That's what I feel my role is -- to be a financial advocate for clients," she says. "I want to make them feel comfortable."
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