Oct. 13, 2010 -- Being down to one quarter of her previous income and without any savings drove Suzanne Gannon to the equivalent of Weight Watchers for your money.
Support groups have been particularly popular among women to help them shed weight, and now they are turning to them in the economic crisis to help them build money muscle. Gannon turned to The Money Honeys, a group formed in New York by about 20 women who had met at a financial literacy class.
Gannon joined the class to try and stop the precipitous slide in her financial life. A few years before the economic downturn, she left a lucrative job in corporate communications to pursue her dream of writing. She was just becoming established as a freelancer in 2008 when, as she says "everything imploded." She found herself with little work, no unemployment benefits and no savings.
"There were days I didn't eat," she says — then qualifies that with a detail of her "reckless" approach. "Occasionally, I'd go to a restaurant and go hog wild. Other days I simply didn't eat."
What she was looking for from the financial support group was, she says, "a network of people who'd listen and perhaps share ideas that could help." In addition to "tremendous emotional support," she got to hone budgeting skills learned in the class where The Money Honeys met, and learned to live on 25 percent of what she was once used to.
Best, she says, was the apartment she got from one of the group members, who was moving away from New York. Gannon wound up paying half of her old rent for twice the space -- a psychological boost, she says, that helped her to double her income this year over last. In a bad economy, Gannon is building savings and a pension for the first time.
"Without the support of the group, I'd never have been able to leave my apartment," says Gannon, who moved to Sunnyside, Queens, a year ago, after 13 years on the Upper West Side.
Caroline Cooper, who founded The Money Honeys, says other members have had dramatic successes. One "spendaholic" member cleared $50,000 in personal debt within about a year of joining The Money Honeys and the class that inspired them: Simply Money, taught by Galia Gichon, a Wall Street money manager turned independent advisor for women.
The Money Honeys: Learning to Thrive in Hard Times
The "spendaholic," who declined to be interviewed, ironically works for a bank, but Gichon says no one is immune from financial foibles. (Many business journalists have taken Gichon's class, and even Gannon, a lifestyle writer, has written about money.) Charging clothes, eating out and taxis, in that order, get many women into trouble, "and it doesn't stop at any age," Gichon says.
Shedding light on financial behavior in a supportive environment is what helps women to change their destructive financial behavior, Gichon says. "The sharing component is what distinguishes the Simply Money classes," begun in 2009, says Gichon, who has given seminars since 2001.
Every class starts with each woman in the room giving a report of how she has fared with her finances that week. It's the equivalent of the Weight Watchers weekly weigh-in, or you might say, a 12-step program's "round robin," where everyone in the room shares. Gichon promotes her classes as being "like Weight Watchers for your money."
Yet the confessional tone of some of the sharing evokes a 12-step program. In a class this reporter attended, women told of how they broke out on shopping sprees after weeks of diligently foregoing their daily cappuccinos.
The "money buddy" system that is a part of the class is also very much from the pages of AA and spin-off programs, such as Debtors Anonymous, where participants try to stay on track by enlisting the help of a partner. Between each weekly class, Gichon has participants contact another member, to encourage them to start talking about money — a conversation that, it's hoped will continue after the 12-week series ends.
Money Honeys Cooper and Gannon say they see parallels between their group and both AA and Weight Watchers. Both women have attended Weight Watchers meetings. (Gannon, now a marathon runner, says that's "all part of the one transformation.")
Cooper says their group is like AA in that it's not hierarchical. "You really become accountable to the group, and in that way it's like Weight Watchers." But she contrasts the large and impersonal format of its meetings with the trust that has grown among the core of a dozen or so who attend monthly dinner discussions in each others' homes.
Gichon says that's what really missing from financial services providers is that "Women don't feel that they have the space to share without being sold to." She says she's not surprised that a recent study by First Boston Consulting Group found 70 percent of women dissatisfied with the service they are getting from financial providers — nine years after she started her advisory business.
Cooper and her classmates started The Money Honeys after realizing that the main reason they had taken Gichon's Simply Money series a second time was for the camaraderie.
Money therapist Amanda Clayman says that women like to confirm within a group that they are normal in their financial behavior. "Women are also more sensitive to the more psychological aspects of money," so they like a forum that helps them process their feelings.
Clayman, who for three years has run financial support groups for The Actors Foundation, sees such groups becoming a more popular response to money management in the crisis. One of the Money Honeys is planning to move south and is thinking of starting a new Money Honey's group there.
"Money and food have a lot in common. If there's a disorder, you can't abstain from using money, just as you can't abstain from eating food. A program like Weight Watchers is helping people to establish a healthy relationship with food. If you can do the same with money, that's a great thing," she says.
Surveys repeatedly show that becoming a bag lady is a top fear for women. However, Clayman notes, "Women also fear that if they are too financially secure they will scare away potential partners."
Cooper's transformation included firing the family's money manager, which had their pensions invested in dud funds, and producing 35 percent returns on stock market investing herself. "My husband used to handle our investments. I thought he knew what he was doing, but he didn't," she says.
She also left a job— ironically, marketing a wealth management company — and started two companies of her own. One advises widows on money management. "Money is fun," Cooper says.