CONSUMERS : ‘Ms. Money Book’ Author Tells Women to Curtail Spending

Financial opportunities for women have improved in the last decade, but lawyer and financial consultant Emily Card says women must change their attitudes about spending and saving money in the ‘90s.

“They need to learn it’s OK to say no to spending money,” said Card, the author of the new “Ms. Money Book.” “The ‘90s will be a savings decade.”

Most women do not think in terms of money and power, Card and other experts believe.

“Women, for the most part, still spend money on family and food and don’t really think about making a lot of money and having power like men do,” said Esther Worthington, executive vice president of the St. Louis-based International Credit Professionals. “Women don’t focus on power the way men do. That’s why women entrepreneurs are few and far between.”

Card agreed, saying, “There are no cultural models for women. I can’t name any larger-than-life (female) figure like a Ted Turner type.”

For one thing, women usually don’t get as large a credit line as men do. “Women are smarter about credit now,” said Card, who helped draft the U.S. Equal Credit Opportunity Act of 1974. “And it’s easier for them to get credit than it was 16 years ago. But although women are the backbone of small businesses, Small Business Administration studies show that women still don’t get as large a line or as favorable of terms as men get.”

As far as personal credit goes, Worthington said: “Women’s access to credit is better (than it used to be), but the problem is they don’t get it as easily or as much as men do. Their salaries are lower or perhaps they are single mothers with a lot of obligations and not much income. They’re not going to get much credit. You have to be able to pay it back before you can get it.”

Statistics show that women earn 60 cents for every $1 that men earn, Worthington said, “but that’s changing as younger women come into the work force and are better educated and more demanding.”

Said Gerri Detweiler of the Bankcard Holders of America, a consumer education group headquartered in Herndon, Va., “Until women really reach economic equality with men, they probably will continue to have lower credit. Women earn less, and they are in occupations that don’t score as high in the credit scoring system.”

The credit scoring system used by financial institutions gives more points, Detweiler explained, say, to a doctor than a secretary.

Card, Worthington and Detweiler recommend that a woman have credit in her own name.

“Many older married women still haven’t established their own credit identity,” Detweiler said. “The card may have her own name on it, but she may not be legally liable because it is not a joint account that she had to sign for. In that case, she is an authorized user, but does not have credit in her name.” In case of a divorce or death of her husband, there can be many credit difficulties.

The 1990s are “a time for women to have credit, but not to use it to overextend themselves,” said Card, explaining that she began crusading for equal credit for women in 1970, after a bank turned down her application for a credit card, but offered one to her husband. At the time, she was teaching political science at UC Riverside; her then-husband was unemployed.

Card discusses financial situations and solutions--for single, married and divorced women--on a case-by-case basis in “The Ms. Money Book.” Half of the profits from the book go to the Ms. Foundation, which awards business grants to women and offers monetary support to women with financial problems.

In 1985, Card wrote a highly acclaimed credit primer for women, “Staying Solvent, A Comprehensive Guide to Equal Credit for Women.”

In “The Ms. Money Book,” Card urges women to cut back on their clothing expenses to save money and become more financially secure.

“Women spend five times as much money on clothes as men do,” she said. “There is a lot of pressure on women to dress well--I don’t think we have to blame women for that--but we can make do with less clothes. I think women, especially middle-class women, have fallen into a trap. They have tried to prove they have more than they do.”

Women should set a realistic savings goal, according to Card, saving from 5% to 10% of their yearly salary “depending on your income and debts.”

Another good way to save, Card advises, is to cut back on money spent on vacations. “No more than 3% to 4% of your total income should go to vacations,” she writes. “If you haven’t purchased a home, redirect vacation funds to a home down payment fund.”

Other tips from the book include the following:

* “If your clothing expenses exceed 5% of your income, shift the remainder to savings.”

* “If dining out has put your food bill at 10% of your gross income or above, cut back.”

* “Don’t ever buy a new car if you haven’t bought a home.”

* “Recheck your policy. You can save 1% to 2% of your income by eliminating unnecessary insurance.”

“Our image of rich people is that they always spend,” Card said. “But wealthy people are not afraid to say no. Middle-class (people) have to learn that.”