Paying Yourself First

Devika Kamboh, a financial planner and volunteer speaker at Dress for Success's money management workshop, doesn't want any of the 60 or so attendees to leave without first understanding one key concept: Pay yourself first.

That means starting an emergency fund with six to 12 months' worth of savings, Kamboh explains. "That's so you don't have to make decisions under stress or accept a low-paying job that you hate," she says.

The women, who range in age from their 20s to early 70s, nod and murmur in agreement. They have all gathered at the New Yorker Hotel in Manhattan for a career fair, where companies ranging from Dress Barn to L'Oreal have set up tables to give these women—many of whom have been out of the workforce—a chance to find a job.

Founded in 1997, the nonprofit Dress for Success works with community organizations to help unemployed and underemployed women not only find jobs but also learn life skills, such as money management.

"We want women to make informed choices," says Lisa Tomanelli, executive vice president of workforce development at Dress for Success. "Some of our women in their 40s didn't have [financial] education, and we're trying to make up for that."

Financial literacy is one of four core areas that the organization focuses on, along with the written rules of the workplace such as employment law, unwritten rules such as communication skills, and work-life balance. According to survey data collected by Dress for Success, participants want help with debt management, getting higher pay, long-term financial planning, and preventing identity theft, among other money-related topics.

At the Manhattan workshop, Kamboh stresses the importance of setting financial goals but is quick to recommend against budgeting extremes. "When you're working as hard as you're working, it's important to give yourself some 'me' time," she says. You might say "thank you" to yourself by getting a manicure, she adds, or enjoying an occasional night out with friends.

"I don't usually say this to guys, because they don't get it," Kamboh says, generating laughter. Women are multitaskers, after all, and "you're not given enough credit for the amount of work that you're doing."

Despite believing in some self-pampering, Kamboh is strict about budgeting and clarifying needs versus wants. She asks audience members whether a cellphone is a need or a want, and after determining that it is a need for most women, she has two women stand up. One got her cellphone free; the other paid $400 for a phone with an MP3 player on it.

"I'm going to be really mean to you," Kamboh says with a smile to the young woman with the expensive phone. "How often do you listen to the MP3 player?"

The woman admits that she has not listened to it for the past three years. Kamboh tells her what is now obvious: She should not have paid so much for it. Then Kamboh reminds the room that moving toward larger financial goals, such as saving for school or a house, may require cutting down on other costs.

That message resonates with Diane Faulcon, a former legal secretary who lives in the Bronx. She wants to find a new job as a legal secretary and move to Queens or New Jersey and buy a home. "I want to splurge less. I often just buy [something] instead of shopping around. I'm going to focus on being mindful of my finances," she says.

Vania Wynter, a single mother of four kids ranging in age from 3 to 15, has a question for Kamboh about the wants-vs.-needs debate. "My income is not high, but my kids think it is," Wynter says, drawing murmurs of sympathy from around the room. How can she teach her children the difference between needs and wants? Kamboh recommends a financial literacy course for Wynter's teenagers, and many of the women take notes.

"Dress for Success has been very helpful at building my confidence," Wynter says after the workshop is over. Her ultimate goal, she says, after going back to college, is to become self-employed as a motivational speaker—not unlike Kamboh.