As the Web3 industry evolves, it's important to evaluate how well it's actually changing the financial literacy game.
Hype cycles, market volatility and technology innovation all play a role in why some opportunistic investors earn riches, while others feel the pain of a drained crypto wallet. Crypto is a highly volatile market, though full of interesting potential. Before getting too enamored with the promise of digital assets and decentralized finance (DeFi), crypto-curious consumers need foundational financial literacy skills to stay grounded amid unpredictability and make empowered choices.
But how do we gain those skills without some personal finance advice? Crissi Cole, founder and CEO of Penny Finance, wants to help women untangle their financial confusion and get clear on their desired path to wealth. Cole's platform offers a personalized and tech-powered financial mentor for women who don’t have access to a financial advisor.
Ahead, BFF contributor Isabel Doonan interviewed Cole about the unequal realities women face, and why women should start seeing ourselves as the smart, capable investors we truly are.
by Isabel Doonan
I’m lucky enough to call Crissi a friend and personal mentor, and believe strongly in her tangible approach to education. While our community continues to champion best practices for crypto-security and DeFi literacy, the naked truth is that DeFi is rooted in traditional finance fundamentals. Without properly understanding money essentials that dictate much of our day-to-day lives and financial wellbeing, we cannot fully immerse ourselves in the world of DeFi.
As always, this is not financial advice. The intent of this article is to help others educate themselves and learn.
Isabel: What inspired you to create Penny Finance, and how does your company help women achieve financial freedom?
Crissi: I've watched women work extremely hard my entire life. First with my Nonna who worked until the day she passed at 75 years old, and then with my single mom who worked 70-hour weeks and brought me to the office on the weekends. I tried to escape that by landing a job in finance at Goldman Sachs, yet, during my ten-year career at Goldman, not only was I living paycheck to paycheck because of my student loans, but over and over again my female friends and colleagues would come to be (and beg me) for financial advice to get out of debt and into investing. There were no resources I could point them to, and financial advisors wouldn't take their call because they didn't have $100,000 in the bank.
"Penny is what I wish I had at 22, what I still need at 33 as a new mom, and what the 70% of women in America can use to grow wealth, and retire free."
Isabel: Financial literacy is crucial, especially for women. What are some common misconceptions women have about money, and how does Penny Finance address them?
Crissi: So many, but the first is that we aren't good with numbers or will never understand finances as well as men. False! Women who opt into investing and finances outperform across the board — from hedge fund managers to business owners. The second misconception is that saving is safer than investing. Nine times out of 10, women will tell us that they just want to see their money in their bank account. Why take the risk of investing? Well, the problem with that is you can't outearn compound interest. Over the long haul, the deterioration of your savings from inflation plus the lack of growth of your money won't leave you with enough to retire with.
Isabel: As you know, April was Financial Literacy Month. What tips can you share with women to improve their financial literacy, and how can they get started?
Crissi: Know you numbers! The hardest part is beginning, looking at your student loan statements, opening your credit card spending summary, or checking your 401k asset allocation. I always tell people to pick one thing, make it a habit, and then move on to the next. If you create goals that are too lofty, then it can be overwhelming to chip away at them. For example, move your savings to a high yield savings account to earn $500 extra dollars. That's preferable to, say, trying to save $20,000 this year.
Isabel: What steps can women take to overcome financial challenges, such as debt or lack of savings?
Crissi: Education. Knowledge is power. Women are whip-smart, goal oriented, multi-tasking queens. Once we know what to do, how to do it, and why to do it, managing money and achieving your financial goals becomes second nature.
"Women are whip-smart, goal oriented, multi-tasking queens."
Isabel: What resources does Penny Finance offer to support women in becoming more confident in managing their finances?
Crissi: Women are outcomes based, goal-oriented and generally risk averse. Penny offers digestible financial education that is 100% online, and personalized to you, so you can quickly access the information you need to make an informed decision. From home-buying to credit cards to parental leave, we want you to squeeze some extra dollars out of your wallet.
Isabel: What are some future plans for Penny Finance, and how do you see your company impacting the financial industry in the long term?
Crissi: We want to be a place a woman goes at any stage in their life to get financial advice that is super affordable. From getting married to having a baby to switching jobs, you will be able to link all your accounts and have actionable next steps to take depending on your situation and needs.
"I think the really hard part with debt, especially for women, is that we carry so much of it. Women hold two thirds of the student loan debt balance in the U.S. because we are more educated. That is just an extra burden. It requires us to think about where every dollar from our paycheck is going."
Isabel: Can you share a success story of a woman who has worked with Penny Finance to achieve financial freedom and take control of her finances?
Crissi: One of our first 100 members was a 29 year old living in Washington DC. Her main goal was to pay off her student loans, and she thought she was crushing her goal by contributing $800 monthly to her debt. However, when she began entering her loans into Penny's debt payoff plan, she learned she was actually throwing away $800 a month and might as well have been paying $0 because her minimum payment had to be $1,200 to just cover the interest. She increased her payment above $1,200 and created a plan to pay off the loans with 12 years instead of continuing to play a zero-sum game with her debt. Thanks to the personalized learnings and resources, along with Penny’s calculators and custom plans that Penny’s tech builds for its members, this member and 15,000 other users have taken the leap towards achieving financial freedom.
The truth is, crypto investing is not for everyone, but there are enough opportunities to become involved in Web3 that allow interested newcomers to participate in the positive aspects of the space without assuming unwieldy risk. Making decisions — such as how much crypto to buy, what portion of one's portfolio to allocate to digital assets and whether to buy non-fungible tokens (NFTs) — is a highly personal process that depend on your long-term financial plans.
When Web3 newcomers — in particular, women and nonbinary people — master financial literacy basics, they can participate in the digital assets space with confidence, and maybe even have a little fun.
Read More: BFF's Web3 Glossary: All The Terms You Need To Know
Isabel Doonan is the CEO and cofounder of Girls Gotta Eth and Sacreage, a Web3 startup working to expand tooling for crypto philanthropy. With a background in Fintech and ESG, she is deeply passionate about the intersection of blockchain and climate funding, as she works to build a better, more equitable future in which everyone can participate in philanthropy.
This article and all the information in it does not constitute financial advice. If you don’t want to invest money or time in Web3, you don’t have to. As always: Do your own research.
