Ep 520: Why Smart, Hardworking Women Are Struggling With Money Right Now And What To Do About It

Summary

HerMoney with Jean Chatzky - Ep. 520:
Why Smart, Hardworking Women Are Struggling With Money Right Now – And What To Do About It
Guest: Hannah Horvath, CFP, Personal Finance Journalist
Date: March 25, 2026

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Episode Overview

This episode explores why even high-achieving, disciplined women are feeling a disconnect between their hard work and their financial security in today’s economy. Host Jean Chatzky is joined by CFP and financial journalist Hannah Horvath, who delves into systemic causes, the emotional roots of financial behavior, and how to regain agency when the “American Dream” seems out of reach. The discussion blends compassionate, research-driven advice with relatable, real-world examples of women’s financial anxiety—and offers practical steps for navigating today’s landscape.

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Key Discussion Points & Insights

The Erosion of the American Dream (04:06–08:00)

• Systemic Change, Not Just Personal Responsibility
  • The “American Dream”—the idea that hard work leads to prosperity—has eroded gradually, not suddenly ([04:25]).
  • Hannah Horvath: “The economy has kind of shifted from one where growth reliably translated into more broad based prosperity into one where growth is increasingly accruing to a very small group of people.” ([04:58])
  • Meritocracy and Self-Blame: In America’s individualistic culture, struggles are often internalized as personal failures, though many stem from broken systems.
• Wages Stagnant, Costs Rising
  • Wages have been stagnant for decades, lagging behind the rising costs of housing, healthcare, childcare, and groceries. As a result, many feel like they’re doing everything right but still not getting ahead ([06:40]-[08:00]).
  • Productivity has soared, but workers aren’t reaping the benefits.

The “Disconnect” People Feel (08:00–13:08)

• Economic Reality vs. Headlines
  • Despite headlines about GDP growth or rising stock markets, many Americans express personal financial dissatisfaction. ([04:25], [11:16])
  • The current “jobless boom” means capital gains may be up but jobs (and wages) are not keeping pace.
• Precarity—Material and Positional
  • Two types of financial squeeze:
    • Material Precarity: Basics are slipping out of reach (food, shelter, security).
    • Positional Precarity: Earning a good salary but still feeling unable to get ahead—a phenomenon now affecting six-figure earners.
    • Jean: “A Harris poll found 64% of six figure earners now say that their income puts them in survival mode.” ([12:10])

Behavioral & Psychological Responses to Economic Anxiety

(Transition at [21:37])

Hannah identifies four ways financial stress manifests in behavior—most listeners will see themselves in at least one:

1. Revenge Spending ("Doom Spending") ([24:53])

• Definition: Impulse spending as self-soothing when future security feels unattainable.
• Cause: Present bias—valuing current relief over long-term security.
• Cycle: Temporary relief leads to guilt or shame, which drives more spending.
  • Hannah: “Shopping does give that little dopamine hit in your brain... it’s a way of your brain seeking out like, I just want to feel good, I’m so anxious, I just want to feel better.” ([25:31])

2. The Financial Freeze ([27:10])

• Definition: Avoiding action altogether—whether investing, making decisions, or even checking accounts.
• False Security: Looks responsible (not overspending), but can lead to missed opportunities and compounding losses.
  • Especially common among women socialized to be cautious or defer financial decisions.
  • Hannah: “Doing nothing is a decision. Not investing in the market... that compounds over time.” ([27:41])

3. Financial Nihilism ("The System is Rigged"/Opt-Out) ([29:33])

• Definition: Withdrawing from investing or planning, believing the system isn’t designed for you (prevalent in Gen Z, but affects women of all ages).
• Rooted in Reality: Many financial structures (retirement accounts, Social Security) reward continuous full-time employment, penalizing caregiving or career breaks—disproportionately affecting women.
  • Hannah: “There’s this feeling of like, well, this entire system was not designed for me, so what’s the point of even doing any of this?” ([30:35])

4. Over-Speculation & Risk Taking ([31:32])

• Definition: Swinging the other way—embracing day trading, crypto, gambling, seeking quick wins out of frustration.
• Social Influence: The allure of instant gains is amplified by social media and increasing access to speculation platforms.
  • Hannah: “The boundaries between legitimate finance and pure speculation have really dissolved. You can sports bet and invest in index funds in the same apps a lot of times.” ([34:27])
• Long-term Wealth-Building Still Works: Compounding is slow to take off, requiring patience—a hard sell in a culture of instant gratification ([32:50], referencing David Bach).

“Mattering”—Money and Self-Worth ([16:38]–[21:37])

• Defining Mattering: The sense your contributions are seen and valued—historically tied to paid work and earning power.
• Economic Significance: In America, self-worth is often measured through productivity and income, making financial instability also an identity crisis for many women.
  • Hannah: “For women especially, there is so much unpaid and unrecognized labor... there is tons of invisible labor that the economy absolutely depends on to run but does not recognize.” ([18:18])
• Finding Value Beyond Earnings: Rediscover “mattering” through community involvement, creative work, advocacy, or caring for others—not just through job titles or salaries.
  • Community as Financial Strategy: High-trust, connected communities help reduce individual vulnerability and build resilience.

Solutions & Agency Amidst Systemic Headwinds ([15:12], [20:19])

• Advocacy & Awareness: While personal decisions matter, broader policy shifts—especially at the local level—make the biggest impact.
• Emotional Money Management: Recognize unconscious emotional drivers of spending. Bring intentionality to decisions—pause before purchases, reflect on what brings true fulfillment.
• Redefining Success: Shift “mattering” from earning to broader ways of contributing and connecting.
• Practical Steps:
  • Build community (resource-sharing, mutual support).
  • Acknowledge emotions driving money behavior instead of blaming oneself.
  • Set boundaries around exposure to financial “success” stories on social media to counter “aspirational” consumerism.

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Notable Quotes & Memorable Moments

• “A lot of your money problems are not your fault, but they are yours to navigate.” — Hannah Horvath (read by Jean, [03:12])
• “Most of us are operating in a system designed to exploit your psychology, surrounded by social forces that trigger comparison while carrying unconscious beliefs about money we didn't choose.” — Hannah Horvath ([03:20])
• “I think for a lot of people, every financial decision feels so catastrophic to them. So it's like, instead of making a decision, I'm gonna do nothing. Which of course in and of itself is a decision.” — Hannah Horvath ([27:35])
• “If you think about financial wellness as a stool, and you take away the stability and security leg, you can’t sit on it.” — Jean Chatzky ([13:10])
• “The solution is to expand the definition of mattering back outwards... Recognizing where you're already mattering in ways the economy is not measuring.” — Hannah Horvath ([20:19])
• “The boundaries between legitimate finance and speculation have really dissolved... These products are really designed to take advantage of our biases.” — Hannah Horvath ([34:27])
• “You have more access to financial advice than ever before... and yet people feel like they’re struggling with their money.” — Hannah Horvath ([35:19])

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Timestamps for Important Segments

• 04:06 – The American Dream’s slow erosion
• 06:40 – How wages stopped tracking with productivity
• 11:16 – “Jobless boom,” current economic climate
• 12:10 – Two types of precarity; six-figure earners in survival mode
• 16:38 – “Mattering” and economic self-worth
• 21:37 – Four behavioral responses to financial anxiety
• 24:53 – Doom spending/revenge spending
• 27:10 – The financial freeze/avoidance
• 29:33 – System is rigged/financial nihilism
• 31:32 – Taking big risks/speculation
• 34:27 – Dangers of blurring investment with gambling
• 35:17 – Hannah’s approach: Why emotional money management matters

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Takeaways for Listeners

• Struggling financially is often not just a matter of personal failure, but a product of a system that’s no longer functioning as promised—especially for women.
• Emotional responses to financial stress are natural and pervasive; recognizing your patterns is the first step to reclaiming agency.
• Community—both social and financial—can be your greatest asset.
• Redefining “mattering” outside the realm of income and job titles is key, especially during life transitions.
• Advocacy for systemic change pairs best with mindful, emotionally-aware money management.

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For more on Hannah Horvath’s work:
Subscribe to Your Brain on Money.

For peer support and practical investing together:
Check out Jean's Investing Fix club for women (link in show notes).

Transcript

[A]

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[C]

Hey everyone. Welcome to Her Money. I'm Jean Chatky. There is this feeling that a lot of women are having right now, and it's kind of hard to name. It's not exactly anxiety and it's not exactly anger. It's more like confusion. Like you looked up one day and you realized that the math just stopped mathing. You are earning more than you ever have. You're doing the things you were told to do. And yet paying down the mortgage or buying a house at all feels further away than it did five years ago. The number that we think that we might need in order to retire someday somewhat comfortably, keeps growing. Right now, according to the latest in many, many surveys, it seems sitting at a little over 2 million, which is a ouch of a number. Not to mention that a grocery run now costs what a car payment used to. And in the middle of all that, you might be doing things with your money that don't quite make Sense, at least to you. You're spending freely on things that you don't really need. Or you're doing the opposite, holding really tight so you're not making any financial moves at all. Or maybe you're one of those people who's decided that the whole system is R and you have checked out of traditional financial advice entirely. Or you went the other way and you're taking bigger risks than you ever thought you would because slow and steady just doesn't feel like it's going anywhere. My guest today says that none of those responses are irrational. I agree. In fact, she can tell you exactly where each one is coming from. Before I introduce her, I want to read you something that she wrote because I think that it sets up everything that we're gonna talk about. She writes, a lot of your money problems are not your fault, but they are yours to navigate. Most of us are operating in a system designed to exploit your psychology, surrounded by social forces that trigger comparison while carrying unconscious beliefs about money we didn't choose. That's Hannah Horvath. She is a cfp, a personal finance journalist, and the writer behind the substack your on money, which I promise you will be subscribing to by the end of this episode. Hannah, welcome to her money.

[B]

Hey, Jean. I'm happy to be here.

[C]

So let's start with the promise of the American dream. I mean, in many ways, it's the center of this problem. It is the center of American life. You work hard, you contribute, you get rewarded, and you are arguing that it no longer holds. When did it break?

[B]

Yeah, I would say a reason why, you know, a lot of people are feeling this way is that it didn't break all at once. It very much eroded. And I think just in the past couple years, people are speaking out more about it and it's becoming more visible. But I think it has been kind of this slow erosion over maybe the past decade. You know, if you think about wages stagnating compared to the cost of what I call like the non negotiables like housing and healthcare and childcare and groceries, you know, a lot of those kept going up. And so the economy has kind of shifted from one where, you know, growth reliably translated into more broad based prosperity into one where growth is increasingly accruing to a very small group of people. And I think that's why you can get headlines like GDP is up while the average person that you talk to says, hey, I don't feel good about my financial situation. You know, I'm Struggling. And I think that gap between what the headlines are saying and how people are feeling helps feed a lot of that disconnect content. And as you said before, I mean the American dream is really at the heart of our economic life. And the way that you feel about your personal finance situation often affects how you see your economic reality and the economic reality of people around you. And because we live in a country that's fairly individualistic, the idea of the meritocracy, what happens is when you know someone's going through a financial struggle, there's a tendency to just self blame of like it's entirely your fault, you're not pulling yourself by the bootstraps enough. And so a lot of what my work is, is saying like ye, you have agency, it's important to make these good financial decisions, but you have to understand the system that you're operating in.

[C]

I want to come back to something that you, you said early in that paragraph, which is that wages have been stagnant. I don't think that people realize how long wages have been stagnant. I mean I've been giving talks for close to two decades, right? Going all the way back to 2008 and even before where wages have been just stuck and prices, particularly home prices and healthcare prices, have continued to go up. My take on this is that a lot of people don't realize how broken the system actually is. Do you agree?

[B]

Yes, completely. And I think you can, you can look at it as, you know, for many decades a lot of economic growth was built around labor. So as the economy grew, wages would typically go up. And we've started to see labor become decoupled from economic growth. And instead a lot of our current economy is built around capital instead of labor itself. And so that explains why in part that wages haven't gone up. And also a chart I love referring back to, and I invite everybody to look it up, is look how much productivity has grown in relation to wages, where productivity is going up and up and up and wages are not matching that. So people are working more than ever, they're more productive than ever, but their wages are not keeping up with that. And I think that explains again that disconnect that people are feeling where it's like, I feel like I'm doing everything right and I just cannot get an edge in the market. And on top of that, you know, inflation, I know, you know, you'll see the headlines of that top inflation number, but that is just what everything is. That doesn't talk about, you know, like different industries and different sectors and different products. And so inflation is very uneven and a lot of the highest inflations has been in these like non negotiables things that you just cannot go without. We all have to eat if we get sick, we all need health care and so a lot of times people more viscerally see the price of go up of things they just can't not pay for. And I think that also drives a lot of this feeling.

[C]

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[B]

Yeah, I think it's very much a kind of rewiring of the economy away from the work that people are doing. I've seen a couple headlines where economists are calling this kind of like a jobless boom, where the stock market, I mean, obviously there's been tons of fluctuations in the past couple weeks or so, but in the past year, let's say the stock market has more or less continued to rise, but the job market has been quite frozen for maybe about a year now where it's kind of this like low hire, low fire that we're now getting layoffs. And I think we're seeing this economy where a lot of the economic growth that we're seeing is very much disproportionately going to capital, to shareholders, to businesses, and not to the workers, or a lot of these businesses aren't even employing workers at all. Their algorithms, their platforms. And so you know what happens then when kind of the rewards of today's economy are not going to people. And I think you very much see that in the current headlines.

[C]

I want to dig with one more question into the problem and then we're going to get to some solutions for people. You published a piece that I think is going to resonate very, very deeply with our listeners, maybe uncomfortably so. Just a warning. You write about two different kinds of squeezes happening right now. Material precarity, which is where the basics are genuinely slipping away, and positional precarity, which is where you make good money and it's somehow not enough. A Harris poll found 64% of six figure earners now say that their income puts them in survival mode. And I gotta say, I've spent my last week with a lot of people in their young 30s who make good money. And that's exactly what is going on for them. What's it gonna take for us to spin out of this problem?

[B]

Yeah, well, first I'll just say that I think this is one of the biggest behavioral challenges when it comes to personal finance in our current economy, where we have an economy that's becoming increasingly stratified. If you think of the idea of the K shaped economy where like the top X percent is going up and the bottom is kind of continuing to go down and kind of in that middle, as I wrote about, it's kind of hollowing out. And you'll get a group of people who again, genuinely cannot afford the basics. And then you'll get people that can't afford the basics, but they thought their money would stretch much farther. Or it's really a psychological state where you said, you know, I'm making this really good money and I thought I would be at this place, I thought I'd be able to afford these things and I can't. And that, as you said, is positional precarity. And a lot of the solution really does obviously come at the policy level and just recognizing that this type of wealth stratification is an issue. And you know what happens when we continue to design an economy that isn't, that doesn't need groups of people or doesn't need the labor of groups of people? I mean, what does that look like? And I also think a lot of people's negative feelings and frustration with the economy is driving perverse individual behaviors. Like you said, people are kind of giving up and stuff like that. And so there is a little bit of individual things you can do. But I do think on the broader level, that's where a lot of the big change needs to happen.

[C]

Well, that's my next question. What do you think we do? Because honestly, I've been following very, very much the same playbook for my 35 year career. You make a decent living, you spend less than you make, you save what you're not spending, you invest it, it goes up, you've got a financial life. And for a lot of that time when people were overspending, I could sort of look at a budget and say, you, you, you, you, you. This is not a you problem. Right. I feel kind of bad giving that advice these days because it's not, it's not helpful. So how do people maneuver?

[B]

Yeah, so I mean, of course I think part of it is understanding specifically like what policies can help or hurt and especially the local level, which often has a very big impact on your day to day life and advocating for those policies. But also, you know, there is this whole other aspect too, which is we're in a very consumerist economy right now. And a lot of that is driven by aspiration. Aspiration is the engine of consumer culture. It wants you to be in a place of lack in order to spend money because if you feel discontent, you're more likely to spend. So understanding that, that actually Gives you a lot of agency and understanding. Like, okay, this entire world is designed to make me feel bad about myself. So I go buy this thing. And how can I individually get to a place where I feel like I have enough or what actually is bringing me joy in my budget? And so much of my work is talking about how so many of our financial decisions are emotionally. I would say a majority are emotionally driven, are unconscious, and just bring a little bit more awareness into what's influencing you and why you're making the money decisions you're making can have a world of difference in the financial decisions you're making. And I'm saying, I will just say too, like, if you're living paycheck to paycheck, you can't afford groceries. That's kind of a different conversation. But for somebody that is in that, like Henry, high earner, not rich yet, it is worth exploring, you know, where your money's really going and what's going through your mind when you're making those decisions.

[C]

Let's shift gears a little bit and get a little personal. You write about this concept called mattering. And I want to spend some time here because for a lot of my listeners, for women in midlife, maybe even beyond, this is not theoretical. Your kids leave, your role at work shifts, the culture stops reflecting you back to yourself. There's this question that arises of whether you still matter, whether your contribution still counts. It becomes very real. How do you do define mattering? And why is it an economic concept and not just a psychological one?

[B]

Yeah, so as you said, you know, mattering is the sense that you count, that your contributions are seen, and that could be your contributions to your family, that could be your contributions to your community, but it's that you are making a difference somehow. And I think it's very rooted in the human search for meaning and purpose in life and all of that. And it's deeply economic because, one, a lot of us need money in order to do things. And so money often drives a lot of that, of that, you know, mattering. But also too, you know, especially in America, we have really coupled mattering to work and earning power, for better or for worse, like how much you make, what your title is, how productive you are. Those have been, like, the primary metrics that a lot of people use to measure their own significance. And it's a lot easier to benchmark your income against someone else's income than benchmark, am I good, daughter? That's a lot harder to measure. And so that is not an accident, you know, Our economy needs people to want to work harder, to consume more, and to tie their identity to work. And for women especially, there is so much unpaid and unrecognized labor for women, you know, especially if you have children, even if you don't have children, there is tons of invisible labor that the economy absolutely depends on to run but does not recognize. So as women, we're already balancing this, you know, difficult relationship between, like, how our work contributes to this higher thing. And then you add in a current economy that's moving away from labor, and you get, honestly, an identity crisis. And as I say, you know, you take something like losing your job or something like that, and it feels like a pure financial event. And it is, but it's also an identity event. When so much of your identity is wrapped up in your work, and. And for whatever reason, you shift away from that, it is destabilizing, and it can be a very painful and frustrating experience. And I think recognizing that and also what happens on a larger level when people lose that sense of mattering, their financial behavior changes. Maybe they stop engaging with their money altogether. They're like, what's the point of saving for anything? Or they try to recapture that feeling of significance in some other way, and maybe that's through spending money. And so that idea of mattering really does show up in almost everybody's financial decisions.

[C]

When we undergo a life shift, how do we recapture that feeling of mattering without going off the financial deep end in either way? I mean, I, as you were talking, was thinking this totally applies to retirement. Right. If somebody retires from a long career where they have felt like their identity is truly wrapped up in what they do, you can lose that feeling of mattering. It's can be sort of swept out from under you. But if you want to control the narrative, what are the best ways for individuals to continue to feel like they matter so that they don't mess up this financial bedrock that they've built?

[B]

Yeah. So I think the big thing to understand is that we have narrowed the definition of mattering to earning power, and the solution is to expand that definition back outwards. So practically, that kind of means recognizing where you're already mattering in maybe ways the economy is not measuring. So a great example is like community investment. You know, maybe it's showing up for other people in the community, building mutual support, just being a part of your community. And that creates very real value for yourself, your identity in your community, and for the other people around you. The same with things like creative work or volunteering or advocacy. These are all forms of contribution that maybe don't create pure market value by themselves, but have a very clear, tangible benefit. It can also just make you feel good and make you feel important and mattered in your community and in your family. And also, I'll just add that community in and of itself is a financially resilient strategy. The stronger a community is, the higher trust a community is, the less expensive it is. Low trust communities are very expensive. And so building a strong community, like splitting costs, sharing resources, all of the ways you can meet your own financial needs through your community, the less vulnerable you are to these broader external economic factors. And so I think that's super important to point out.

[C]

Hugely important. We're going to take a short break. When we come back, we're going to get into the part of this conversation that I think is going to feel helpful and also really personal. Hannah has identified four very specific ways economic anxiety shows up in how we handle our money. I am willing to bet that you will all recognize yourselves in at least one of them Back in a sec Tax season is funny. It's one of the only times all year when we actually look at our full picture. What we earned, what we spent, what we saved, and sometimes what we wish we'd done differently. But instead of just looking backward, I want to use this moment to move forward. Simplify your finances with Monarch Monarch is the all in one personal finance tool designed to make your life easier. It brings your entire financial life, budgeting, accounts and investments, net worth and future planning all together in one dashboard on your phone or your laptop. Feel aware and in in control of your finances this tax season and get 50% off your Monarch subscription with Code Hermoney. Achieve your financial goals for good with Monarch, the All in one tool that makes money management simple. Use code [e-mail] for half off your first year. That's 50% [e-mail] code hermoney the year is moving fast and somehow there is still no extra time to cook. These are the weeks when I'm focused on work workouts and trying to eat well and I just don't want dinner to become another project. That's where factor has been so helpful. I recently tried the Ginger Teriyaki salmon and the Thai Roasted Vegetable Green curry and what I love is that they're fully prepared, dietitian, designated and genuinely satisfying. There are a hundred rotating meals and every week including high protein, calorie, smart, Mediterranean and more. I use this and you should too. Head to FactorMeals.com HerMoney50OFF and use code HERMONEY50OFF to get 50% off and free breakfast for a year. Eat like a pro this month with Factor New subscribers only. Varies by plan. One free breakfast item per box for one year while subscription is active. We are back with Hannah Horvath, cfp author of the Brain on Money. So Hannah, before the break we were talking about what happens when the economy stops delivering on its promise, what happens psychologically. And you've identified four specific ways that it shows up and how people handle money. I wanna go through all of them, cause I think that people are gonna see themselves in at least one. Let's start with revenge spending. Some people call it doom spending. What is it and where does it come from?

[B]

Yeah, so doom spending is a reaction to financial anxiety, which a lot of people are feeling right now. And what happens is your brain is in problem solving mode a lot of the time. And so when there are lots of things happening around you and you're feeling anxious, you want to solve the problem, you don't want to feel anxious anymore. And so when all these things are happening around you that are out of your control, you're going to try to do what you can do to quote, unquote, control the situation, even if it's not really controlling it at all. But your brain is just looking for an action to self soothe itself, to say, like, okay, I did this thing, I'm not anxious anymore. And so I think a lot of people do that through these like, temporary relief activities. And doom spending or revenge spending is a huge part of that. And that's essentially like, okay, I'm going to just buy this thing to make myself feel better in the moment because I know I will never be able to afford a house, but I can't afford this new bag or new pair of shoes or whatever that thing is. And you know, shopping does give that little dopamine hit in your brain. So, you know, again, it's a way of your brain seeking out like, I just want to feel good, I'm so anxious, I just want to feel better. And so that's why I think a lot of people resort to these things where it's like, well, I'm never going to be able to build this financial foundation, so why don't I just, you know, make myself feel better right now? And in behavioral economics, it's known as, you know, present bias. We're way more likely to care about our own present needs than this fake future Hannah that, you know, she'll figure it out. I care about present Hannah right now. And of course, the trap of all this is that that relief that dopamine hit that you feel is very short lived. And it often ends up in shame or guilt, you know, even bigger anxiety. And then it creates this flywheel where you're like, oh, I'm anxious again. And then you kind of go back to that thing that made you feel good for a second before. And then the flywheel continues.

[C]

Right. Which is why the 24 hour pause, or the 72 hour pause, or whatever kind of a pause you want to impose on yourself can be. So if you can get yourself out of that loop long enough to realize that the thing is not gonna solve the problem, sometimes you can avoid spending the money. The opposite response is the financial freeze. I actually think that's harder to spot and harder maybe to talk about because on the surface it looks like you are being responsible. You're not overspending, you're being careful. But there's a version of this where it goes too far. How do you see it?

[B]

Yeah. So like you said, it's the kind of opposite of the revenge spending where, you know, you're just so overwhelmed, you have so much anxiety that you just kind of freeze. Like you, maybe you don't invest because you're afraid of picking the wrong thing, or you don't make the move or take the potential risk or even like look at your bank accounts. I mean, financial avoidance is kind of a form of this because engaging with that means confronting how precarious things might be feeling. And this is like a very well documented psychological response. Right? Like the fight or flight into freeze. Right. And it's the exact same thing with money. And so I think for a lot of people, every financial decision feels so catastrophic to them. So it's like, instead of making a decision, I'm gonna do nothing. Which of course in and of itself is a decision. Doing nothing is a decision. And while I think, yeah, not spending money or spending money on, you know, things you don't need or bring you joy, yeah, that's a smart financial decision. But doing nothing can have a cost. You know, if you're not investing in the market or you're deferring certain financial decisions, you know, that compounds over time. And it I kind of describe as like a slow le where a lot of times you don't always realize just how much you could be missing out on potential investment gains and things like that. And I actually think that this is something that is common with women because I Think women are quite socialized to be more cautious with money or to defer to the experts. You think about like the permission trap, where I think a lot of women feel like they don't have the confidence or knowledge to make financial decisions on their own, which by the way, we absolutely do. And I think the freeze is a result of not trusting your financial instincts.

[C]

Yeah. Or feeling like you have to wait to have all of the information before you can act. And this is one of those worlds where we'll never have all of the information. So you have to get yourself to a point where you can act ahead of it, where having a decent amount of information is enough. The third is what you call the system is rigged, opt out or financial nihilism. One third of Gen Z say that they believe they'll never own a home. Only 36% have any investments at all. Now most of my listeners are a little bit older than this, but I do wonder if there is a version of this that shows up in women in midlife too. This conviction that the game was really never set up for us. Do you see this and how does this one present?

[B]

Yeah, definitely. Essentially I think it is framed often as a younger generation phenomenon because that's the economic context that a lot of Gen Z is operating in. But it's really this idea of, you know, the game feels rigged. So either why don't I just not play the game or why don't I try to cheat the game? And I think you see the kind of cheating aspect with a lot of young people where you see a lot of young people engaging in things like day trading or prediction markets or sports betting. It's this belief of like the traditional ways of building wealth don't hold true for me. And also I'm, I'm going on social media and seeing people claiming to make millions of dollars doing these things, so why don't I go try bet at all? But I think for people later in their lives, I mean these things still apply. You know, you can still do prediction markets no matter what age you're in. But I do think that for women especially, so much of our current economic environment is built around these assumptions of like you're going to have continuous full time employment, which some women might not, if they are having children or for whatever reason taking a break from the workforce. And also, you know, even though more women than ever before are working in the workforce, a lot of our economic model is built on this breadwinner model. This idea that the women are leading the home or doing A lot of unpaid labor. So if you think about like certain financial structures like retirement account, Social Security, it rewards a pattern of economic participation that often will exclude or penalizes caregiving or part time work or career interruptions or unpaid labor, all of which are disproportionately used by women. And I think. So there's this feeling of like, well, this entire system was not designed for me, so what's the point of even doing any of this? And I think it's a very tantalizing idea or, and I completely sympathize and understand why people feel that way. But unfortunately it's the same kind of result of the freeze where when you're avoiding, when you're not participating, you are missing out on market gains or on taking that risk that could potentially help you down the road.

[C]

Right. And then that brings us to the last one on your list, which is kind of the flip side, right? Speculation, crypto, prediction markets, taking bigger swings than you normally would. And you wrote, it's hard to fault people for wanting to get rich quick if they've lost faith in their ability to get rich slow. It is so true. But how do you talk to somebody who's in that place and get them to realize that getting rich slow can still work? I keep in my head, coming back to this conversation that I had with David Bach, who is a personal finance writer, been a friend of mine for decades, who pointed out something that I had never realized, which is that compounding, though magical, it doesn't happen fast right away, it's really slow in the beginning. It's like the penny question. Would you rather have a penny that doubles every single day or a million dollars? And very quickly the penny outdoes the million dollars. But you gotta get down the road before the doubling and the compounding and starts to look significant. And that takes patience and it takes the ability to wait, which a lot of people just don't have.

[B]

Yeah. And it goes back to that idea of present bias. Right. The Hannah 30 years from now, I don't know what her deal is, I don't know what she wants. I'm focused on my needs right now. I think that's just a natural cognitive bias that a lot of us have. And on top of this too, there's a lot of social influences that make people believe that instant gratification is the only way. I mean, we're in a very instant gratification culture. And again, people are going, you're going on social media, you're seeing people in their 20s, you know, saying that they're making millions of dollars. And that type of wealth building is a lot more normalized, I think, on social media and kind of in our society. So it's kind of this idea of like, well, I want to get rich now. And when you have this all these, like, economic precarity around you and all these forces around you, you know, again, it's like, I want this financial protection now. I'm like, ready for it now. And, you know, when people feel like they're struggling, if you're, you know, drowning in the ocean, you're going to grab the first thing around you. And I think for a lot of people, they feel like the life raft is these kind of casino like behaviors and gambling like behaviors. And I'll also just add the boundaries between legitimate finance and pure speculation have really dissolved. I mean, you can sports bet and invest in index funds in the same apps a lot of times. And so these products are really designed to take advantage of a lot of our biases and really remove the barrier to entry for a lot of this stuff. So, you know, when traditional wealth building feels inaccessible, that like, just bet it all play feels a lot more rational. And so when I try to, you know, give somebody advice in this place, I definitely don't moralize at them. Right. And I think everybody conceptually understands how compound interest works, but that doesn't necessarily mean they're going to follow it. I mean, you can give somebody all the facts, it doesn't mean they're going to follow it. So it's something I try to do is really trying to legitimize their frustrations, but then also really trying to point out the risks of like, yeah, okay, fine, you could make a million dollars on this bet, but there's this percent chance of getting that. And then what happens when you lose all your money? And then if you compare that to the risks of building wealth slowly over time and really helping people understand that these behaviors are very emotionally based. And so understanding your emotions and what's going through your head when you're making these decisions, I think can be very helpful for slowing down and making smarter decisions.

[C]

Hannah, I've met a lot of CFPs. As you can imagine, you're different. And I mean that in a good way. How did you get here?

[B]

Yeah, so I started off as a financial journalist and then became a cfp. And over the course of my career, I just felt like a lot of financial advice is regurgitating a lot of the same information. And on top of that, I felt like, you have more access to financial advice than ever before, whether you're getting it online, on social media, you know, wherever. And yet people feel like they're struggling with their money. And so that's when I really started to get into the behavioral side of things and really understand that again, so many of our financial decisions are emotional and unconscious and also very much rooted in our sense of self. Our money is very tied up in our identity. And, you know, so I started writing more about that internal experience and then started to realize, you know, we can't write about that or I don't feel like I can write about that until I also recognize all these external forces that have big influence on how we think about money and ourselves and the world around us. And that's what drives a lot of my work, is understanding the world around us and then also doing a better job to understand ourselves and our money.

[C]

Well, your work is excellent. The sub stack is terrific. It's. It's called you'd brain on money. Hannah Horvath, thank you so much for coming and spending some time with us. I hope you'll come back.

[B]

Yes, I would love to. And I had such a great time. Thanks, Jean.

[C]

Sure. And before we go, if you love today's episode, please take a moment to leave us a five star review on Apple podcast. Your feedback means the world to me, but it also helps other women find the show. And if you're ready to to grow your investing skills and make smarter decisions with your money, come join Investing Fix, our twice monthly women only investing club. Expert stock pickers bring ideas to the table and together we help build a portfolio. Since launching four years ago, we've built a strong track record and more importantly, a community of women who are learning and winning together. Tap the link in the show notes to check out Investing Fix today. Your first two classes are always free. Her money is produced by Hayley Pascalides and our music is provided by video helper. Thanks for listening and we'll talk soon.

[A]

Hey, I'm Seth Schachner. Check out my new show, Breaking down the Biz. Every week I sit down with people who actually make movies, music and media happen. Executives from Sony, Universal, Apple, NBC. Together we cut through industry jargon and hype to show you how the business is built, what's key to making everything come together, and why it matters to you. From itunes impact on the music industry to the advent of AI from the Taylor Swift ticket sales fiasco to Bad Bunny's meteoric rise, we break down the stories, the numbers and the negotiations that shape the industry. I've been in the trenches of the entertainment industry for several decades, with leadership roles at companies like Sony, Paramount and Jive Records. My guests and I are going to provide the same thoughtful, concise insights that I'm trusted to bring on TV networks like CNN and NBC surrounding the industry and its culture. Defining Moments we'll touch on the business of music, filmmaking and streaming and the emerging technology of our time. If you've ever wondered what really happens behind the scenes of the entertainment business, this is a box bite size insider guide. Subscribe now on your favorite podcast platform or watch us on YouTube so you never miss a beat. Let's make sense of this industry together.