The following is a transcript of this episode. It has been edited for clarity.
Maryann: We all want to retire happily with good health and enough money in the bank to carry us through our golden years. We spend a lot of time talking to one another about the health and happiness part. When it comes to the money bit, we often keep things to ourselves. But according to my next guest, a, financial advisor who helps women navigate their finances so they can retire on their own terms, we need to start talking about money now. On this episode, we talk about how your upbringing informed your current relationship with money and how you need to be involved with and know where you stand with your personal finances. You’ll learn how you can make the most of your money, even if you’re late to the savings game, by maximizing your savings and investments. And you’ll get a better idea of what you need to do now to empower yourself so that one day you can reap the benefits of all your hard work and enjoy the retirement you deserve.
Welcome to More Beautiful, the podcast for women rewriting the midlife playbook. I’m Maryann LoRusso, and I invite you to join me and a guest each week as we strive for a life that’s more adventurous, more fulfilling, and more beautiful than ever before.
Maryann: I am here today with financial advisor Iris Krause, who is going to talk to us about how we can make the most of our money, maximize our resources for retirement, and get us into a better mindset when it comes to managing our finances. Welcome to the show, Iris.
Iris: So nice to be here. Thank you.
Maryann: Iris, you grew up in communist East Germany, so I can only imagine how your perception of money was so different than most Americans’. Tell us a little bit about how your upbringing informed your relationship with money and how your journey to the states maybe may have changed all that.
Iris: It’s a great question and one I didn’t reflect on when I was younger. Life is what it is when you’re a child. But the truth of the matter is, growing up in East Germany, my dad was a professor of psychology. My mom was a psychiatrist, a doctor running a big hospital. They didn’t make much more money, if any, more money than a carpenter or mechanic. And even if you had more money, it wouldn’t buy you more.
The reality is, money didn’t define much. We all did the same kind of vacations. School was free, there was no private school. Retirement was government funded by deductions from your paycheck over life. And so, when I came to the U.S., all of a sudden money mattered. And for me, it was a big shock. And the scarcity mindset settled in for me. Like, oh, my God, I don’t have enough. I didn’t have anything. I didn’t have any family to rely on. So it was a big change and adjustment. I worked in finance and investments for 20 years, so I made a lot of money after a while, but it was a huge change. And still to this day, when I talk to my family in Europe, even just now, western Europe, they have a very different relationship with money, because it doesn’t matter as much, because the government takes care of education, healthcare and retirement, which, in my mind, are the three big ones.
Maryann: We say money can’t buy happiness, but money is, in fact, tied very closely to our relationships and our world viewpoints. It also gives us the freedom to live the way we want to live. Tell us why it’s important to think about money in that broader sense.
Iris: Ah, it’s such a great question. And the answer is very nuanced. No, money cannot buy happiness, and money affords us lifestyle choices, which do make us happy. There was a study in 2010 by Daniel Kahneman and his colleague Angus Deaton, both Nobel Prize winners, and they found there is a correlation between money and happiness up to an income (at the time) of $75,000 a year. That now equates to about $100,000, so that’s often what people reference. There have been [additional] studies in the last two or three years that show that [same] correlation. So more money does make people happier, but [because] it’s affording a different lifestyle. When you dig deeper, what you learn is that in countries with high income inequality, like the U.S., that correlation is stronger.
There is an index called the Gini Index that looks at income inequality. Zero would be equal. 100 would be very inequal. The US is about 40, Europe about 30. The Netherlands, like 25. In countries with this inequality, that relationship, that correlation continues. Because money protects us from negative circumstances. Think about a major health issue in this country. You might be saddled with a lot of costs and debt. That’s not the case in Europe. Think of education. If you have a child who needs a different kind of schooling and might benefit from private school. Well, if you have the money to afford it, that’ll make you happier because you do good things for your child. I think that is really important.
The other interesting thing in terms of research: Above a certain level, whether you have a million or two or three million, that correlation is not there anymore. There are many people who are multimillionaires who are not happier than us, regular people. Also, while having more money makes you happier, affords you lifestyle choices, striving for money does not. So if you have that scarcity mindset and you’re on this treadmill where you want to make more and more and more, that is actually correlated with less happiness.
Maryann: So interesting. Let’s get into the personal aspect of personal finance, because when it comes to money, so many women are still unwilling to open up and talk about it. I don’t know if it’s like that with men as much, but I know many women who are hush hush about money, how much they earn, what they’re doing with their money, etc. Why do you think money is still such a taboo topic, especially among women?
Iris: It definitely is. I would say more so among women. And the big thing is shame and lack of knowledge. We are not taught how money functions. Like in school, there are no classes and basic understanding of finances, of the concept of interest, time, value of money. Kids don’t know. So then you grow up, get into college, your parents take care of things. And at some point, when you make money, often in relationships, the man takes care of the money. The woman relies on the man to do that and doesn’t dare to ask questions. I hear so many stories from women coming to me, and I talk to them about their finances, and I pause. I’m like, do you understand what I’m saying? Do you understand the difference between the stock and the bond? And they are like, no, I don’t, and I don’t dare to ask. So, to me, the big thing is this: the shame, the guilt, and the emotional attachment to money. If you think of money, it’s just a tool. It’s a trading tool. If you think of the history, somebody had apples, somebody else had chickens. I trade you my eggs for the apples. That was all it was. It was a token to help with a trade, especially if a third person came in. We had to find a way to record that transaction. There’s no emotion attached to it. But now, for us, if I’m at dinner and I can’t afford that $100 dollar bottle of wine my friend wants to order…Many of us would not say a word and split the bottle and go home and feel bad. That’s where we need to have education and learn to speak up and get over that guilt and the shame we have around money.
Maryann: I agree. And also, in this country, money is so closely tied to our perception of where we are on that [socioenomic] ladder. Which rung we’re on. It’s always kind of there in the back of your mind.
Iris: Right. Especially, I think, for women [who] go through a…divorce [or become widowed]. All of a sudden, they stand there and they have to manage their own money, and they are so scared, and they don’t know. And the big question that’s related to that is, what is enough? We are being told that you need so much for retirement. What is enough? That’s really important to dig into.
Maryann: In terms of married or partnered women who don’t know what’s going on with their finances, I have to say, that drives me crazy. When I’m having a conversation with a friend and they say, I don’t know how much is in the bank, or I don’t know what’s going on with our retirement, and they leave it to their partners. That makes me nuts. So I want to dive into that. Because you say it’s really important for women to empower themselves in terms of money and to dive in and to know how much they have, in order to know how much they have to spend, and how much they need to save in order to meet their [retirement] goals. Tell us why staying on top of your finances—even if you have a partner who likes to handle the money—is so, so crucial, especially in midlife.
Iris: Think about your health. We take care of our health. Women in midlife especially. We eat healthy, we work out, we think of our mental wellness. We would never go with our partner taking care of that. And so many women really do a great job with our health, yet with money, for some reason we don’t—even though we know it affords us those lifestyle choices. And we are so attached to our, children, right? If we have children we want to give them the best education, so why do we not care about the money? It is that shame and that guilt. And in so many situations I find the basic knowledge is not there. [My clients] didn’t get involved early on. And now it’s like, I don’t know how to ask. And I would say, sit down with your partner and just be honest and vulnerable. Vulnerability is a strength. You just say, hey, can we spend some time talking about it?…You know, women live longer…and there are many, many midlife separations and divorces. You need to [understand your finances]. Why would you let somebody else take that over for you? And you can still have your partner manage [the money] if they know more about investments, by all means. But you need to understand.
Maryann: Iris, everybody seems to dream about the perfect retirement. But so many are afraid they won’t have enough when the time comes. Is it ever too late to start saving for retirement? And what should a midlife woman be thinking about if she’s trying to catch up—if she she hasn’t saved as much as she had hoped by now.
Iris: So, it’s never too late. You’ve got to start. I have so many clients in their 40s, 50s, even 60s who have done very little, some even nothing. And I’m like, well, we are living into our 80s and even 90s. So even if you’re 60, you may still have 30 years, right? So, yes, start whenever you’re ready. Forget about the guilt, the shame, and just say, hey, I’m going to start now. Now, the big thing with investment is time matters. I have some clients who are in their 20s, and I love that they think about it now, because time will really work in their favor. So I would always advocate starting early, but no, it’s not too late. And I think the key is getting into a habit. I find people at the end of the year who are like, “Oh my God, I’ve got to put money into my IRA or my 401k.” But you can, especially if you’re employed, do the deductions from your paycheck [throughout the year]. If you’re self employed, you need to have that same discipline. Put money aside regularly and get into habit. And there are tax advantages. There are lots of ways you can do it, but don’t put your head in the sand.
Maryann: My mom became a widow at age 45, and I remember watching her and being scared for her…
Iris: Right.
Maryann: But she really rose to the occasion. She did what she had to do. And I think a lot of women are faced with those circumstances. Like you mentioned, they could outlive their spouses, medical things can crop up, etc. Practically speaking, Iris, what are some things a woman can do if she really needs to catch up? What kinds of platforms or products or anything like that can you start with?
Iris: Yes. so first thing, really look at the budget and ask yourself: How much can you afford to put aside? How much do I spend, how much can I save? And people are often surprised and say, “Wow, actually, I could put more aside.” So I think that’s the first step. See how much you have and then look at your different priorities. When I work with clients, I start with having them envision their retirement. So we get a sense for what matters. Then we break that down into goals and then priorities. What do we do now? If you’re employed, maximize your 401k. I mean, that’s just a no brainer, right?
Maryann: Exactly.
Iris: And get the company match. I always say, do the 10% if you can. But if your company matches with the typical 3% for the first 3% and then half for the fourth and fifth, put in 5% so you get the full match. The second thing is, outside of the company—if you’re self employed, for instance—do a self-employment retirement plan, a SEP or a solo 401k.
There’s also a Roth IRA, which is after-tax money, which I very much recommend for those making less than $146,000 in 2024. So there are different tools. And, you know, the other thing that people sometimes don’t realize is for the 401k or even the traditional IRA, it’s pre-tax money. So you don’t pay taxes on this money, so it affords you a tax shield.
Maryann: Right.
Iris: Again, because time matters so much for investing, the sooner you do it, you really build up a lot. I mean, if you think about. There’s a general rule that money doubles depending on the return. Like if you get a 10% return, which is the average stock market return in the U.S., pre-tax, your money doubles in seven years. Think about when you start, when you are 25 or 30, you have a lot of time to double your money. And even if your net return is 5%, it’s 14 years, right? So put it in the 401k, the solo 401k, or the Roth IRA. Many of us have got to balance that retirement with college, taking care of the children and/or taking care of our parents. Because we are sandwiched in between. But if you don’t take care of your retirement, then you put the burden on your kids to help you. So you need to think of that first.
Maryann: One of the scariest aspects of retirement is wondering if you are going to need outside care, because so many of us are caring for elderly parents and realizing how crazy expensive a retirement community, or God forbid, a memory care ward for Alzheimer’s or dementia, is. And it’s only in this country that it’s so ridiculously priced. So how should we be thinking about that? Obviously, we need to know our own family histories and our own risk, but how do we [cover ourselves for these circumstances]?
Iris: I did that myself, actually, this year. I had term life insurance, and I canceled that because I’m like, you know, my kids are [grown].
Maryann: I just canceled mine too.
Iris Krause: So I didn’t want to spend that money anymore, and instead I used that money to buy long-term care.
Maryann: Yep. Did the same thing.
Iris: Risk. Right. Of, term care is high, and that’s a burden on the children. So, you know, if you’re 20, get life insurance, or 30 or 40, if you get into your fifties, there’s a point where it makes sense to get long term care. And, yeah, unfortunately, I think it’s a must have in this country because the costs are so high, and the risk of you needing it is pretty high.
Maryann: So how do we know—and this is the million dollar question—how much we need to retire? What are some of the things we should be considering? And are most people realistic about that?
Iris: No, most people are not. I mean, and it’s a spectrum, right? They’re the ultra who have way more than they need. But what I see is it’s very hard for people to understand. And so that’s when they put the head in the sand and don’t do anything, which is the biggest mistake. So I would say one thing is, with your partner, if you have one, or with your family, with your kids, think about what you want that retirement to look like. And when I work with people, I also spend a little bit of time on. Well, if you envision being surrounded by friends and family, or if you envision traveling the world, you got to also invest in your health and relationships. So I don’t want to completely discount those pieces because we got to look at it holistically. Now, with regards to money, the first step is to know how much you think you need per year. So that’s what I work with people and say, OK, if you think you need as a couple, maybe $10,000 a month…so $120,000 a year, and you need it in 10 years, you need to think about the inflation. So, just at a 3% inflation in 10 years, that actually means you need $161,000 of annual income. So then you need to look at, do you have a pension? Now, some lucky people, if you’re firefighter or work for [a state school] or a very big company, you might have a pension. So you take that off and you take off your Social Security. For now, it looks like there will still be Social Security for those of us who retire in the next 10 years.
Maryann: From your lips to God’s ears.
Iris: It’s a question. If you have a pension or Social Security, you take that off, and then you need to look at how much you have to have in your 401k or your IRA to get that remaining amount. And so you can assume, if you want to keep the principal, a 4% distribution. So you divide that amount into 4%. So if you need $120,000, and you look at the distribution of 3 percent to 4 percent, you need a $3 to $4 million portfolio. That means the principal is not touched. Now, if you are willing to dig into the principle, you assume a 25-year life span post retirement and a 3 percent return. You need a $2 million portfolio to generate $125,000 per year. But those are big numbers.
Maryann: Yeah.
Iris: So, yes, we do need a lot, and that’s what I work on with people, and I think there is a really important component to figure out. What does my retirement look like? You know, do I want to live on a yacht in Greece? Do I want to stay in the Bay area? Am I willing to move to Tennessee? Cost of living is very different.
Maryann: Yeah.
Iris: And we gotta really include in that conversation taxes and inflation.
Maryann: Right. Because there are so many hidden costs we might not be thinking about.
Iris: And your 401K, too. It’s pre-tax money, gross tax deferred, but when you take it out, you pay taxes. There are required minimum distributions. It is complex, and that’s why it’s so important to think about it. And you can’t afford [to] keep your head in the sand. You’ve got to face what is there so you can start. Because even if you are 60, there is time.
Maryann: How much in liquid assets do you recommend and where should you park those funds? I’m talking about [emergency funds].
Iris: I always look at an emergency fund that everybody should have for three to six months of your monthly needs. So look at what you spend per month and say, especially if you’re on your own, you might want to have six months. If you’re in a relationship, you have a partner, then maybe three months would be sufficient because the assumption is only one of you might lose their job or something happens. And where I would park it right now, interest rates are high. So put it in a high yield savings account, you get 4% to 5%. Put it in a money market fund. Don’t put it where you can’t access it. So not in a CD, because those have a term. That’s why I say high yield savings account or money market fund. I would not put it in the stock market. Stock market, to me, is anything you don’t need for the next seven to 10 years. Because over the long term, the stock market should and will, and has historically, returned more than a savings account.
In the short term, and especially right now with interest rates are, put it in a high yield savings. It goes back to the anxiety and the scarcity mindset, knowing you have that lowers your anxiety. Because you have a plan for retirement. Even if you start with putting $100, $200, $500 away a month. But you got to get in that routine because it’s so much easier than scrambling, at the end of the year.
Maryann: Yeah. Somebody I was talking to recently pulled out their phone, and we were talking about money, and they showed me this app that they’re using to save small amounts of money weekly. I can’t remember the name of it, but it’s a platform built for women who need to catch up with savings. I wish I could remember the name, because I’m seeing a lot more of that kind of technology emerge. Have you seen anything like that, Iris?
Iris: There are a lot of them out there. There’s Mint, there’s Monarch, there are several others. I personally don’t use them. I don’t like them, but I know many people do. And again, it’s this. Especially if you’re not intuitively aware of money and your spending, to have it in an app and see it visually [it could work]. Get on top of your needs and what you make and be smart about it. I mean, there are so many situations where I’m, like, oh, my gosh, if your company has a match to not do a 401k, you’re giving up free money. You put in money pre-tax as a self employed person. Would you rather put it in your retirement plan or give it to the government? So, get into the habit, even if it’s small amounts.
Maryann: I’m just curious, why don’t you like those apps?
Iris Krause: I think it’s just personal preference. I just do it myself. And for me, it’s tedious to do the daily stuff, but I know many people who love them. So, especially for my clients who are not intuitively aware of their money and not knowledgeable, I always recommend start writing it down and use a tool. And what I keep hearing from them, every single one, is, oh, now I feel better. So knowledge is power and kind of lowers the anxiety. So, you know, again, everybody is different. I have some people who say it stresses them out to look at it this way. And I think it’s okay to have your personal preference. You know, some people balance a checkbook, write down everything. I don’t. I should, but I don’t.
Maryann: I feel like I used to do that, but now everything is on your phone. It’s so easy to see everything coming and going.
Iris: And we have these different tools, right? There’s the bank account, there’s Venmo. So the money is in different places. So, again, do what works for you, but know what you’re spending and what you’re making and start putting money aside. I mean, that’s always, to me, the first thing. Well, the first thing is getting rid of debt. I’m not saying get rid of your mortgage, but that credit card debt. Then build your emergency fund, and then think of retirement.
Maryann: I’ve said this on the show before, but I’m going to say it again, because there is nothing like making you think about your spending than cleaning out the house of a parent who’s passed away or has gone into assisted living. Because when my mother moved into assisted living, my sister and I cleaned out our childhood home. [In the process of dumping] decades worth of stuff, you realize nobody needs this kind of stuff. You realize that when you die, someone’s gonna be sitting there shredding things and going to Salvation army and [getting rid of your stuff]. And you start to think about what you really want to leave behind. Is it just a bunch of stuff that no one needs. A lot of women I know are taking a really hard look at that now.
Iris: Right. And I think that’s so many of those things. It’s the stuff we buy. It’s subscriptions. So many of us have ongoing subscriptions. You look at your credit card, you’re like, it’s $19 here and $25 there.
Maryann: It adds up.
Iris Krause: It adds up. It’s the habits, you know, the stop at Starbucks or whatever you do on the way to work. Do I need that, or can I make my coffee at home? How much does it matter? It’s so important to actually look at your habits and what you’re doing. And also I find that communicating with our children. So I have, you know, a young adult and a teen, and it’s like this, oh, I lost my Apple pencil. Can you buy me a new one? How about you look for the one you lost. And then, well, maybe we split the replacement. Do you need the Lululemon leggings or does a pair of regular leggings work just fine?
Maryann: Besides having the retirement plan, getting our finances in order, knowing what we have right now and figuring out how much we need, what are some other financial goals that women might consider in midlife?
Iris: I think the big one to me is long-term-care insurance. The other is talking to your parents. You know, some of us have really good relationships. For others, money might be a taboo topic with their parents. But we need to know, will we be faced with needing to foot that nursing home bill, or are we going to inherit a lot of money? Either way, we have got to have a plan. We need to be open with our parents and with our children, and to understand the financial implications. And I would say again, eliminate credit card debt, [establish] an emergency fund, and save for retirement. Those are the big ones. And also really being clear with your partner, if you have one. Getting out of that taboo topic and talking about whether or not our values are aligned. For instance, if we have an emergency, how do we handle that? What is our priority? Are we OK with our kids going to private college? Or how do we deal with not having the money for something else? Like, one of the things I kept telling my kids is we can only spend the money once.
Maryann: Yeah.
Iris Krause: Think about, does this matter or does that matter? Is it more important that you go to this college or buy this car or go on this trip? And for them to learn that. That’s not scarcity. That is more like rational thinking and being clear on what matters…Taking care of your health is important in this country. What are my priorities? And I think that’s just facing it, thinking about it, and making the choices. You can eat healthy without a lot of money, but it takes awareness.
Maryann: I’m glad you brought up the partnership, the communication, because that is one of the things that I see and hear a lot among my female friends, this discrepancy between how they view money and how their partners view money. Iris, if you have a partner with whom you’re not seeing eye to eye about money, if the two of you have very different views on money, how can you talk to that person and make sure you get on the same page?
Iris: It’s such a great question. And, you know, the reality is, it depends on your relationship with a person. What I often find is, we assume the other person has a different view. We assume they have certain priorities, but we haven’t even talked about it. In so many relationships, money and sex are often the two biggest topics. So bring it up. I mean, make a date, make a family meeting to talk about it. And I would say, lead with curiosity. Ask questions, because so many of us, myself included, go very quickly to judgment.
Especially if my partner is very financially savvy and I’m freaking out because, you know, he took out a home equity line to buy a car or boat or whatever, I might be all anxious about it. But how about asking, why are you not worried about this? Why are you comfortable with that? So maybe I can take on that comfort. Open the discussion. Maybe do it with a financial advisor. I do work with couples, but I’d also say start with each other. Communication is a key to a good relationship, and we’ve got to get rid of that taboo. Money is not bad. So many people…hate talking about money. But money is not good or bad. It’s a tool.
Maryann: It’s so interesting, that question, why are you not worried? Or why are you worried? Because you do have to delve into someone’s childhood and how their perceptions of money were formulated. Because, for example, my father died at age 46. My mother was a widow. I came from a home where my parents were living paycheck by paycheck. In contrast to my husband’s parents, who are in their 90s and doing really well. You should ask each other questions about how they grew up, how money was viewed in their home. You can learn a lot.
Iris: Right. And I think it’s also interesting to learn and then jointly come up with, what is the truth for your family? What are the values? And set those priorities saying, you know, maybe you’re fine going camping and saving more money for retirement. Or maybe you’re saying, we actually can afford the trip to Fiji, it’s no problem. But being clear on your values is absolutely critical. And as the kids get older, including them, because we don’t want them to grow up like us and be unclear or ashamed or much emotions around this topic, if we can include them and instill the values of curiosity and knowledge, they will be so much better off.
Maryann: How much should we tell our kids and at what ages? because a lot of parents I know are hesitant to either express uncertainty about their financial situation or to say that they have a decent amount of money because they don’t want their kids acting one way or another about money. What’s your recommendation on that?
Iris: You know, I always lean towards honesty. Be open, especially as the kids get older. But even with the little ones, I feel like you can instill those messages like, hey, you can spend your money only once; what do you choose? You can give them allowance [to help them] understand [how to spend their money wisely]. And you know, there are good apps, good tools. Like I had always like three buckets—spend, save and share—for the kids and they could split their allowance. Encourage them with that. I did like when they were little and they would go into a store and say, I want this stuffed animal, I want this toy car…I would be like, OK, let’s take a picture. And if next week you’re still interested in it, we talk about it…I think as they get older, especially in high school choices and then college, include them. You don’t have to share every single thing, but include them, make them aware of the implications and I think that makes them a better adult.
Maryann: Well I think that’s more of my question with older kids, because with little kids it’s more values based how you do it. You know, in our family, we don’t spend our money that way. You know, we don’t buy seven pounds of candy with our allowance. But, you know, my question was more like, how much do we tell them when they are teenagers or heading off to college? Because I’m not throwing anybody under the bus here, but I know people who tell their kids that they have a lot of money or that they’re going to buy them an apartment when they graduate. And that’s, to me, it just seems nuts. Like, it’s just they have to make their own way to some extent. Right?
Iris: Yes.
Maryann: So I want to get a little bit into older children or young adult children. What we should talk to them about? And how much should we be helping them out? Because a lot of kids end up being [financially] needy well into their 20s.
Iris: Both great questions. So how much should we tell them? I am for very open book. I’m not going to tell them necessarily the details of my retirement or so on. But if they ask, I would. I really believe once they’re later stage of high school and you go into the college choices, I’d say, here is what we have and here’s the situation here, the cost and even like, encouraging them, “Hey, if you want to go to this school, you need to do something [such as get a scholarship].”
Maryann: Get some skin in the game, right?
Iris: So I think really honest communication is the way to do. As they get older, you know, how much to help them. Again, every family will have a different choice. You know, I have some friends who are like, you know what, after I’m done, after high school, you take on the debt for college, it’s your business. I believe that in this country, if we can afford it, I want to help my kids with college and I want them to have skin in the game and it’s nuanced, again, depending on the child, how much they can, what’s the right fit? But I absolutely think I want them to contribute, work, be very aware of the choices, right? So if I go to a state school, then maybe I don’t need a side job. If I choose to go to that private school, I need to work. You make the choice. I want you to own it. I don’t believe in, you know, [giving] my kid a brand new Tesla for their 16th birthday. Now, you know, living in Marin, I certainly know families that do that, and that is their choice. I’m not going to judge them. You know, my kids bought used cars with money they made, and I contributed half and they contributed half. So I think it’s a family choice. My view is I want the kids to learn the value of money. And in my work, I really focus on getting out of a mindset of scarcity to [one of] abundance. And that feeling of abundance is not correlated to how much we have. I know people who make very little, who live in rental apartments and have a whole mindset of abundance and generosity. There’s so much research around it. Lynne Twist wrote a beautiful book about money. She noticed there are people who have so little, who are at or below the poverty line, who are still so generous.
Maryann: I’m so glad you brought this up because I love this concept. And I was just talking to a friend about the fact that money has an energy…If you are [generous and] using money to maybe have experiences and help others in your life that need it, it always seems to come back to you.
Iris: Yeah. And generosity feeds us. I mean, there’s research showing us that actually the giver gets more from the act of generosity than the receiver. It makes you feel so good if you can help somebody. And then going back to my needs, do I really need those Lululemon leggings or that matcha latte, or can I make one at home and then be more generous with other things? And I want to instill that in my kids and I want them to feel that we can live in abundance by having family, by having joy, by having help and having enough money, of course, to go to a good school and take care of our healthcare needs and all of that. But it doesn’t have to be a certain name school, name brand. Where do I find abundance in my heart? And that goes directly to this feeling of enough. I’m enough the way I am and I’m a wonderful, compassionate person. Even with regular clothes and an Acura with 180,000 miles. it drives just fine.
Maryann: That’s funny, I could never understand people who are into really expensive cars.
Iris: Again, it depends. my son loves cars, so I had to adjust and say, OK, this really matters to him and support him to some degree and say, you know what you need to contribute.
Maryann: Right.
Iris: For me, it’s such a big thing to lead with curiosity and not judge, but always look at what do I actually need. If I look at what I really need, yes, my health is important and connection, friends, relationships… I can go camping, I can sit, have a picnic at the beach with friends and have the greatest time and don’t need to go to the fancy restaurant and spend $100 or more per person. We can have a great time and we can be inclusive. That’s the other thing about money, because it’s such a taboo topic, right? You might have friends who couldn’t afford that meal in the restaurant or who wouldn’t join because they don’t dare to tell you that this is not within their budget. So instead, you can say, Hey, let’s all go to the beach; I’ll bring the baguette and you bring the cheese and somebody else bring a bottle of wine. We’ll have a great time and we can include everybody.
Maryann: I love that. That’s really nice. I’m thinking of a famous financial advisor person. I’m not going to say her name, but she had a show and she would say, save yourself first. Like on an airplane, put on your own oxygen mask first. Make sure you have enough in your retirement fund before you give your money away or help your kids buy a house or a car or this or that. Do you agree with that philosophy?
Iris: I, would say not 100%.
Maryann: Elaborate on that.
Iris: There is truth to that. Like I shared earlier, I do think it’s important for me to have long-term care so I don’t saddle my kids with that huge obligation. To me, the extreme of that…goes back to this hoarding. I need to have 2 million, 3 million, 4 million in my retirement fund before I can share and be generous. That doesn’t feel right to me. And I know it’s also not true. So I think it’s a balance, right? Say, yes, I am going to take care of my retirement because I don’t want to be a burden to others and I want to feel safe, but I will actually feel more abundant if I can also share and also enjoy life. It doesn’t have to be all stashed away, because, again, that gets this tension in your body. Can I be OK? When I worked in finance, I made a lot of money. Now that I’m on my own, I make less money. I’m not a worse person. I just make different choices. And the happiness has never come from the money directly….Just like finding your true meaning, your true why, your true purpose. So I’d say you need to take care of yourself. You’re not a burden to others, and you can absolutely be generous and share with others and contribute to your kids’ college funds and still take care of yourself.
Maryann: This is a topic that comes up all the time among my friends with college-aged kids. It’s hard for them. It’s hard for these kids. College is so expensive, especially if they decide on a private school, and making your way in the world today, like trying to buy a house, is harder. So I think our inclination is to help our kids whenever we can. But you’re right. You have to have that balance between helping and being generous and making sure that you’ll be secure in your retirement and that your kids won’t have to foot the bill for your long-term care. Because that’s the big thing.
Iris: That’s the big thing. And I think that’s where communication is so important to share with them. You know, here’s what I can do. And, you know, if you are, four years in college, that looks different than if, you know, you. It took you longer, and all of a sudden it’s five or six years or graduate school, right. Like, be open, talk to them about priorities. And you can take the summer off and travel, or you can work. And both have. Both are valuable. I’m not saying one is better than the other, but that’s where the communication comes in, right?
Maryann: Do you have any other tips for women who want to be more financially savvy so they can live their best midlife and beyond?
Iris: I would say for those who have their head in the sand, dig yourself out. Come talk. There is nothing to be ashamed of. Money is not rocket science. It’s actually relatively easy to understand. Ask the questions. There’s no stupid question, there’s no term that can’t be broken down. And something everybody can understand. Like, if I know my stuff, I should be able to explain it to a six year old, right? So I should be able to explain it. Ask the questions, get your head out of the sand and know that your happiness in your retirement and your last third of your life is not directly related or, correlated to how much you have. But you need to know what you have. You need to know and understand what you have and what are the implications of that.
Maryann: Right. I love that. You know, years ago, I bought my son a book. He was curious about money and asking all these questions. And I bought him this little book [with] illustrations; it was a child’s guide to understanding money. And it was broken down so beautifully that I read it because it helped me understand in layman’s terms, all this stuff. So I would not, you know, consider that beneath me to get a book like that, a children’s book, if I had to learn something.
Iris: And there are so many things because we don’t ask the questions, we make mistakes. I had a friend inherit some money and because she did not ask questions, she actually suffered a big loss in her portfolio…So I would say really ask…We ask our doctors questions because [they have the medical] expertise. We ask a tech person how to fix the wifi. Whatever it is, we ask for help. Why not [ask for help regarding] money? There’s nothing to be ashamed of. You know, the only thing I don’t want people to do is keep their head in the sand and wait. Ask the questions. Ask multiple times. Even if you asked last week, ask again. So that you understand the implications and the choices.
Maryann: And I will say, stuff happens. Unexpected stuff does happen. From experience I can say that. So you need to know what’s going on.
Iris: Yeah. And even if you have your partner, you need to know too. You wouldn’t leave your health decisions in someone else’s hands. Don’t leave your financial health to somebody else.
Maryann: Do not leave your financial health to someone else.
Iris Krause: Yep.
Maryann: On that note, tell us where we can find you online.
Iris Krause: My website is Myfinancialtherapists.com. While I mostly work with women, I will not decline talking to men. Men can have questions too.
Maryann: Guys, she’s not going to turn you away. Iris, thank you so much for joining us today. It was a pleasure talking with you.
Iris Krause: Thank you, Maryann. So good to see you. Take good care.
Thank you so much for tuning in to More Beautiful. Please visit Morebeautifulproject.com for show notes and bonus content. And it would mean so much if you could subscribe, rate, and review on Apple Podcasts or wherever you’re listening. Together, let’s continue to change the conversation around aging.
