Fidelity Investments’ Lorna Kapusta On Budgeting For A Pandemic & Why More Women Should Talk About Money

With uncertainty surrounding schools reopening this fall, many working mothers (including your readers) are feeling personally and financially stressed. Working moms are juggling more roles now than ever and with many taking on the majority of the childcare and for some, their careers have to take the backseat.   

If there is anything the global pandemic has shown, it is the need for more conversations and education around finance, especially for women who make the majority of household financial decisions, take on the majority of childcare responsibilities, and who juggle work commitments as well.

High level conversations about money can be intimidating, and there is a growing need for financial literacy lead by women. Enter Lorna Kapusta – Head of Women Investors at Fidelity Investments, who is taking the lead on these conversations with her role.

Lorna who is committed to helping women make smart financial decisions, hosts Fidelity’s weekly interactive series, Women Talk Money. We wanted to get prepared learn her insights in this area, and had the opportunity to ask her about the 50/15/5 Budgeting Rule and why you should be following it, why you need an emergency fund and how to build one, and why you should not (unless it is a last resort) tap into your retirement savings

Fidelity Investments’ Lorna Kapusta

Tell us about your role at Fidelity as Head of Women Investors, and what you focus on.

As Head of Women Investors at Fidelity, I lead a firm wide initiative committed to motivating women to become more actively involved in their finances at every stage for their lives. 

My team and I are focused on driving financial knowledge among women by providing education and experiences that meet their unique needs and fit into busy lives. That includes offering live events and workshops, interactive tools, actionable advice and other educational resources. 

In today’s unpredictable environment, women are feeling more stress related to finances than ever. But they’re also telling us they’re ready to take action to make sure their money is working harder, which includes developing a financial plan and starting to invest. This is across all age groups, but we’re seeing younger women lean in most. Our goal is to provide the tools and guidance they need to take those next steps and feel financially secure. 

Additionally, as a wife and mom of three, I’m no stranger to the abundance of new stressors facing women as a result of COVID-19.  To help, my team recently launched a new initiative, Fidelity’s Women Talk Money series, to provide financial guidance and tackle some of real women’s most pressing financial questions today. Since launching these live Zoom discussions in April, we’ve been focused on connecting with the thousands of women across the country who join us each week and answering their money questions real-time. It’s been very rewarding!

So many moms were already stretched thin in terms of time, finance and energy due to lack of support in many areas, and now the pandemic has made it worse. How has your work changed specifically now that COVID-19 has exacerbated so many of these inequities?

At Fidelity, we understand that women and men have different needs when it comes to planning for life’s major moments and recent events have certainly exacerbated this.  In particular, Caregiving responsibilities tend to fall onto women’s shoulders more so and financial planning can take a back seat to more pressing family needs.

We want women to realize that they’re not alone if feeling stretched, and that others share many of the same questions they’re asking, which is why we created the Women Talk Money weekly series. We get to connect with our customers, and other women across the country, and the questions and feedback they share helps us understand how COVID-19 is impacting their lives and careers and make sure we’re providing answers and guidance to their specific financial questions. We’ve been tackling topics that all women are facing such as the impacts of stepping out of the workforce, dealing with an unexpected loss of income, managing retirement concerns and more.

Managing your money doesn’t have to take a lot of time and effort. It starts with knowing what your goals are. From there, we can help you plot the path to achieve them.

Let’s talk money specifics: what is the 50/15/5 budget rule and why should every person be following this? 

Now more than ever, you want to put a budget in place that you can follow. Really get to the bottom of what’s coming in (income) and what’s going out (bills, debt payments, etc.) by taking a close look at expenses (both essential and discretionary).

Our 50/15/5 guideline is a saving and spending rule of thumb. 50% of your income should cover essentials (i.e. rent); 15% is what you should aim to save toward retirement; and 5% goes toward short-term savings goal (such as the all-important emergency fund). The remaining 30% is for discretionary expenses and can be spent as you see fit. The 50/15/5 guideline is just a rule-of-thumb, and depending on where you live, you may need to adjust these percentages a little bit to fit your life. Check out this budget calculator to see how your own saving and spending stacks up.

What are some practical ways to build a savings or emergency fund if someone is in debt, works minimum wage, or lives below the poverty line? 

This has certainly been a difficult time for many people. If you’re feeling strapped financially, creating a plan and starting to put savings towards an emergency fund may help reduce your stress.

While we generally suggest setting aside three to six months of expenses in an emergency fund, just start by saving what you can. Even small amounts will add up! Consider a high-interest account and automating your contributions. 

A good place to start saving is by reviewing your budget. Take a close look at where you’re spending your money and think about what is truly essential and what you can’t live without. What’s interesting about our current time is that your discretionary expenses may be much lower. For example, you may have cut out commuting costs or your dining out expenses are lower. Consider reallocating some of this traditional spending to your emergency fund. Lastly, know you don’t have to navigate this time alone! A Fidelity advisor is always a (free!) phone call away at 1-800-FIDELITY.

What are some of the topics you cover in your weekly interactive Fidelity series “Women Talk Money”? 

Women Talk Money tackles a variety of questions and topics that we are getting asked about most from women all over the country. The topics really are driven by our viewers. Some of the recent topics include: what you can be doing right now with your money to gain greater peace of mind, navigating a change in income, investing for short and long-term goals and how to save for college. We’ve also covered topics like financial planning what it’s like to meet with an advisor, preparing for retirement, tax smart investing and more. We encourage everyone to join the conversation every Wednesday at noon ET and register here or catch up on previous discussions at our on-demand video library.

We’re looking forward to upcoming episodes focused on topics such as how to maximize workplace benefits (as it’s almost annual enrollment time in the workplace!), options for your old 401(k)/403(b) and managing multiple financial priorities. 

What are your thoughts on financial literacy and when should people start learning about this?

It is never too early to start learning about personal finance! Like anything, financial literacy comes with exposure and experience. That’s why my team at Fidelity is dedicated to providing women with the tools and resources they need to feel confident when it comes to their financial well-being and futures. This learning series is one example, and a great place to start.

While some still feel uncomfortable talking about money, this is changing – which is a good thing! The more you talk about any topic, the more you can learn and start building good money habits for the future. Most of us will have to manage money and make financial decisions throughout our lives – and we should be open to having conversations with our children, family and friends about the what we’ve learned from our financial successes and mistakes. 

The great news is that more women today are more inclined than ever to discuss their finances. According to a recent Fidelity study, more than 1-in-3 women are talking more with their friends and family about money since the start of the pandemic. This is encouraging as women can support one another as they set and work towards personal goals.