Book summary “Women & Money”: summary

Introduction

You may earn a good salary and manage a busy career while still feeling a quiet panic about your financial future. Society tells you that men handle money best, which often leaves you disconnected from your own bank accounts, investments, and long-term security.

True financial security for women requires transforming their emotional relationship with money, taking absolute control of career earnings, and protecting assets through essential legal and insurance documents.

Suze Orman argues in Women & Money that your net worth directly mirrors your self-worth. You must stop waiting for a financial rescuer and build a solid foundation of independence.

The book guides you through a practical roadmap to transform your financial life. You will learn how to overcome hidden shame, master daily banking, eliminate debt, invest for retirement, secure legal protection, and redefine your relationships.

• How do you align your internal self-worth with your external bank balance?
• What exact steps secure your emergency fund and eliminate bad debt?
• Which legal documents protect your family from financial ruin?

1. Mindset and Self Valuation

Modern women achieve immense professional progress, yet remain largely insecure when managing personal finances. While women make up 49 percent of professional and managerial workers and own 40 percent of all U.S. companies, Allianz Insurance surveys in 2006 found that 90 percent of women felt insecure about their finances. Two-thirds of women have not talked with husbands about life insurance and wills. Women are nearly twice as likely as men to retire in poverty.

Women must eliminate shame, stop treating themselves on sale, and align internal self-worth with external financial power.

How you treat your money directly mirrors how you perceive and value yourself. If you are not powerful with your money, you lack true personal power. Denying that money plays a role in happiness is a harmful myth.

• Find a few quiet moments.
• Write your own definition of a rich life.
• Remind yourself what you love about your life and how you wish to live it more fully.
• Articulate that which you cherish to find personal motivation.

Composer Allee Willis struggled with finances until she wrote down her definition of a rich life. This motivated her to move money to higher-interest accounts, pay down her mortgage, and meet with her accountant. To build a healthy relationship with money, you must abandon shame and blame. Shame keeps you hiding your financial ignorance behind a facade of capability, while blame renders you powerless.

You must rewrite the traditional script because twenty-first-century economic realities demand complete financial self-reliance. A 41 percent divorce rate, declining Social Security replacement rates, and longer female lifespans mean you must take total control of your financial destiny.

• Leave behind old attitudes, old excuses, and tired alibis.
• Refuse to hide behind family titles or job descriptions as an excuse for financial ignorance.
• State firmly: I am powerful, I am secure, I am in control of my financial destiny.

You frequently undervalue your services, time, and abilities, treating yourself as a commodity on sale. A fabulous massage therapist lowered her rate from $80 to $60 and then to $70 after a prospective client complained, only to have the client cancel the appointment on the way. Studies indicate that failing to negotiate salary at the start of a career can cost between $500,000 and $1 million over a lifetime. Women are 2.5 times more likely to feel apprehension about negotiating, and men are four times as likely to negotiate.

Volunteering often masks a reluctance to discuss power, with 33 percent of women volunteering compared to 25 percent of men. Bartering services without calculating true financial costs can drain your resources.

• Ensure you have the money you need to take care of yourself before bartering (Money first, barter second).
• Check that a barter is a fair swap matching hourly values rather than devaluing your work.

Giving away a $50-per-hour break for one hour a week loses $200 a month. Investing $200 a month at an 8 percent annual return accumulates $118,000 over twenty years.

• Be proactive by recognizing that getting more requires asking for more.
• Be impatient by taking action if you have gone two years or more without a raise.
• Be prepared by bringing a one-page outline of your achievements to compensation meetings.
• Stay in your seat during tough negotiations, ask for reviews in six months if immediate raises are blocked, or negotiate extra vacation time.

Debra, a reader inspired by Suze Orman, took a $3,000 base pay cut at age 47, rejected a minimal Christmas raise, negotiated for three months, and ultimately secured her requested retroactive increase. True wealth requires cultivating eight internal qualities: harmony, balance, courage, generosity, happiness, wisdom, cleanliness, and beauty. Honest giving must never adversely affect you.

• Give to say thank you and out of pure love without expecting anything back.
• Feel strongly that your gift is an offering given freely.
• Ensure an act of generosity never adversely affects the giver financially.
• Make acts of generosity consciously, ensuring gifts are not a burden to the recipient.
• Time acts of generosity so that you can truly afford to give.
• Ensure giving comes from an empathetic heart to enhance rather than diminish you.

2. The Save Yourself Plan and Banking

Mastering daily cash flow requires fee-free checking accounts, high-yield emergency savings, and strict FDIC insurance rules.

The Save Yourself Plan is a structured five-month roadmap designed to help you master core personal finance fundamentals through actionable steps. The plan breaks financial mastery into manageable monthly topics requiring a maximum of twenty-four hours total over five months. It covers spending, savings, banking, credit cards, FICO scores, retirement investing, essential documents, and insurance.

• Dedicate a maximum of one full day (twenty-four hours total) spread across five months
• Work through the plan sequentially from Month One without skipping sections or relying blindly on advisors
• Use the online resource at www.suzeorman.com with the access code EIEIO

A checking account should be used strictly for day-to-day cash flow and paying bills, not for long-term savings. Checking accounts are designed for ultimate convenience to handle monthly spending and ATM withdrawals, but they rarely pay a good interest rate. Keeping emergency money or large savings in a checking account is a costly mistake because it misses out on higher interest elsewhere.

• Open up a new checking account that is free of monthly maintenance fees.
• Notify your employer to have your direct deposit sent to the new account.
• Notify companies of any automatic payments or transfers you make from your checking account.

Many consumers lose money by maintaining interest-bearing checking accounts that require high minimum balances like $2,500 yet pay under 1 percent interest, only to face $10 monthly penalties if they dip below the threshold. You should find a clean account with no monthly fees, low required balances, free check writing, and online bill pay. Laziness and a lack of oversight cause people to shrug off minor fees like $3 ATM charges or $25 bounced-check penalties, plus daily overdraft fees. Ignoring small recurring fees amounts to significant losses that, if invested over a decade, accumulate into thousands of dollars.

• Keep a printed record of every transaction when you use the ATM.
• Empty your wallet's ATM slip section once a week into a dedicated storage folder, envelope, or box.
• Open every piece of financial mail daily, scan it for due dates, and place bills into a dedicated storage spot.
• Sit down once a month at home with a secure internet connection to review debits and credits against your bank statement.
• Verify that every ATM withdrawal and direct deposit shows up correctly on your statement.

A savings account serves as the cornerstone of financial security, designed for emergency funds rather than daily spending. Savings accounts offer higher annual percentage yields than checking accounts with zero risk of losing principal. You must focus on annual percentage yield when comparing financial institutions to ensure maximum earning power on emergency cash reserves.

• Open a new savings or money market account that is FDIC insured and carries a high APY.

Every individual needs an emergency savings fund covering eight months of living expenses, and you should maintain a separate personal account if you are in a relationship. A robust emergency fund protects against career gaps, medical debt, and sudden life changes. Maintaining a separate freedom account with at least three months of expenses ensures personal independence and prevents feeling financially trapped.

• Build a savings account over time with a balance large enough to cover up to eight months of living expenses.
• Establish a separate savings account in your own name if you are in a relationship, containing at least three months of living expenses.
• Divide monthly savings contributions 50/50 between your personal emergency fund and the family fund.

Setting up an automatic electronic transfer takes saving out of personal control, eliminating the temptation to skip a month when spending feels more appealing. The process requires providing the savings institution with your checking account number and the bank's nine-digit routing number.

• Sign up for automatic electronic monthly deposits into your savings account using your checking account number and bank routing number.

Savings account interest rates float according to the benchmark Federal Funds Rate set by the Federal Reserve, which meets eight times a year. A competitive savings rate should closely track the Federal Funds Rate, and any account yielding more than three-quarters of a percentage point below it should be abandoned for a better option.

Deposits are federally insured against institutional failure up to specific limits, whereas investments like stocks and mutual funds are not. The Federal Deposit Insurance Corp. and the National Credit Union Share Insurance Fund protect consumer deposits in checking, savings, MMDAs, and CDs up to prescribed amounts per institution. Stock mutual funds, bond funds, and individual equities purchased through bank subsidiaries carry no deposit insurance and can lose principal value.

• Verify that any financial institution where you keep money is an FDIC member or covered by the NCUSIF or state plan.
• Ensure full insurance coverage rules are met if you hold more than $100,000 at any single institution.

3. Credit Cards and Debt Management

Eliminating bad debt, building independent FICO credit scores, and aggressively paying down high APR balances form the foundation of credit health.

Every woman must have at least one credit card solely in her own name to build an individual financial profile. Relying solely on joint cards or debit cards prevents building an independent credit profile, which is essential for renting apartments or getting loans if life changes. You can shop for card deals using online tools and follow strict criteria:

• Shop for good card deals at www.bankrate.com and www.cardweb.com.
• Get a card that is 100 percent free with no annual fee.
• Make sure there is at least a three-week grace period.
• Look for the card with the lowest permanent interest rate of 10 percent or less.
• Use the card at least once a month and pay the entire bill on time every month.

A secured credit card acts as a stepping-stone to build a credit record when regular cards are out of reach. By placing a cash deposit that matches the credit limit, the card issuer takes zero risk while reporting monthly payments to credit bureaus, eventually establishing a qualifying FICO record.

• Send a deposit of roughly $500 to open the account.
• Check that the secured card issuer reports payments to Equifax, Experian, or TransUnion.
• Use the card for regular purchases and pay the balance in full each month.
• Check with the credit bureaus after six months to verify reporting.

Scouring credit card statements monthly and beating due dates protects against universal default and steep penalty fees. Being even one day late on a payment can trigger a hefty fee of $39 and activate universal default, allowing card issuers to hike interest rates across all cards. Minimum payment due bait usually represents 3 percent or so of your total bill.

• Open and scour every statement immediately to verify charges and credits.
• Get checks in the mail at least five business days before the due date.
• Use online payments with a lead time of at least two business days.
• Ignore the minimum payment due bait and pay the full balance.

Paying only the minimum amount due on a credit card drastically extends the repayment period and multiplies total costs. Because minimum payments typically cover just three percent of the bill, carrying unpaid balances leads to decades of interest payments that far exceed the original purchase value. A $2,500 credit card bill at a 16 percent true interest rate paid only by the 3 percent minimum will take nearly fourteen years to clear and cost $1,844 in interest. This results in paying 74 percent more than originally spent. Holding $10,000 in credit card debt takes more than twenty years and adds $7,843 in interest.

Good debt finances an asset that rises in value or earning power, whereas bad debt is borrowed money spent on depreciating items or consumption. Mortgages and student loans are classic examples of good debt because homes appreciate and education increases capacity, while credit card debt and car loans represent bad debt.

• Sort current debts into good and bad categories.
• Minimize car debt and aim to pay it off within three years max.
• Never lease a car.

Using a home equity line of credit to pay off unsecured credit card debt places a primary asset at risk and encourages repeat spending. Transferring unsecured credit card debt into a secured debt backed by home equity can force a home sale if payments fail, while often leaving the user free to run up new credit card balances.

Transferring high-rate balances to a low introductory rate card accelerates debt elimination if handled without triggering new charges. Introductory zero-percent offers require vigilance because transfer cards often charge high rates on new purchases, and issuers apply payments to zero-interest balances first. Typical balance transfers carry a 3 percent fee or a typical fee cap of $75 or so.

• Search for balance-transfer card deals at www.find-cards-now.com.
• Check transfer fee caps, noting differences between flat 3 percent and capped fees.
• Avoid carrying the transfer card in your wallet to prevent new high-interest purchases.
• Limit new card openings to no more than one per year to protect your FICO score.

Paying off credit card debt systematically by targeting the highest APR card first minimizes total interest paid over time. Consumers should list cards by APR, pay the minimums on all cards, and direct all extra funds to the highest-rate card while keeping fixed payment amounts even as minimums drop.

• Add up all unpaid balances and arrange cards by APR from highest to lowest.
• Commit to a fixed total monthly payment on the highest-rate card and ignore subsequent lower minimum statements.
• Roll the entire payment amount into the next-highest APR card once a card is fully paid off.

A FICO credit score is the gold standard metric lenders use to determine creditworthiness and financing terms based on credit bureau files. Generated by Fair Isaac Corporation using bureau data from Equifax, Experian, and TransUnion, the score ranges from 300 to 850 and is heavily driven by payment history and debt amounts, which determine 65 percent of your score. The top tier ranking is 760 or higher. You can get your score for a regular fee of $15.95.

• Get your FICO credit score at www.myfico.com.
• Obtain free annual credit reports at www.annualcreditreport.com or by calling (877) 322-8228.

4. Retirement and Investment Strategies

Prioritizing retirement over children's college funds, harnessing compound growth, and maximizing employer matches and Roth IRAs secure long-term independence.

Suze Orman argues that parents who fail to save enough for retirement become a financial burden on their adult children. Student loans are readily available for college, but loans do not exist for retirement. Funding long-term retirement accounts first is the most generous act you can do for your family.

Starting to save for retirement early matters far more than the total principal invested. Compounding creates a snowball effect as you earn returns on previously earned interest over decades.

Mary starts investing $200 a month at age 25, while Dee waits until age 45. At age 65, Mary has invested $96,000 total and accumulated $702,856, whereas Dee has invested $48,000 and accumulated only $118,589. Dee would need to invest $1,200 a month starting at age 45 to reach Mary's final total.

Failing to contribute enough to a workplace retirement plan to secure the maximum employer match turns down free money. Employer matching contributions act as a retirement bonus. In 2007, the maximum 401(k) investment limit was $15,500, with an extra $5,000 catch-up contribution limit for individuals over fifty.

A 401(k) portfolio for long-term investors should focus primarily on broad stock index funds and international equities. Stocks outperform bonds and savings accounts over decades and provide necessary growth to beat inflation.

• Call customer service or go online to change contribution allocations.
• Allocate 90 percent in an index fund following a broad benchmark of U.S. stocks.
• Allocate 10 percent in an international fund or international index fund.

Taking loans or cashing out retirement accounts before retirement triggers severe penalties and double taxation. Enron employees lost their jobs and had their entire retirement accounts wiped out because their 401(k) assets were heavily concentrated in company stock.

• Never take a loan from a 401(k) plan.
• Never cash out a retirement account when leaving an employer; choose an asset transfer or rollover instead.

Roth IRAs provide tax-free growth and withdrawal flexibility for contributions. In 2007, the maximum Roth IRA contribution limit was $4,000 for individuals under fifty and $5,000 for those fifty or older. Single filers needed a modified adjusted gross income below $114,000 in 2007 to qualify directly. Married couples filing jointly needed an income below $166,000.

• Fund an emergency savings account alongside a Roth IRA.
• Divide monthly investment amounts between savings and a Roth IRA if money is tight.

Exchange-Traded Funds (ETFs) suit annual lump-sum investments because of low expense ratios. No-load mutual funds work better for periodic monthly investments to avoid per-transaction trade commissions.

• Opt for ETFs for an IRA if making one annual lump-sum investment.
• Opt for no-load mutual funds if making smaller monthly or quarterly investments.
• Verify that mutual funds have no front-end load or deferred sales charge (avoid funds with A or B in their name).

High-income earners ineligible to contribute directly to a Roth IRA can utilize a backdoor strategy by funding a traditional nondeductible IRA and converting it. Beginning in 2010, federal law allows individuals of any income level to convert traditional IRAs into Roth IRAs.

• Fund a traditional IRA to the maximum if income exceeds direct Roth eligibility limits.
• Contact the brokerage firm in 2010 or later to execute a conversion form to move traditional IRA balances into a Roth IRA.
• Report the conversion and pay applicable taxes using IRS Form 8606.

5. Must Have Legal and Insurance Protection

Revocable living trusts, advance directives, term life insurance, and extended home insurance are mandatory shields against catastrophic financial loss.

A will is not enough because it only goes into effect after death, requires expensive probate, and can be overridden by other asset titles. Suze Orman's mother Ann Orman could have left her $200,000 home through a will requiring months of probate and up to $16,000 in legal fees in California, or through a revocable living trust transferring ownership for about $250 in a few weeks.

Creating a trust is useless unless it is funded by legally transferring asset titles into the name of the trust. Co-owning property as joint tenants with right of survivorship means the surviving owner instantly inherits 100 percent of the asset upon death, completely bypassing wills and disinheriting children from previous marriages. A woman in a second marriage who adds her new husband to her home's title as a joint tenant with right of survivorship will accidentally disinherit her own children if she dies first, because the husband automatically becomes the sole owner.

• Transfer real estate titles to the trust
• Transfer nonretirement investments to the trust
• Transfer savings and credit union accounts to the trust
• Transfer outstanding loans into the trust

Janet Dobrovolny, an estate lawyer in Emeryville, California, charges about $2,500 for a married couple with two kids, one home, and an estate under $1 million to create all documents and fund the trust. Suze Orman's Will & Trust Kit offers an alternative for $13.50.

• Ask friends, colleagues, or real estate lawyers for attorney recommendations
• Search for estate attorneys on www.findlaw.com
• Verify the attorney has practiced wills and trusts for at least ten years
• Contact the state bar to check for disciplinary records
• Talk to at least three lawyers before deciding

Anyone with financial dependents must carry a life insurance policy, including stay-at-home mothers whose families would incur significant costs to replace their daily childcare and household labor. Always choose term life insurance instead of cash-value policies because term insurance is dramatically cheaper and provides pure protection without costly, unnecessary investment features.

• Get life insurance to protect anyone who is dependent on your income.
• Buy term insurance and avoid cash-value policies.
• Opt for a guaranteed renewable term policy.
• Aim for a death benefit equal to twenty times your dependents' annual income needs.
• Make your revocable living trust the beneficiary of your life insurance policy.

Homeowners must verify that their home insurance policy includes extended or guaranteed replacement cost coverage rather than actual cash value or basic replacement cost to avoid massive out-of-pocket rebuilding expenses. Hurricane Katrina victims discovered that standard policies failed to cover expected losses, and homeowners often confuse market value with the actual dwelling reconstruction value.

• Make sure your dwelling limit coverage reflects current rebuilding costs.
• Ensure your policy is for guaranteed replacement cost coverage or extended replacement cost coverage.
• Confirm that your policy includes an automatic inflation adjustment of 4 percent or 5 percent annually.
• Secure additional living expense coverage with no dollar and time limits.
• Buy a separate personal umbrella policy with at least $1 million in coverage if your assets exceed $500,000.

6. Relationships and Personal Power

Healthy partnerships demand doing what is right over what is easy, sharing financial transparency, and building self-worth through vocalized personal power.

Financial health in relationships requires doing what is right rather than what is easy, such as refusing to bail out financially irresponsible loved ones. Women often equate giving money with a show of love, sacrificing their own financial security to help family or friends.

Lynn, a woman in her forties caring for her elderly father, had a boyfriend with $30,000 in credit card debt and no savings who pressured her to let him move in until she finally broke up with him.

Get out a piece of paper and a pen and write down the following words:

• From this moment on, when it comes to my money and my relationships, I promise always to do what is right rather than what is easy.
• Sign it and date it.
• Tape it where you will always see it—whether that’s on your mirror, computer, or dashboard—or stash it in your wallet.

Unmarried couples living together should split household expenses proportionally based on each person's take-home pay percentage rather than automatically defaulting to a 50-50 split.

Add your monthly take-home pay to your partner’s monthly take-home pay to find the total household income.

• Divide total monthly expenses by total take-home pay to derive a percentage.
• Contribute that exact percentage of each person's take-home pay toward monthly joint expenses.
• Set up a joint checking account to pay for household bills one week before the payment date after both have deposited their shares.

Sharing Fico scores before committing to a life partner provides a window into their financial makeup and reliability. Couples marrying or moving in together should use prenuptial agreements or cohabitation agreements to clearly define separately owned assets versus shared property.

Stay-at-home mothers contribute labor equal to breadwinners and should never have to ask for money or treat income as solely belonging to the working spouse.

• Work together with your partner to confirm if living on one income is financially feasible.
• Agree that whatever money is left over at the end of each month after bills and retirement funding is evenly split into separate checking accounts for personal spending or saving.
• Share financial burdens and sacrifices equally if there is no extra money.

10 Key Ideas

1. Your net worth directly mirrors your self-worth, meaning you must stop treating your time, abilities, and services like a commodity on sale.
2. Checking accounts should be used strictly for day-to-day cash flow and fee-free convenience rather than holding long-term emergency savings.
3. Paying off credit card debt systematically by targeting the highest APR card first minimizes total interest paid over time.
4. Fulfilling the 20x income life insurance rule ensures your dependents are fully protected using affordable term life policies.
5. Prioritizing retirement over children's college funds prevents you from becoming a financial burden on your adult children.
6. Harnessing compound growth through early investing matters far more than the total principal invested over decades.
7. Creating a revocable living trust protects your assets from expensive probate and ensures proper transfer to your beneficiaries.
8. Unmarried couples living together should split household expenses proportionally based on each person's take-home pay percentage rather than a 50-50 split.
9. Refusing to bail out financially irresponsible loved ones ensures you always choose what is right over what is easy.
10. Saying your full name with confidence anchors the inner power and financial self-reliance needed to control your destiny.