Making Money Work: Planning for Unexpected Financial Challenges

By Mieke H. Bomann

In response to alumnae requests, the Quarterly published a series of articles in 2006 on making your money work harder. In this installment, we consider the financial situations of three hardworking alumnae, Sue Hershner Chehrenegar ’73, Suzanne Lufkin Weiss ’77, and Maria-Stella Fountoulakis ’99, and offer the insights of a fourth, financial adviser Beth Fisher Cutler ’82 (pictured below). Other articles in this series addressed financial basics, balancing saving and spending, overcoming debt.

Life is beautiful and complicated and expensive. Few journey through it without experiencing some sort of financial challenge, but many of us are ill prepared to handle it.

Sue Hershner Chehrenegar ’73 wishes someone had suggested an emergency savings account to her a long time ago. In 2003, the unexpected side effects of a chronic medical condition forced her into early retirement after a successful career in biomedical research. Fortunately, her husband could pick up some of the slack, but Chehrenegar, now a freelance writer, has taken a considerable cut in pay.

“I was made to believe that I would just be working and tried to live my life as normal,” she explains. “Nobody suggested I should have money saved if I had to retire [early].”

The unexpected financial challenges of illness, losing a job, or getting divorced are by no means unusual, says Beth Fisher Cutler ’82, a financial adviser with UBS Financial Services in Greenwich, Connecticut. The only way to withstand them, she adds, is to have a plan. Step one is stashing away enough readily available cash to live—without an income—for at least three months.
 
Suzanne Lufkin Weiss ’77 wishes she had reached out to a financial planner years ago during her divorce. Currently a real-estate broker in Bath, Maine, she would love to get her teaching credential but is raising three teenagers. Taking time off to go back to school seems financially impossible to her.

“Not too many part-time careers favor single mothers,” Cutler agrees. The best plan for Weiss, she says, may be to finish a master’s in arts administration that she’s put on hold, and then see if she can find work for a large organization that will offer her a retirement and healthcare package.

“What this is all about is life planning,” says Cutler. “People should be thinking about it with some regularity, and keeping in mind the worst-case scenario regardless of how much they’re making and how well life is going.”

Financial advisers can help you create a financial plan. They work in different ways—some charge a flat fee, others a percentage of your assets—and you should interview contenders before choosing. “Ask as many questions as you want,” she says. And be sure to check the financial health of the outfit you’ve selected. You want it to be around “for a long time and making wise decisions.”


Passion, Risk, and Understanding in the Financial World
Find your passion. It’s an admonition that’s tossed around regularly in these days of personal trainers, life coaches, and a resurgent stock market. Stories abound of accountants abandoning their ledgers to open scuba-diving businesses in the Antilles, and of architects closing up shop to climb the world’s highest peaks. These folks always seem to have a bundle in the bank and not a worry in the world.

But what about the rest of us, who also want to fulfill our true potential but either haven’t a clue what that might be or have been chastened by circumstance or tradition to be happy with what we’re doing because who knows what life will deliver tomorrow? The answer depends on whom you ask.

Maria Stella Fountoulakis ’99 (left) has decided that despite the considerable risks of moving from job to job until she finds what suits her best, it’s worth it. A women’s studies major at MHC, the social services worker-turned elementary school teacher-turned waitress and actress has been fine-tuning her life plan since graduation and she isn’t done yet. “I feel like this is an opportunity for me to be a self-made person,” she says of her varied professional endeavors.

Beth Fisher Cutler ’82 sympathizes with the desire to find a suitable profession but takes a more pragmatic approach overall. A financial adviser for UBS Financial Services, Cutler points out that in a world of escalating costs, it’s important to mesh passion with compensation and to find a job with a company-matched retirement plan and health insurance at the outset of a career, if possible.

“Looking at annuity and insurance timetables, women will live twenty years longer than men,” she notes. “You have to do as much planning from the beginning as possible. The first job you [take] often sets the direction for the rest of your career.”

Fountoulakis, who is considering a master’s degree in social work, is certainly aware of the importance of financial planning and eager to better understand the principles of investing. She routinely watches the progress of her shares in the Vanguard Energy mutual fund, which her parents gave her after graduation, and she has gone online to educate herself about the stock market. But she says the language of business and finance is lost on her.

That’s not unusual, says Cutler. She recommends that Fountoulakis look for in-person seminars for women on investing and financial independence. The Alumnae Association has offered several in its Back to Class program during reunion, she points out. “Women enjoy hearing other women’s questions,” which spur even more questions, Cutler adds.

Fountoulakis also needs to network, says Cutler. She should talk to everyone she knows about finding an adviser, and swap stories about sources of financial information. An excellent resource, she says, is LifeNet, the Alumnae Association’s online networking site, where graduates can connect with women who are financial professionals and/or are interested in money issues.

As for figuring out how to finance her continuing education, Cutler suggests Fountoulakis talk to an adviser about her liquidity needs, her timeline, and building a balanced portfolio.

Woman to Woman: the Feminization of Money
As a recent article in Wealth Manager magazine pointed out, women take a different approach to managing money than men do. Financial experts have learned that just as women are generally more relationship oriented than their male peers, they also favor wealth managers who check their pontification skills at the door, listen to their individual goals and timetables, and willingly translate sometimes-indecipherable “business-speak” into proper English.

Beth Fisher Cutler ’82 understands this. As a UBS Financial Services adviser, Cutler has many female clients, and her approach is educational and supportive. “I find that … males seem to be more data oriented,” she says. “Women think of money as a means to their ends. Empowering women with financial information is my goal,” she adds.

Developing trust is essential, Cutler says, as is empathy. And that takes time. “When I plan my first meeting, I allocate two hours,” she explains. “My colleagues think that’s crazy, but when I go to a doctor I don’t want to be rushed. I want to have the full-length conversation. You are planning for your life and have to sit next to somebody who has allocated enough time.”

The bottom line, Cutler says, is that wealth managers need to find out what their clients need and understand, and then speak thoughtfully to those issues.

Beth Fisher Cutler may be reached at beth.cutler@ubs.com.