Jean Chatzky’s 5 best tips on silver coins

Jean Chatzky made a career out of helping women take charge of their finances. She’s written over half a dozen books on personal finance and worked with everyone from Oprah to AARP.

Over the years, Chatzky has offered a lot of financial information on topics such as budgeting and investing. And she literally wrote the book on Women with money. But while there is no shortage of great advice, there are a few tips from Chatzky that really stand out.

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1. Embrace your current reality

One thing Chatzky feels very strongly about is the need to be (brutally) honest with yourself. You can’t make financial progress until you’ve completed a full self-diagnosis and accepted the results.

So instead of making a half-hearted attempt at budgeting or setting broad goals that have little basis in your real life, you need to break everything down. The good, the bad, the ugly – admit it all. Put everything there.

How you do your financial self-diagnosis is up to you. You can use a full budgeting app or old school paper and pencil. Keep an expense journal or strictly maintain a more traditional account book. Anything that works to give you a realistic picture of your current state of finances.

When you know where you really are, in all of its potentially messy glory, any plans you make are more likely to be successful.

2. Compare only to yourself

When all of your finances are laid bare in front of you, it can be very easy to start trying to benchmark them against arbitrary, often external benchmarks. Do I have more money than the others? Is my stuff worth more?

Resist. The only person you should compare your finances to is you.

Instead of wondering how your bank account compares to your neighbors’, compare it to your needs. Can your savings account withstand a job loss? Do you have enough money in your retirement account when the time comes?

3. Set Goals, Then Break Them

Armed with the data from your self-diagnosis, it’s time to determine your financial goals. And yes, that means any long term goals you have, like retirement or buying a home. But it should also include your mini goals, your short term benchmarks for your own financial success.

Looking at a major life goal can be intimidating. Breaking these goals down into smaller tasks can make them easier to manage (and digest).

“Save for retirement” is a fat goal. It often takes hundreds of thousands of dollars and decades of work. However, “saving $ 500 for retirement this quarter” is a much smaller goal, a more manageable goal. But you will still feel like a success when you achieve it. And that success can help keep you on track to reaching your next mini-goal – and possibly your big ones, too.

4. Automate your savings

If every dollar you save forces you to go in and move it from one place to another, it may not always make the trip. While that dollar is waiting for you to move it, it may just be spent on something else.

Automating your savings helps take the human variable out of the equation. Instead of having to log in (or, worse, go to the bank) to transfer money from your checking account to your savings, automation does it for you.

Most banks allow you to set up automatic transfers of almost any amount, at any interval. You can set it up so that money is transferred every week, every pay period, every month, whatever works best for your budget. (Remember to include this transfer in your budget so you don’t spend the money you’re trying to save.)

5. Ask for the money you want

While some companies offer regular pay raises to their employees, many others do not; at least they don’t if you don’t ask for it. And that will double for women, who are statistically less likely to ask for more money.

That said, don’t just walk around the boss’s office and ask for an old raise. Know what you are worth. Do a little research to see what your skills and experience are worth in the open market so you have a solid foundation to build on when discussing your salary.

You are missing 100% of the increases you are not asking for, so ask!

To each his own

Chatzky has spent years honing his financial literacy, and his advice contains many gems. However, no matter how vivid the wisdom is, it is only worth how you put it into action. Be sure to follow any financial advice with a grain of salt and in the context of your own lifestyle and financial goals.

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