Women carry an enormous financial burden during the pandemic, mainly because they leave the workforce by choice or by force.
The Associated Press spoke to Suze Orman, personal finance expert and author of the Women & Money podcast, about how women can survive and emerge from this time.
Answers have been edited for length and clarity.
Q: Many financial advisors focus on savings and investments. But what advice do you have for people who are struggling to get through?
A: You need to first list everything you are spending money on and determine what must be. When shopping for clothes or ordering something from Amazon, this is not a must. Gasoline for a car, food in a grocery store, these are must-have items. List them by priority – shelter and food come first.
Then, check out the must-spends and see what to put on. Federal student loan payments will be suspended until the end of September. Mortgages That You Can Suspend. When you’re in trouble, don’t pay bills that you don’t have to pay when you can put them on hold.
It’s important to take a really realistic look at your life so that you don’t keep kicking the can. If you owe your landlord eight months of rent back and can’t pay it, now you need to make a plan for the day that happens.
I would pretend tomorrow everything is back to where I owe student loan payments and I owe this and that and start scaling down and finding out now.
Q: In some cases during the pandemic, people made good financial decisions – save more, withdraw credit cards, spend less. Do you think it will stay and are there any lessons that you hope people will take away?
A: Although I would like to believe that these habits will persist, I don’t. The easiest thing in life is to forget and the hardest thing is to remember.
I thought 2008 would teach people how to have an emergency fund, not go into debt, and stop buying bigger houses and new cars all the time. I was sure that would happen. But when the stock market started going up and down and they saw their 401 (k) and statements expand, they suddenly felt rich again and felt like they could do anything. You could eat out and get bigger houses.
Even if your credit card debt is down … give it 10 years and that will be all. A whole new group will be in their place (re-issue).
I hope i’m wrong
Q: Just one year of unemployment can lead to a sharp drop in women’s earnings. What can those returning to the workforce do to make up for this period?
A: It’s not just women, but how will people make up for this lost year.
You have to see this as an opportunity. Chances are, you’ve learned that you need an emergency or savings account. Or that you keep your car for about 10 years instead of getting a new one every few years.
You make up for it by spending less than you normally would. You also make up for it by being active with your money. You make up for it by understanding that you are now paying taxes and choosing Roth retirement accounts. You make up for it by not buying certain investments. And by making sure you own a home, you are making sure it will pay off by the time you retire.
You need to have a hard core stance between what you can and can’t in order for you to be fine. You can’t save the whole world until you save yourself. We have to learn that. That loss could lead to the greatest gains of your life.
Q: Why do you think women need gender financial advice?
A: Women are givers … it’s their natural tendency to give, to give, to give.
I’ve done every talk show and met almost every celebrity out there. I can’t tell you which famous women out there are so rich – Oprah excluded – who don’t know anything about money.
But women are ready to admit when they don’t know the answers. I have yet to interview a man or review his finances who doesn’t have answers to every question I have for him. But they are the wrong answers. Men are financial counterfeiters.
Q: Some women say they need to learn more about money and investing. What do you tell them
A: Let’s get really real. Women say they have to. It’s not about having to do it. It’s about wanting to do it. If they wanted to – are you kidding me? You could see CNBC, you could read barrons, and there are tons of financial books. Read my Women & Money book and listen to my podcast. It’s an excuse. It’s like saying I need to lose weight, okay then do it.
Only when you want to do it will you do it. There is no shortage of resources out there. In this day and age, you have a million ways to invest.
Don’t tell Suze Orman that you don’t know where to go to do this. You are just fooling yourself and you are the one who is losing.
Question: The pandemic is expected to take women years back in terms of economic security and representation in the workforce. Do you think they can recover from this as a group?
A. Definitely. I absolutely do. I think it could be another tough year. I don’t think it will be until March 2022 before we feel normal. But I think women have the ability to constantly recreate themselves.
If you have what it takes to recover from a divorce – and most women do – or the death of a spouse, you can recover from a year or two setback from a pandemic that hit the world.
Emotionally you are not alone, it is a worldwide phenomenon. You have emotional support. So you absolutely have what it takes to recover.
I believe that if you learn the lesson this taught you, you will come out much richer, much stronger, and more confident.