The Money-Confidence Link for Job Seekers

A lot of people shy away from talking about money. Yet, it's an incredibly important factor throughout most of our lives. Bills and expenses are likely the main reason most of us need jobs. Creating a solid financial foundation for yourself can allow you the more choices in your career and job search.

Jean Chatzky , founder of HerMoney.com and host of the HerMoney podcast, joined LinkedIn News Editor Andrew Seaman for the latest episode of the Get Hired podcast from LinkedIn. The two discuss the link between confidence and finances, practical financial management advice, and the importance of cultivating good money habits.

A transcript of the episode can be found below. You can listen to the conversation on your favorite podcast platform by clicking here.

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TRANSCRIPT: The Money-Confidence Link for Job Seekers

Andrew Seaman: As Liza Minnelli sang in Cabaret, "Money makes the world go round." Whether you like it or not, I think that is largely true, externally and internally. When you're a job seeker, being financially secure can imbue you with confidence and some level of freedom when choosing what you want to do.

For example, can you take a pay cut to do something that brings you contentment? Can you afford to quit your current job that's making you miserable? Can you say no to an imperfect opportunity to hold out for the right job? On today's show, we're talking all about building a strong financial foundation for yourself so when you need it, you have the ability to make the choices that are best for you.

Andrew: From LinkedIn News, this is Get Hired, a podcast for the ups and downs and the ever-changing landscape of our professional lives. I'm Andrew Seaman, LinkedIn's editor-at-large for jobs and career development bringing you conversations with experts who, like me, want to see you succeed at work, at home, and everywhere in between.

Joining me today is personal finance expert, Jean Chatzky. Jean's the founder and CEO of hermoney.com, a digital media company that offers advice on budgeting, investing, and financial planning for women. You likely know Jean because she was a staple for decades on NBC's Today as its financial editor and financial ambassador for AARP. I kicked off our conversation by asking Jean how she got started in her career.

Jean Chatzky: I graduated college, wanted to work in magazines. I was a journalist, school paper, internships, the whole bag, and I got a job at a magazine called Working Woman, which doesn't exist anymore, but I was assigned to the editor covering business, and I liked it. I liked learning that numbers could be part of telling a story, and I thought businesses were fascinating. And so when I was ready to leave that first job, I went in search of a job at a big business magazine and I couldn't get hired to save my life because these big business magazines, many of which I ended up working for, thought Working Woman was a joke.

And so I freelanced for a little while, I floundered, I went to cooking school. Eventually I decided I was going to look for a job on Wall Street because I thought about what business journalists do when they write stories, and often they quote research analysts. And I thought, okay, maybe I could get hired to do that, which I did. And when I was ready to leave that job, I found it pretty easy to get hired at Forbes Magazine and was there for a little while. Then joined the startup team at SmartMoney, which was focused on personal finance rather than on business.

And while I was there, our publicist got a spot for our editor-in-chief on the early morning version of the Today Show. Our editor-in-chief did it once, and he came back complaining that they didn't have any coffee and that it was 5:30 in the morning and was not doing again, so it rotated a little while. Whoever had a story to talk about, went on. They talked about their story and eventually it was my turn and the producer took a liking to me and asked if I could come back every week, so I did and spent 25 years at the Today Show learning about and teaching other people about personal finance.

Andrew: That's fantastic.

Jean: Yeah, it was the right job at the right time. My growing up in personal finance coincided with the fact that all of a sudden everybody had a 401(k) or an IRA and needed to manage their own money for their own retirement because pensions were going away. And so all of a sudden, the world had this interest in personal finance, in markets in a way that it hadn't before, and I was able to have a ringside seat for that.

Andrew: That's fantastic, and you make such a good point is that a lot of the things that many people entering the workforce over the past 20 years, like you said, IRAs, 401(k)s, even credit scores, they are relatively new inventions, so...

Jean: The first story I wrote as a columnist for Money Magazine was about credit scores and that there were different things that you could do to move your credit score in the right direction, that it wasn't rocket science. It was not necessarily a hundred percent in your control, but it was more in your control than perhaps you thought. And I think a lot of the world of money is that, that there are things that we can't control, that we will never be able to control. Can't control the markets, can't control interest rates, can't control inflation, but we can control, to some degree, how much we spend, how much we save, whether we are responsible when it comes to paying our bills and to a certain degree how much we earn.

Andrew: Very much so. And that leads me actually to my first question on the topic, which is we're seeing a lot of people they want to make a move in their career, but there's a lot of uncertainty. Financially, what do you think people should have just as a baseline before maybe they even consider making a switch in their career?

Jean: I don't think they need to have much before they think about making a switch in their job.

Andrew: Okay.

Jean: Let's separate it because we know that you should always be looking. In some way or another, you should always have your eyes open because you're never exactly sure where that next opportunity is going to come from, when it's going to come. You want to be in a position where you can take advantage of it if it hits you, because unfortunately, the best way to make a big salary leap is to change jobs. You're not necessarily going to get it from your current employer unless you get an offer and you go back and you ask that it is matched and you can only do that once without annoying them.

So I would say to somebody who gets an opportunity, even if they don't have a lot in savings, that if this is an earnings bump that will allow you to save more in the future, you go for that. Ideally, I'd like to see people have three to six months worth of emergency savings, but we also know that many people don't have enough. We know that there are a lot of people who are paycheck to paycheck, who are living on more than they make each month. That's a situation that needs to be turned around.

Andrew: And I assume if someone, they are living paycheck to paycheck and they don't have that savings there, whether or not they're job searching or they're just worried about layoffs or churn in the labor market, do you suggest that they do what they can to put something away? Because we often hear the words, "Pay yourself first". And I think a lot of people, they don't understand what that means. Like, oh, is that fun money? What is that?

Jean: It's taking some off the top based on the logic that if you don't see it at the bottom of your ATM receipt or when you sign onto your bank online, you won't spend it. There's a phenomenon in behavioral finance called mental accounting, and basically it means separate pools of money are more likely to be used for their separate purposes. So if you can get yourself to utilize automation, have some money swept out of your checking account or out of your paycheck via paycheck splitting and just put in a separate place, that is more likely to work.

I also think that people don't pay enough attention to where their money is going on a day-to-day basis. And if you look at how we use our money these days, it's a series of dips and clicks and swipes and taps. It's not, oh, I've got $50 in my wallet. Do I really want to break that 50? Maybe not. And so if you can get yourself to start to pay attention to your own cash flows, then you can start to take back your power and make changes about where you would rather your money goes.

Andrew: And actually, I get made fun of around here because I often carry cash with me because if I'm going about my day, it's easier for me, like you said, to do that mental accounting by saying, okay, I took out $250 from the ATM this week and went to the farmer's market, stopped, I got coffee this morning. But then I see it go down throughout the week, so I actually have that visual knowledge of, oh, this is how much I have left, or this is how much I spent.

Jean: And I think people who do that are better off in some ways. And there's research on this that basically says we are more likely to spend using credit than we are using debit, more likely to spend using debit than we are cash, and more likely to spend small bills than big bills. So if you don't want to spend, you should take hundreds out of the ATM and force yourself to break them when necessary.

Andrew: I think that's fantastic advice. And I really do believe that people who are looking to make a move in their career or their professional lives overall tend to have more confidence or a little bit more leverage when their financial house is in order. And the people you work with, I assume there's a change in their confidence between when they start and when they get a foundation of their finances in place, right?

Jean: Yeah, it's all about control. It's not about how much you have or how much you make. It's about how much control you have over how much you have or how much you make. And the degree of control you have drives your confidence, drives your level of optimism, drives your resilience. Because essentially what you are not only saying to yourself, but proving to yourself with these good financial habits is that you can do this. You are an adult, you can do it. And maybe you have to make choices that take you out of situations that you would want to be in. Maybe you're choosing that you're not going to the bachelorette on the island because it's a $2,000 weekend, or you're choosing that you're going to take the subway rather than take Ubers. You're making these choices, but you're making them, and that is proving to yourself that you are responsible.

Andrew: We'll be right back with Jean Chatzky.

Andrew: And we're back with Jean Chatzky, CEO of hermoney.com. For people who are saying, okay, I would like to start on the path to something better, and maybe a new job is part of that. Like you said, unfortunately, that is usually the only way to get a really big bump in your pay. But if they also want to just get their other finances in order, where would you suggest people start?

Jean: I think you have to start with a general assessment. What do you earn? What do you own and what do you owe? Just three basic questions, but essentially what you're doing is building yourself a personal balance sheet and a personal cash flow statement. You're looking at what's coming in and what's going out and where it's going. You're looking at the debt that you're carrying and you're looking at the assets that you are building, and you want to see over time your debts declining and your assets and your income moving in the right direction.

Andrew: Because you can't really address anything until you know where you're starting.

Jean: Exactly.

Andrew: And then once you get a handle of that and say like, okay, I have way too much debt, or my credit score for some reason is lagging even though I feel like I have everything in order, I assume there's obviously the professionals you can reach out to. There are organizations like yours. For people who say, "Okay, I need help with this," where should they turn?

Jean: You're right that there are a lot of different organizations. If you are swimming in debt, if you've got more than you can comfortably pay back, you probably want a credit counselor. And there are not-for-profit credit counselors throughout the country that have the ability to take the interest rates that you're paying on this debt, which is part of the problem, the interest rates get way into the 20% range and it's really hard to get ahead of that, not-for-profit credit counselors have the ability to lower the interest rates. They will take away your credit cards and you will pay them one payment a month, but because they can lower your interest rates to the single digits, often the very, very low single digits, they can help you reverse the cycle.

If really the problem is a little bit of overspending, a little bit of under-paying attention, you probably can do it by yourself. And that means lining up all your debts, highest interest rate to lowest interest rate, putting all your extra money toward the highest interest rate first, paying that off and then moving to the next highest interest rate and so on and so on and so on while paying minimums so that you don't get behind on anything.

Credit score, the same. It is really, it's just math. It's just a formula. Pay your bills on time. If you're not set up for automatic payments that don't make you late, you should be on automatic payments that don't make you late. And if one thing that many people don't understand is that you can pay your credit card bill as many times a month as you want to pay your credit card bill.

Credit scores go down when we overutilize our credit, which means that we are using too big a percentage of the credit that we have available to us. So if I've got a credit card with a $1,000 credit limit, at the most, I should be using $300 a month of that at the top. If I use $600, that's going to send my score down. So if I know that I need to use that capacity, either you call the credit card and say, "Could you please bump up my limit so that this doesn't happen to me," or just pay the bill a couple of times and that'll keep your score where it needs to be.

Andrew: And then I guess too, a lot of people when they start feeling more comfortable, what is the maintenance phase? Because I think a lot of times when people start feeling comfortable, then they might fall back into their old ways because they feel more comfortable. They say, oh, I have some spending money. I have that savings account I forgot about. How do you suggest people stay on the right path?

Jean: The trick is to want something more than you want that impulse purchase. And so what that argues for is regular goals. Know what you want your money to do for you. Think about, at least once a quarter, what do I actually want. Because if you want to go to Aruba and you know what that trip to Aruba is going to cost, and you are all of a sudden getting emails about all of the end of year sales, that stuff at the end of the year sale may look good, but it's not going to look as good as four days on the beach if you can keep those four days on the beach in your mind. But if you don't have anything that you want, if you haven't bothered to think about it, then it's really easy to just, oh, well, that's inexpensive and looks pretty good, and why not?

And so I think regularly setting goals is good, and big goals like buying a house, replacing a car and just pacing your way there. A lot of these things are not month to month. They're year to year and decade to decade, and so unless we revisit them, it's really, really difficult to keep ourselves out of the spending loop because we're not really wired for delayed gratification. We're wired for immediate gratification. That's just that we have lizard brains. That's how they're wired. They get rewarded for buying things. Buying things lights up your brain like chocolate and love, and it's hard to resist because the rewards feel pretty good. But if you can get yourself to the point where you want other things more, that's pretty effective.

Andrew: I want to end on the note that maybe the people who say, "Okay, I want a job because I want to buffer my finances," or something, but they get that job and they get that bigger paycheck. What do you do once you start getting more and you realize, okay, I can pay more than my minimum payment or something and maybe I can go to dinner three times a week or something? How do you prevent spending creep once you get that job that pays more and that you like?

Jean: By taking care of the savings creep first. So if you get a 20% raise, which is, it's a big raise, but a lot of times you switch jobs you're going to get a 20% bump, immediately you make sure that whatever your goals are, retirement, bump up the amount that you're putting in by 20%, bump up the amount that's going to your emergency cushion. If you've got a vacation fund, bump up the amount that's going... Make sure that you're taking care of whatever the savings goals are first, and then really as long as you're not falling into debt, the rest takes care of itself.

Andrew: I think that's really great advice. And also when you start a new job, it's the perfect time to say, "Oh, I want my direct deposit to go into my checking account, but I also want this amount going into this high-yield savings account."

Jean: Yes, high-yield being the operative word.

Andrew: Yes. I actually have a savings account at a different bank because when I log into my account, I don't want to see it.

Jean: See, you are the perfect student of behavioral finance.

Andrew: I just know myself too well. Wonderful. Well, thank you so much for joining me.

Jean: Thank you for having me.

Andrew: That was Jean Chatzky, CEO of HerMoney.com.

Before you go, we want to hear from you. Get Hired launched an audience survey to help us understand what you want to hear on this show. You can find a link to the short survey in the show notes for this episode. I'd really appreciate it if you'd fill it out.

Get Hired is a production of LinkedIn News. The show is produced by Grace Rubin and Emily Reeves. Assaf Gidron engineered our show. Tim Boland mixed our show. We get additional support from Alexandra Kuznietsova and Ali McPherson. Sarah Storm is our senior producer. Enrique Montalvo is our executive producer. Dave Pond is head of production and creative operations. Maya Pope-Chappell is director of content and audience development. Courtney Coupe is head of original programming. Dan Roth is the editor in chief of LinkedIn, and I'm Andrew Seaman. Until next time, stay well and best of luck.