Young? Broke? Suze Orman Offers her Advice

By: Liz Doup, South Florida Sun-Sentinel
Posted In: Entertainment

You’re twentysomething and broke, and you don’t know how to climb out of that debtor’s pit. Take heart. Financial whiz Suze Orman feels the pain in your … empty wallet. When she was your age, she was broke, too.

Now, Orman is the author of a slew of books, including four consecutive New York Times best-sellers about finances, and is the host of a CNBC show. She has a new book out titled “The Money Book for the Young, Fabulous & Broke.”

Clearly, she’s doing fine. So we chatted with Orman and read her book, and now- for you- some free advice.

Question: Can’t I just hand everything over to a financial expert and stop worrying?

Answer: Absolutely not. Don’t be stupid and lazy and think you can give your money to a baby-sitter and that person will raise it wisely. You need to take control and educate yourself.

Q: Real quick. Give us three ways to painlessly save a few bucks.

A: No. 1. Wait an extra week or two for a haircut. Ditto, hair coloring and manicures. Skip the polish. The manicure lasts longer.

No. 2. Wash more, dry clean less. I’m not talking about your work clothes. I mean the stuff that winds up at the dry cleaners for convenience.

No. 3. Drink cheaper. Rather than two martinis- that’s $20, even before the tip- go for wine or beer and cut the bar tab in half. Finding a cheaper watering hole helps, too. Remember it’s the company, not the place, that’s important.

By the way, don’t try cutting out every little pleasure in your life. If a cup of gourmet coffee makes your day, then enjoy it and cut costs elsewhere. If you deny yourself everything, you’ll go off the deep end.

Q: Is there ever a good time to use credit cards to squeeze by?

A: There’s a difference between good debt and bad debt. Let’s say you have an entry-level job you absolutely love, and it has good potential and pay raises are likely in the future. Let’s also assume you’ve cut your expenses to a minimum, which means you’re already brown-bagging it for lunch.

In that case, good debt is using your credit card to buy groceries. Bad debt is using it at a restaurant to feed your face.

Good debt: buying gas to get to work. Bad debt: buying gas to go party.

Good debt: buying quality discount clothes so you’re properly attired for work. Bad debt: a pair of Manolo Blahniks.

Q: Can anyone live long enough to pay off those student loans?

A: Stop crying about those loans. There’s no place in the world that you can lock in an interest rate at 2 percent or 3 percent today. In some cases, you can pay those loans back over a long period of time. Look at them like a mortgage.

Q: What if you and the person you love can’t get it together on money?

A: Your financial habits are as important as your sexual habits. If you see behavior that indicates trouble with your spouse-to-be-overspending, constantly buying clothes, expensive gifts they can’t afford- you’re asking for a lifetime of misery. Don’t say “I do.” Remember, it’s not until death do you part. It’s debt do you part.

Q: What can you say about the Social Security debate?

A: Let’s take a broader approach. You need to understand that Social Security was never meant to be your sole source of retirement income. Stop thinking that your future depends on what happens to Social Security. It’s up to you to plan for your future.

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c 2005 South Florida Sun-Sentinel.

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