Spend Less, Save More, Invest Now
We’re living longer, social security is abysmal, and often people are living beyond their means. While all of this may sound dreary, financial advisor and author, Laurie Itkin, says there are still ways to come out ahead. Also known as “The Options Lady”, Itkin lives in Carmel Valley and serves clients throughout the country. She’s also a mentor to women launching new businesses through Hera Labs’ Business Accelerator. In a recent conversation, she shared some of her best advice.
You say most women are anxious and overwhelmed by financial options. How can you convince them to take risks?
Women are known for being good savers. You cannot grow wealth by leaving your money under the mattress. And with today’s interest rates, you cannot grow wealth by putting it in a savings account or a CD. So you must take risks. If you work during the day, you have to send your money off with a little briefcase at night and make that money work for you, and the only way you can do that is through investing the money.
Most Americans are not living this way. What is one tip you can give to help people live below their means?
You’ve got to have clarity on what your needs are and what your wants are. Suddenly, you start thinking, “Do I really need to upgrade my BMW to a Tesla? Do I really need to spend another $1,000 on new clothes?” You just start getting so self-aware.
You talk about saving and investing but, interestingly, you believe that some debt, especially for college grads is good. Why?
I know that a lot of parents don’t want their kids graduating with any debt. My grandfather helped and I worked, but at the end of the day there was about 40 percent of my college that I had to take loans for and pay off myself. And the burden is much larger for millennials, but I still think that it really empowers [students] to get the education, to have the debt, and learn how to budget and pay it off. I think there’s a balance. It teaches fiscal responsibility.
As a Certified Divorce Financial Analyst (CDFA), how do you help women who are contemplating divorce?
Before they go to the lawyer or mediation, I can sit down with them and go through their finances to help them understand where they would stand financially should the marriage end. I’m not championing them to end their marriages. This makes them stronger… I can help them know where they stand financially so they can make an informed decision.
You also work with entrepreneurs and startups. What’s most important for them to know?
Please don’t raid your retirement fund to pay for your business because you’ll come back to square one should your business fail. You may end up being in your sixties or seventies with no retirement assets at all!
Get a free copy of Itkin’s article: Five Money Mistakes Divorced Women Make and How to Avoid Them here: TheOptionsLady.com