ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, March 24, 1996 TAG: 9603220042
SECTION: BUSINESS PAGE: G-5 EDITION: METRO
SOURCE: ROSEMARY LAVAN NEW YORK DAILY NEWS
It's a fact. In every country around the globe, women make less than men. In the United States, women earn just 75 cents for every $1 men collect.
Because of this gender wage gap, because more women are heading up households than ever before and because they live longer, women have special financial needs.
Two women, Cheryl Broussard and Esther Berger, have tapped into the difficulties and inequities women face and have written books to help them manage their money. Cheryl Broussard starts by noting that black women earn less than white women. And many more black women head up households than white women.
So, there are special strains on the pocketbooks of black women, says Broussard, a California-based investment adviser and author of ``The Black Women's Guide to Financial Independence.''
The median income for black women working full-time was 90 percent of that of white women in 1990 and 64 percent of that of white men. The number of black households headed by women more than doubled from 1950 to 1990, from 18 percent to 46 percent, according to census statistics. Broussard says black children in female-headed households are five times more likely to live in poverty than other black children.
Broussard, who is black, says there has never been a time when there was a greater need for black women to get control of their finances.
She says black women generally spend too much and save too little. While this may sound like a familiar problem for most people, Broussard says for black women it's worse.
Indeed, market research by a number of companies supports Broussard's contention. Black women spend more money than their white counterparts on a range of consumer items, including clothing, travel, gifts and health and beauty products.
For example, blacks spend $107 a month on women's apparel and accessories, compared with $76 by whites and $81 for the population, according to Spiegel, a mail-order retailer. And black consumers spend $500 per year, or three times as much per capita, on beauty products as the general population, according to a survey conducted by Revlon, a cosmetics maker.
``We spend more to boost our self-esteem,'' Broussard says. ``We have the lowest savings rate of any population group. White women have just a slightly better idea about money matters.''
Ken Smikle, publisher of Target Market News, a Chicago-based newsletter that tracks the spending habits of African-Americans, says blacks feel ``they are coming from behind and are more likely to measure progress in terms of consumer spending.''
Smikle says women have a big financial disadvantage - they do not receive the financial education men do.
``Little girls - whether they are black or white - are not taught basic financial concepts,'' Smikle says. ``We still teach boys more about business.''
Broussard says too many times it takes a financial crisis - a divorce, a lost job or a debilitating illness - to change spending and saving habits.
``It doesn't require great skill or fantastic luck to become financially solid,'' Broussard says. ``But it does require discipline, planning and basic knowledge.''
What follows is some of the advice that Broussard offers black women struggling for financial independence. But almost all of her suggestions are valid for anyone.
A good first step is to write down your financial goals. These goals should provide ``a sense of direction, and stop the need for instant gratification and whim spending.''
Establish a savings habit. Have a set amount deducted from each paycheck and deposited into an investment account, Broussard recommends.
Create a budget and keep track of spending. Make sure you keep good financial records .
``It is really hard when you are on your own and you are not bringing in a lot of money,'' Broussard says. ``But you must track your money.''
Plan and save for your retirement. You don't need a lot of money to open up an IRA or a 401(k) plan at work.
Focus on accumulating assets that will generate income and appreciate, like mutual funds, bonds and stocks.
Limit spending on consumer assets that depreciate over time. -You may want to consider joining or forming an investment club with other women.
Own your own home. ``It's still the American dream,'' Broussard says.
``Too many people tell me they'll never qualify for a mortgage,'' she says. ``There are lots of programs for first-time buyers.''
Get control of your credit card spending. You really only need two cards, says Broussard.
Do not let credit card debt accumulate. Pay off the debt each month, Broussard recommends. ``You should not be using your credit cards to live off,'' she says.
Make a will. And make sure you appoint a guardian to care for your kids.
Review your insurance needs and make sure you have the coverage you require. You'll need to review your life insurance, health coverage and property insurance, including homeowners and automobile.
``Insurance,'' Broussard says, ``is the least exciting but most misunderstand part of any financial plan.''
Broussard says her general rule of thumb for buying life insurance is to purchase 10 times your annual income plus an extra $100,0000 for every child. While that may seem high, black women make so much less than the population in general that the high multiple has to compensate.
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