AN006: Your Breadwinner Mindset
Are you ready to earn more and worry less?
Women with wealth know the important role that mindset plays in creating a prosperous financial future.
Today I’m delighted to share with you an interview with financial expert Jennifer Barrett, the author of the new book, Think Like a Breadwinner. Jenn is the Chief Education Officer at Acorns, the saving and investing app. Over her career, she’s also been the Personal Finance Editor at CNBC Digital, Editor in Chief at DailyWorth, and a contributor to publications like the New York Times, Wall Street Journal, and Forbes.
Jenn writes about her own epiphany of being a new mom and realizing with startling clarity that she had subconsciously handed over a lot of the financial planning — and the power over her future — to her husband. She was (and remains) happily married with two sons, but knew that if they were going to achieve what she had dreamed for their family, she needed to abandon her passive role. That mental shift launched her personal transformation into a breadwinner, and led to her new book.
Terri Lonier: Jenn, we’ve heard so much about the gender pay gap, and women facing a lifetime of lower earnings. How does a breadwinner mindset attack that gap?
Jennifer Barrett: Our earnings are the springboard for all our wealth-building efforts. A breadwinner starts with thinking strategically about earnings and our career — and not just in terms of what we enjoy doing or may be good at, but looking at what our career is going to pay. Will it support the life that we want? I know it’s a question I didn’t ask when I started my career. And it’s a crucial part of a wealth mindset.
TL: How did women get so passive? Is it due to generational or cultural influences? I keep getting this Disney princess image in my mind, waiting for Prince Charming to arrive.
JB: We’re not doing it consciously. But if you step back and look at the stats, we see that women invest less and have less money saved. We have more credit card debt. We have more student loan debt. We have lower credit scores. Plus, we overwhelmingly choose the lowest paying occupations — and when we’re in the higher paying occupations, we choose the lowest paying tracks. So we’ve set ourselves up for bigger challenges, right from the start.
TL: But there’s also a mindset shift from thinking about paying the bills to something bigger, right?
JB: Yes! This is about building wealth to support the life of your dreams. That is very different from making enough to cover the bills. Rather than thinking “What can I afford on the salary I have?” it’s about “What do I want in my life?” What is the house I want? What is it going to cost? How much do I need to earn? How much do I need to save, and invest? It’s about being intentional, with eyes wide open, about what you want and how you can get there.
TL: So what are some pragmatic things that women can do to start making that mindset shift?
JB: First, make sure you’re earning as much as you can at any given point in time. Know what your market value is by having candid conversations with peers, and checking sites like Glassdoor and FairyGodboss.
Also, when you ask for a raise, quantify the value you bring to your company. Literally, come in with data points. For example: Because of my work, we increased revenue by X%. These were my KPIs and I exceeded them by this percent. I helped contribute to the retention rate among users by this amount. Understand that it’s really much harder to argue with numbers than if someone comes in and says, “I think I should be paid more because I work so hard, and that person down the hall is making more.”
TL: Great point. What about investing?
JB: Biggest thing: Get in the game. Get. In. The. Game. And not just putting some money in a high-yield savings account. Put a chunk of each check into the stock market, in a broad array of stocks, for example via an index fund. That way you have money growing for you for all your mid-term goals between now and your retirement. The best approach is to make it automatic, with each paycheck. And at the very least, make sure you are taking advantage of your employer match for your 401(k), which is essentially free money waiting for you to take it.
TL: You’ve said that breadwinners think about credit in a very different way. How?
JB: Yes, it’s very different from how it’s been marketed to us like free credit, of closing the gap between what you can afford right now and the life you aspire to. That’s such a dangerous trap. Instead, breadwinners flip that on its head. They think: How can I build credit? How can I have the best credit score possible, so I get the lowest interest rate when I take out a mortgage or a business loan? Breadwinners are also very strategic with their credit cards. They pay them off each month and rack up reward points or get cash back. It's using the cards to support the things you want rather than paying for the privilege of using the cards.
TL: Breadwinners seem very self-aware about what they want.
JB: Yes, and it’s a mindset that can be developed. It’s about making the choices that will support the future you want. The more savings you have, the more money invested you have, the more choices you have, the more freedom you have. There is nothing more empowering.
Have you been on Clubhouse yet, the social media real-time conversation platform? Jenn will join Terri in the weeks ahead for a live Clubhouse chat. Details in a future Athena Notes.