Money and investment skills for building credit and savings
The Money Book for the Young, Fabulous & Broke by Suze Orman
I admit, I am not as young as the young people Orman is targeting. Fabulous is iffy–I spend most of my day with two toddlers! I am definitely broke, though, so I still look to this book for guidance on digging out of a financial hole. Some financial goals are common sense, (at least I hope!) You shouldn’t spend more than you make, you want to pay your bills on time, etc…. But other areas are a bit more confusing. For example, if you have credit card debt and student loan debt, should you still contribute to a 401k? Or if you have no emergency fund, do you build one before trying to pay off your debt? Which debts do you pay off first? The format of the book is very user-friendly and easy to read. The advice is set up as questions and answers and the answers are basic enough for someone without a finance background. The information is enough to help you without overwhelming you. Orman gives her expert opinions on these issues and explains her reasoning. Of all the famous financial advisers out there, she’s my favorite.
Here are the chapter titles:
1. Know the Score
2. Career Moves
3. Give Yourself Credit
4. Making the Grade On Student Debt
5. Save Up
6. Retirement Rules
7. Investing Made Easy
8. Big-Ticket Purchase: Car
9. Big-Ticket Purchase: Home
10. Love & Money
To start, Orman explains credit scores and how they are determined as well as what your score should be for your best credit offers and how to raise your score. She gives practical career advice and tips on how to get your best salary. She tackles the idea of student loan debt–and advises that it is “good debt,” (with an explanation, of course.) She gives ideas on how to prioritize your money, your saving and your investing, (as well as how to get by if you don’t earn enough.) And she gives a good overview of the various retirement and savings plans available, along with their benefits and tax advantages as well as their guidelines. As a beginner who is overwhelmed by IRAs, HSA, FSA and 401ks, I enjoyed her easy-to-understand descriptions. I think this book makes a good overview for someone who is looking to build a healthy financial future.
If your student loans have low interest rates, it’s not necessarily best to pay them off quickly.
Avoid non-conventional mortgages–especially variable rates and interest-only loans.
Avoiding leasing a car–when your lease is over, you still don’t own a car!