Jean Chatzky's Road Map to Wealth

Jean Chatzky was a fact-checker and reporter for Forbes when she got a job offer from startup SmartMoney. She was at a crossroads. Her job at well-established Forbes was difficult to land, and she was doing well. At SmartMoney, she’d have to prove herself, and there were no guarantees. But she could do what she loved—write all the time, not fact-check for others. And telling stories about people and money was her passion.

Although a parade of people came into her office telling her not to do it, she listened to her heart and made the move. Today, as the financial advisor to millions, she thinks it’s the best career move she ever made.

Chatzky, 46, believes listening to her intuition and following her passion created opportunities and opened her mind to entrepreneurial pursuits. Now, she’s an award-winning journalist, author of seven books, financial editor of NBC’s Today show, contributing editor for More magazine, columnist for The New York Daily News and host of a daily show on Oprah Radio.

With 20 years of personal-finance experience, her philosophy is simple. “If you want to own your own life, you have to own your money,” Chatzky says. “That means, earn a decent living, spend less than you make, invest the money you don’t spend, and protect everything you have built.” She believes by taking charge of your finances, you will take charge of your life. But, like many people, she learned the hard way. “I came around to helping people manage their money as I learned about managing my own.” Early on, Chatzky spent more than she made. She blew her first opportunity for a 401(k) because she didn’t understand how it was supposed to work.

She would eventually use her first-hand knowledge to help people tackle “an epidemic with a devastating impact—overwhelming debt,” Chatzky says. “I think my skill is being able to communicate complicated information in an uncomplicated way without dumbing it down.”

Managing Your Money

She offers practical advice on how to dig out of debt and build wealth in her books, including New York Times Best-Sellers Money 911: Your Most Pressing Money Questions Answered, Your Money Emergencies Solved and Pay It Down!: From Debt to Wealth on $10 a Day.

“People are living paycheck to paycheck because they are not bothering to pay attention to what they have coming in and how much they have going out and where it is going,” Chatzky says. “It’s a lack of discipline.”

Reducing debt is essential to being in control of your money, Chatzky says. She believes everyone can find an extra $10 a day in their budgets to reduce debt, and she offers numerous ways to do it—from little decisions like skipping the popcorn at a movie to bigger ones like refinancing your car loan. She provides actionable steps for people who “need to go on a debt diet,” such as tracking spending, using a debit card as your plastic of choice, using only one credit card for emergencies, sticking to a shopping list, paying bills as they come in, managing your credit score, and visiting the ATM only once a week and dividing that cash by seven so you only carry a set amount each day of the week.

“I truly believe that we all, if we take a little more time, have the ability to be good managers of our money. It doesn’t mean we are all going to be out there day trading or buying complicated hedge funds,” Chatzky says. “There’s no magic to this; people need good habits.”

For her 2009 book, The Difference: How Anyone Can Prosper in Even the Toughest Times, Chatzky studied the habits and traits of the wealthy. She discovered that people who build wealth “tend to be more passionate about what they do. They are visionaries—able to see things in an improved way, if not a new way altogether,” she says. “They are goal setters who take risks, listen to their intuition and are always on a quest to learn something new.”

Adopting a Prosperity Mindset

Wealthy people also have three behaviors in common: “the discipline of habitual savings, investing and always having a plan,” she says. “Want to buy a house? Plan. Want to send a kid to college? Plan. Decide and plan what you are going to do, instead of defaulting into it. People who do plan, actually get where they are going.”

Other traits of the wealthy she found in her research are happiness, optimism and resilience. While happiness is about today, optimism is about having a positive outlook, and the wealthy have it. “With a positive outlook, people are more likely to pick themselves back up in tough times. Optimism is closely tied to resilience, and resilient people focus on the things they have control over.”

In other words, Chatzky says, “focus on yourself—not other people—and let other things go.” And if you aren’t a naturally resilient person, she says research shows it’s a skill you can learn by identifying what you can control, taking action to solve a problem instead of ignoring it, and emphasizing the positive.

While the wealthy are happy, they aren’t too happy. “On a happiness scale of one to 10, you want to be about an eight,” Chatzky says. “Mildly happy people are strivers, interested in making the kind of changes to get ahead. But people who are too blissed out don’t do the very important basic financial measures to take care of themselves. They don’t have emergency cushions because they don’t think there’s ever going to be an emergency.”

Taking control of your finances is about knowing when your behavior isn’t working, Chatzky says. “Changing behavior is hard and you have to be ready. If you are not quite there yet, it will help you to get ready so when you do finally pull the trigger, you will be successful.”