A new website for women, designed to help us figure out to better handle our money, has received $4.5 million from Accel Partners, a venture capital firm.
The site, LearnVest, is the idea of a 26-year-old Harvard grad, Alexa von Tobel, reports The New York Times:
Ms. von Tobel came up with the idea for LearnVest in 2006, during her senior year at Harvard. She speaks at an auctioneer’s pace and uses tidbits from Warren Buffett and neuropsychology to bolster her arguments. Yet in 2006, when she had a job offer from Morgan Stanley’s hedge fund, she realized there was something she was not confident about: managing her finances.
“How is it possible I’m going to be a trader and I don’t even know how to open a credit card properly or my credit score?” she asked herself.
Help me out here. How do you get into, and graduate from, a place as competitive as Harvard without a clue about your FICO score?
Is such fiscal illiteracy typical?
Writer Anya Kamenetz addressed it, and the many issues facing younger consumers, in her terrific 2006 book, Generation Debt.
Here’s an excerpt from an interview with her, then 25:
Going back to the personal for a moment, do you have any advice for people who are facing huge student loan debts, mounting credit card bills, and low-paying jobs in terms of practical day-to-day living?
Go to annualcreditreport.com and get your free credit report. That’s your real-life permanent record and it gives you a starting point for fixing your financial life.
Pay over the minimum payment on your credit cards, even if it’s just $10. You can set this up online, automatically. It can save you thousands in interest, depending on the size of your debt.
Open a savings account, even if you’re up to your ears in debt. Every time you deposit a freakin’ tiny paycheck, put a fixed amount into savings. It compounds over the long term and the next time there’s an unexpected expense, you’ll have something to fall back on.
If you’ve never heard of FICO — or haven’t recently checked your score — here’s the site.
Fiscal illiteracy is not an option!
I grew up in a family of freelancers, with no pension, sick days or paid vacation to look forward to, so knowing how much income I earned, spent, saved, invested — and owed, at what APR — became gospel for me as soon as I began working for myself, at the age of 19.
I’m disturbed by women who (why?) don’t take the time to understand their finances. There is no Prince Charming! There is, instead a sometimes confusing, overwhelming alphabet soup to learn, understand and use to your advantage, from FICO to 401(k) to IRA to Roth to SEP to ETFs to APRs.
The investment field is often dominated by men and who wants to admit you have no idea what they’re saying to you? Read “On Your Own Two Feet”, a smart book by two women on females and finances, and check out their list of resources and links. I interviewed Manisha a few years ago and she’s great; here’s her money management blog.
Like millions of others with excellent credit histories, I was really pissed off that my 9.9% fixed rate on my American Express Blue card had been switched for no reason other than their greed to 15% variable, so the other day I asked them to lower it. They did, by 1% that day, because I was annoyed and I asked.
My favorite book — because it addresses the underlying fear many women have of standing up firmly for their financial interests (Bitch! How dare she?) is aptly entitled, “Women Don’t Ask”. It partly explains why women’s salaries so often lag — from their very first job offer to their last – behind that of men. They’re scared to ask.