"Modern Girls" Pen Financial Guide

On My Own Two Feet gives advice on how women can save money but still splurge on a pair of Escada jeans.

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When it comes to money, women are different. They usually earn less than men do, are more likely to take job breaks to care for children or parents, and store less for retirement.

That's why Manisha Thakor and Sharon Kedar, two Harvard Business School grads who work in the financial services industry, teamed up to write On My Own Two Feet: A Modern Girl ' s Guide to Personal Finance. While some of their tips are useful to both sexes — pay off debt, save a chunk of your income for retirement, and learn how to budget — they tailor their real-life examples to women and make financial success seem plausible, even for someone starting at "Go." Here are some of their tips:

Save big. Squirrel away at least 15 percent of gross income for retirement. That comes out to $6,000 on a $40,000 salary. If that seems unmanageable, Thakor and Kedar recommend starting with 2 or 5 percent and working your way up. The most immediate need is for an emergency fund, they say, since people face an average of $2,000 in unexpected costs each year.

Pay off debt. Thakor and Kedar show that making only the minimum payment on a credit card bill can easily mean you're soon paying double, turning a $3 latte, already a steep price for coffee, into $6 java. "Trying to pay off your debt by making just the minimum monthly payments is a bit like trying to lose weight by dieting strictly all day long and then eating five Krispy Kreme doughnuts right before going to bed," the authors say.

Avoid unnecessary credit. They suggest steering clear of those tempting retail credit cards, which promise 20 percent off on the first purchase. The upfront savings doesn't compensate for the cards' high interest rates and the risk of a reduced credit score due to too many credit cards, say Thakor and Kedar. They calculate that a bad credit score can cost as much as $415 a month in higher mortgage payments.

But keep old credit lines open. Because a credit card in good standing for a long period can improve a credit score, Thakor and Kedar recommend keeping those old cards open, especially if you're within 18 months of buying a car or a house.

Stay within budget. The book's useful charts allow readers to calculate what they can afford based on income. A $50,000-a-year salary, for example, with a 6 percent car loan, makes an $18,900 car affordable. The same salary and same interest rate can support a $174,000 home. Another chart points out that someone earning $40,000 a year and saving 10 percent for retirement starting at age 25 will have stored up $1.8 million by age 65 — not a bad retirement egg.

Have fun. Throughout the book, the authors strike a balance between generating wealth and living on a reasonable budget. While they urge putting 15 percent of income toward savings, they also advocate dedicating an equal amount to "fun," a message any modern girl — or guy — can embrace.