The Breadwinner Revelation
Technically, a lot of us are already breadwinners, responsible for at least ourselves. But we’re not all thinking like breadwinners—looking at how to ensure the income we bring in and the money we’re investing will be enough to support the future we want for ourselves and maybe a family, too.
After all, many of us were conditioned to believe that we wouldn’t have to take care of ourselves for very long, and we weren’t brought up to prepare for that possibility. So the thought of actually taking full financial responsibility for ourselves and our future plans can be daunting. If we do end up in the main breadwinner role in our relationship, it’s often not by choice.
The Benefits of a Breadwinning Mindset
Adopting a breadwinning mindset is rewarding and powerful. That’s not to say it is always easy. There will be unforeseen obstacles and emotions to deal with along the way. But they can be overcome if you’ve got the right game plan and habits in place.
The benefits of thinking like a breadwinner and taking control of your financial future go well beyond having peace of mind and money in the bank. Having control of your finances means having control of your choices. It means: never being stuck in a bad job, relationship, or neighborhood because you’re afraid you can’t afford to leave; having the ability to say no when you want to—and to say yes to opportunities that excite you, even if they may take some time to pay off; knowing you can achieve the life you want—buying your dream home, having a baby, traveling the world, or retiring early—without having to depend on anyone else; and allowing money to bring you joy rather than stress.
In this book, we’ll take a clear-eyed look at what we’re really up against when it comes to confidently building our wealth and closing the persisting gender gaps. This book will help you successfully navigate around the beliefs, biases, and barriers that threaten to hold you back. It will show you how to use money as a tool to create the life you want, not some scary, complex thing that’s difficult to manage or talk about.
More Savings = More Choices: Why Building a Safety Net Is Key
Saving and investing some of your income now helps that money grow over time. And that can give you more options later.
Whether we realize it or not, our spending is largely guided by the values we’ve prioritized. But whether those values are truly ours, or simply family or societal values we’ve adopted, is an important distinction. If we’re spending money in order to conform or to please or impress others—values that we may have picked up from social conditioning but which may not reflect our true desires—we may end up spending in ways that leave us feeling dissatisfied and frustrated. Because our spending is out of line with what we truly value.
“Societal values are often incompatible with personal values,” Jessica Dore, a licensed social worker and trained psychotherapist, writes on Psych Central. “The things we are taught to value through television, movies, and magazines may not resonate with what feels truly important or supportive of our values as individuals. As a result, we have all found ourselves stuck—at one point or another—chasing something that we don’t even want.”
The antidote to that is to be clear about your values and goals. And to spend mindfully. It can even help to ask yourself what value something brings before you spend money on it. Is your spending bringing you closer to the life you want or taking you further away?
Give Yourself Some Credit: How to Leverage It Responsibly to Your Advantage
There’s nothing wrong with using credit cards—as long as you pay off the balance quickly, ideally before the next statement arrives.
Used strategically, credit cards can help you build credit and even earn extra money. And building credit is a critical step to building wealth. The better your credit, the lower the rate a lender will charge you to borrow money. That can mean a difference of tens of thousands of dollars if you take out a mortgage. Literally. A recent study by LendingTree found that going from a “fair” credit score to a “very good” score (740 or higher) could save someone up to $41,416 in total interest paid over the lifetime of an average mortgage. And that difference makes it a lot easier to build wealth. A high credit score can even help you save money on your car and homeowners’ insurance.
Building wealth is one thing. But a true measure of your financial health is your net worth. That’s a snapshot of what you have in assets (meaning anything you have of value) minus your liabilities (the debts you owe). You could have $20,000 in your 401(k), but if you have $20,000 in credit card and student loan debt, too, you net out at zero. In fact, if you owe a lot of debt, your net worth can be negative even if you’ve got money saved and invested. Ultimately, you want the balance to tip waaaaay over into the positive (assets) column. The less you owe, the freer you are, and the easier it is to build wealth and set yourself up financially. The goal is to be net-worth positive—and to grow that number as much as you can.
Thinking like a breadwinner means thinking about credit in a whole different way. It’s thinking about how to build credit to get the best terms in order to minimize your debt and maximize your wealth-building potential. It’s thinking about how to leverage debt to actually earn money and grow wealth.
Invest in Your Future: How to Make Your Money Work for You
While women are almost equally as confident as men when it comes to financial tasks like paying bills and budgeting, men continue to be much more confident about managing investments—with only about one in four women saying they’re comfortable with how much they know about investing. The result is that many of us end up waiting too long to put our money to work by investing it.
This is a critical mistake. And it is probably the single greatest reason why we lag so far behind men when it comes to building wealth and having enough money for retirement.
That’s because time is often the single greatest factor in our ability to grow our money. More important even than the amount of money we invest. The earlier you start investing, with any amount, the better off you’ll be. Wealth building, financial freedom, the ability to make the choices you want to make, the postwork life of your dreams—it all comes down to investing. Right now. Today. No matter what amount you start with, the most important thing you can do is to start. Because the moment you invest your money, it can start growing—faster than it would sitting in the bank, and certainly faster than sitting in your wallet.
Step 1: Sign up for your employer-sponsored retirement plan.
Step 2: Contribute the maximum you can afford.
Step 3: Open a regular brokerage account for mid-term goals.
If you’re just starting to invest on your own outside of picking a plan for your employer-sponsored retirement account, you don’t need to do a lot of research. It’s a remarkably straightforward process:
- Open a brokerage account.
- Connect it with your bank account and transfer money to get started.
- Invest the money in one or more exchange-traded funds.
Getting the Dough You Deserve: How to Negotiate for More
The truth is, if your boss thinks you’re happy to continue doing the great work you’re doing at the same salary, he or she has no reason to pay you more. If an employer makes you an offer and you don’t counter it, there’s no reason to offer you more. You have to ask for it. Learn from my mistakes, and don’t wait for someone else to notice and reward the value you bring. Asking for more doesn’t just increase your paycheck; it has a ripple effect on your future earnings and your ability to build wealth.
Even a $5,000 salary difference can have an exponential impact over time. Start a job at $50,000 a year instead of $55,000 a year, and if your raises are percentage-based and your salary at any new job is partly based on your previous salary, the cumulative lost earnings can add up to between $1 million and $1.5 million over the course of a career, estimates economics professor Linda Babcock of Carnegie Mellon University. And that doesn’t include all you’ve missed out on in company retirement contributions that are based on a percentage of your salary.
Think about that for a minute. When you negotiate a raise of a few thousand dollars, or a raise that’s another percent or two higher, you are setting yourself up to earn tens or hundreds of thousands of dollars more over your career. You are ensuring that you have enough money to support your postwork life. You are able to build the kind of wealth that will allow you to become less dependent on those paychecks one day and to have more freedom to choose how you spend your time. Remember that when you’re negotiating.
Do Less, Achieve More: How to Focus on Work That Will Actually Help Your Career
The fact is, your time is finite. And so is your energy. And you need time to recharge. So it follows that you should allocate the time you have to the work and the people most important to you. This may be challenging when you first start your career, but it becomes increasingly important as you advance and the demands on your time increase. Delegate anything that doesn’t have to be done by you so that you have more time to focus on the work that can only be done by you. Ask for help. Enroll other people in helping you focus on the work you do best. Protect your time fiercely. If you don’t value it, no one else will either.
The mental hurdle for many women—one that may keep us from going after higher-level opportunities—is the belief that in order to pursue a career path with high earnings potential, we have to continue to take on an increasingly larger load and deprioritize everything outside our careers. While the unjust paradigm may still exist that says women must work harder than men to prove our value, there’s another way to approach it so that we don’t have to keep working harder and longer. We work smarter.
You progress in your career, the most value you bring to a job—or to your own business, if you have one—isn’t your capacity to work, but the skills, expertise, perspective, and experience that are unique to you. To be able to apply them most effectively, you need to allocate your time accordingly.
Ultimately, it isn’t working harder that will allow us to succeed—it’s working smarter.
Beyond Passion: How to Do What You Love and Get Paid (Well) for It
The fact is, if you focus only on going after your passion, the pay often doesn’t follow. I say that from experience. But we can do work we love—work that we feel so compelled to do, and so enjoy doing, that it often doesn’t feel like work—and also make a good living. We just have to consciously seek that out, rather than assume the money will naturally follow.
Maybe, instead of trying to identify our passion and thinking about how we can indulge it, we can look at what we naturally enjoy doing and are good at—basically, what we have to contribute to the world. And then look at what needs we can fill with those gifts that will also allow us to earn enough to support the life we want.
Figuring out how to combine our passion with the paycheck we want can take time. Often we may find ourselves veering one way or another—either earning a lot but feeling unfulfilled or doing work that fills us up but leaves us scrambling financially—before settling on a path that allows us to both do work we love and make enough money to support the life we want.
The trick is in creating a path that allows us to do increasingly more of what we love and that comes naturally—and to find or allow others who are better suited to do what doesn’t.