The Money Therapist Interview

This month we were able to chat to Marcia Brixey from the USA. She is otherwise known as the Money Therapist and has written a book relating to home budgeting and women. As she notes, she has spent at least the last 10 years helping women get their money house in order.

She has written the book The Money Therapist. To learn more about her please go to her website www.marciabrixey.com

Maybe for our readers you can tell us a little bit about yourself and how you got interested in home budgeting?
Well, I worked with social security in America for 26 years. But I was in charge of women's issues so I went to a lot of financial conferences for women. And what I discovered in these conferences was women were really not ready to tackle their finances until they had the basics down. And what I'm talking about is developing a spending plan, understanding credit card debt and knowing where to start.

So nine years ago, I took early retirement and founded Moneywise Women, a non-profit organisation. We host conferences, tele-seminars and we have a blog. It helps women really get hands on with their spending and plans for the future.

During this time, I decided to write a book (The Money Therapist). The book is a really passionate account on how women can live and be better off financially. It really gives real life examples of how women have come back from the brink of going broke to being financially free.

So maybe you could tell us a bit about the differences between men and women with money over a lifetime?
I'm not sure if this is the same in Australia, but in the United States the assumption is made that the man will take care of the money. And a lot of times the women will allow them to do this and will not get involved in it.

But then something happens which forces women to get involved, for example:
They get divorced
An Illness strikes
Their husband dies

There are a lot of statistics out which show that women are caregivers. We seem to care for everyone but ourselves. We put our families, children, and our parents in front of our needs. And yes, this is true when it comes to finance and spending issues.

Statistics show that approximately 50% of all marriages end in divorce. Our average age of widow-ship is 56. We outlive men by seven to ten years. There are many scary statistics to this effect and this is why I really targeted women. So women have to really educate themselves, because the statistics alone predict they will be in a sticky situation at some point in their lives.

In 2008, the Global Financial Crisis hit. Did you notice a change in people's behaviour when it came to money?
Wow 2008, has it been that many years!

It's funny, once everything went topsy-turvy with the financial system; the one thing I noticed was it started getting easier to talk about money. Prior to that, I think it was a pretty taboo subject. But now people are more likely to talk about it and ask questions of their friends and family.

But people even in 2011 are scared in general. Because they still don't know what is going to happen tomorrow. I don't know what is going on in Australia, but here in the United States, people are really scared. They wonder if they are going to have a job, or be able to make their home loan repayments. Not to say everyone is like this, but quite a few of the people are.

If a woman came to you drowning in debt, what would be your first bit of advice to her?
Stop using your credit cards. This can be a really hard thing to do because if you don't have money in savings, the first time your car breaks down, or your fridge packs it in, it's so easy to grab the credit card to make the short-term payments.

One of the suggestions I have is if you have a safe deposit box lock your cards up. If you don't have a safe deposit box, put your cards in a tin can, fill it with water, and freeze it.

So what is your opinion on credit cards in other times? Would you suggest people chop up their credit cards even if they are in good financial health?
No, not at all. If you are a person who has no debt, and you pay your credit cards off every single month, I highly recommend that you have a credit card with some kind of reward plan. Whether that be a frequent flyer reward plan or a shopping card reward plan, you should reward yourself and use the bank's money. Let's face it, they use our money enough.

For example, my husband and I have an Alaska Airlines Visa Card and we simply charge everything on there. We charge our pay TV, our cell phone bill, our insurance and everything else we can do. Then once a year we fly to Hawaii for free.

If you can pay your debt off, I highly recommend you do this. However, if you have a problem with debt and find it hard to do, this is a whole different ball game.

We have a lot of Baby Boomers in Australia who have saved very little for retirement and it is fast coming up. I assume it would be the same in the USA. What is your opinion on this?

Well, if you haven't saved or invested and you're getting close to retirement age, you just may not be able to retire. This is the sad fact.

In the USA, the social security system will only be a small part of your retirement. By no means will it support you.

There is a big misconception that in the USA we will be taken care of. But it's just not true, and working with social security for 20 odd years I can say that as a fact; at least here in the United States.

If I was in my 20s and someone told me to invest for my retirement, I would have said "get real." I would have said that I have years to go and it makes no sense. But I tell people to start saving now for their financial independence. But don't put an age on it. You have the power to determine what age you would like to retire at. Maybe it's 55, 45, or even 65. You invest now, so at some point in your life you will be able to go into the next chapter.

So were you always good with money, or was it something you had to learn?
Oh yes, I tell people that my husband and I were what I would call financial frauds. And I don't mean that as doing something illegal. But we looked really good on the outside. We had a nice house; nice cars and went on great vacations.

But the bottom line was, when we started our road to financial fitness which was about 16 years ago, we had $10,000 in credit card debt. We didn't have a will; we had no emergency savings account. Financially, we were one week away from going broke, if something bad had happened.

I read a book on finances and this book made me realise we needed to get our act together. And that's what we did in small steps over the next few years, which then allowed me to take early retirement. Now we are always good with money.

But where do you learn it? In schools it's a hit and miss; sometimes they teach it and sometimes they don't. And it is left up to the parents to teach kids. But I never learnt it in my home. Kids emulate what they see from their parents.

Can you give us a little bit about the reaction to the book?
Well, we get emails all the time about the book. Or we do conferences with the book as the subject matter and we get great reactions from this.

People have been taking one action step at a time and it has been changing their lives.

However, I'm still a big believer that people should still work with financial advisers or planners. There are a lot of authors out there who say you don't need to work with experts. But like I tell everyone, "If your car broke down, would you go out and get a book and figure out how to fix it"? Of course not, you would go to a mechanic. So good financial planners can really help you along the way.

You have helped a lot of people over the journey, could you tell us about a special case that sticks out in your mind?
Yes, I can tell you a story. Her name is Mary Jo. She came to me several years ago because she had been in a long-term marriage, where she had never handled the money. In fact she only recently told me she would hand over her whole pay cheque to her husband and she would only get back $20 a week.

After five or six kids she left the marriage. She knew nothing about money and she had a lot of debt; many thousands of dollars worth of debt. She came to me and asked me if I would guide her and help her, which I was happy to do. She has come so far and it's so amazing to watch her. Now she is on our board of directors at Money Wise Women.

Now she has taught her 21-year-old son how to budget, and they have learnt together. She really is a huge success story.

Thanks for your time today Marcia Brixey, we have learnt a lot.