Q & A with Jean Chatzky
NBC financial guru to speak in Monroe
By Judie Jacobson
For several years, financial guru Jean Chatzky has shared her smart money tips with viewers of NBC’s Today Show. The award-winning journalist and best-selling author will speak on Monday, May 3, at the 42nd Annual Spring Luncheon and Boutique of the Women’s Auxiliary of the Jewish Home for the Elderly in Fairfield to be held at The Waterview in Monroe.
Besides serving as financial editor for the Today Show, Chatzky is a contributing editor for More Magazine, a columnist for The New York Daily New and blogs daily at JeanChatzky.com.
She is author of seven books, including her newest “Money 911: Your Most Pressing Money Questions Answered, Your Money Emergencies Solved,” a New York Times best seller. She is also the author of “The Difference: How Anyone Can Prosper in Even the Toughest Times” (Crown Business) and best sellers “Pay It Down: From Debt to Wealth on $10 A Day” (New York Times and Business Week best seller) and “Make Money, Not Excuses” (Wall Street Journal and New York Times best seller).
The recipient of many awards, in 2010, she was honored with the Books for a Better Life award for her book “The Difference,” and in 2009, she received the Betty Furness Consumer Media Service Award from the Consumer Federation of America. .
Chatzky, who lives with her family in Westchester, N.Y. recently shared some of her financial tips with the Jewish Ledger.
Q: Are things getting better financially?
A: Yes, things are getting better. People always feel better when the market is doing better and the market has had a real run. What we are not seeing yet are the jobs, and that tends to be very regional, but on a national level we aren’t seeing the jobs. And I think that you can read as many headlines about recovery as you want, if you are out of a job, if your family is living on one income when you are used to living on two, things aren’t feeling better in your household and they won’t start to feel better until that comes back.
Q: What financial concerns do you hear most from people?
A: I think the biggest concern is retirement. Half of people haven’t bothered to figure out how much money they need for retirement so that doesn’t give them a very good sense of how much they actually need to put away in order to meet their retirement goals because they don’t have goals set. We are very, very aware that we are responsible now for our own retirements; that the government is not – aside from Social Security – going to be there to help us, that we don’t have the sort of pensions that our parents and our grandparents had. So, we are feeling like we are behind in many, many cases.
College is another big fear. If you’ve got kids, then chances are you want to, at least, help put them through college and the inflation that we’ve seen in college tuition has been out of control – three times the rate of inflation going back a decade. It is no wonder college tuition has become unaffordable for an awful lot of people. And yet it’s a real necessity if you want to be able to make a decent living at pace with the rest of your peer group going forward.
Overall, our finances are the thing that worry us more than any other aspect of our lives – they worry us more than our jobs, our health, our kids, our friends and our spouses. So if we could get ourselves into a position where we were in greater control of our financial lives we would be a lot more able to sleep at night.
Q: In terms of retirement, is there a basic formula for people who want to know how much they’ll need when they retire?
A: There is no rule of thumb. What I’d like people to do is actually run some numbers – get an estimate of what your benefits are likely to be from the Social Security Administra-
tion, which you can do at www. socialsecurityfsa.gov. Figure out what you already have saved and how much longer you plan on working and then go to a website like www. choosetosave.org and run the retirement calculator and you’ll get a real number.
I could say, you need $1 million, you need a half a million, but I would be making it up because I don’t know if you have a mortgage, I don’t know if you are planning to work part-time in retirement, I don’t know if you are planning to travel like crazy or to stay home. But you do know. So, if you can get yourself to actually take the half hour – really that’s all it takes to run these numbers – then you will be much better off.
Q: Is there a common financial mistake people are making right now?
A: Yes, they are not saving enough.
Q: But that can be hard to do in times like these.
A: That is absolutely true, it is hard to do when you feel as if you don’t have enough, and in many cases people right now don’t have enough to be saving as much as they should. But if we can get into the habit of saving something it is a good overall habit.
Q: Is there something in particular that they should be doing with their money if they can manage to save some?
A: Sure, we look at this hierachically. The first thing you do is fund an emergency cushion so that if you have some sort of a small emergency you don’t have to float it on a credit card and pay it off over time at 19 percent. Then, you want to make sure you are putting money away in a tax-advantaged way, so your 401K at work, particularly if there are matching dollars available to you is the first place you go, because that is free money. You look at IRAs, you look at Roth IRAs, you look at SEP plans or Keoghs, if you are self-employed. And you put money away so that it can grow tax-deferred until retirement. Beyond that, if you can do more, that is when you look at the college savings accounts, the health savings accounts, just investing some discretionary dollars.
Q: How can we teach kids early on about managing their finances?
A: In terms of teaching kids, we put some money into their hands – when they are young maybe it is in the form of an allowance – and we force them to manage it by telling them ‘alright, now since you have this allowance, there are things I am no longer going to buy for you. I was in the business of paying for your manicures and when you went to the movies with your friends, but now you get $15 a week and you have to pay for it yourself. And if you go to the mall and then you want to go to the movies you better keep that in mind.’ And you let them blow it, because when they blow it and you don’t bail them out, that is when they learn.
For more information on Jean Chatzky’s appearance at the Women’s Auxiliary Spring Luncheon and Boutique of the Jewish Home for the Elderly in Fairfield to be held on Monday, May 3 at The Waterview in Monroe, call (203) 365-6409.