Anyone read Suze Orman's new book...

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Registered: 09-20-2004
Anyone read Suze Orman's new book...
4
Sat, 07-16-2005 - 9:59am

"The Money Book for the Young, Fabulous and Broke"? (focuses on people in their 20s and 30s) I borrowed it from the library this week, and it is pretty different than most of the other money books i have read. For example, it recommends against building an emergency fund while you are under mounds of cc debt. The one thing i did like is that it does ver strongly recommend putting money inot your 401k up to the amount of the employer match. The book was also really big on going back to school to help your career or to make a switch, etc as long as it makes financial sense (more money in the long run)
Anyway, it was an interesting read, except for the part about investing, which I just couldn't get into.

after reading it though, personally, I wouldn't change a thing. I like putting money aside every month (my ef has never really built itself up bc we use it for things that are not true emergencies....medical bills, stuff related to our dd's autism, etc) but putting money aside every month has put an end to our use of our ccs. (and if our fund did get over a thousand, I would start using the money I'm setting aside to pay down another bill.)

I am definitely a bigger Dave Ramsey fan. Heather

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Registered: 08-19-2003
Sat, 07-16-2005 - 10:06am

I have requested it from the library, and should have it by the 23rd. I hope it was worth the wait. Am I going to be dissapointed?

I am not a big fan of an emergency fund. We have really not been putting money into one. But I can easily find a job making the amount of money I do, and my husband can get a job tommorow making more then he makes today. So employment is not a big concern for us.

I have been making snowflake payments of at least $800 since I started following our budget, so "if" a need comes up, we could pretty much just pay cash instead of snowflaking. My goal is to have our debt under $10k by the time I leave for Florida in October. I think we will make it.

Shannon

Shannon


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Registered: 09-07-2003
Sat, 07-16-2005 - 10:21am

I haven't read the book, (but I am just starting david Ramsey's, my FIRST money book-read. ) BUT...I did see some of her PBS show based off this book.

I think the reason she would recommend against emergency funds to that audience is that her target in that book (at least, the impression I got from the audience at the show), is young single people with few responsibilities. (much of her audience was college kids) they probably live in an apartment, so it something major breaks, its the apartment complexes problem. They're probably generally healthy. Single, with no kids, so no worries about providing for them...
The theory would be, then, if I (im 26, single), lost my job today, and had NO debt...I could find employment....Burger King, temping, grocery store clerk, whatever, fairly quickly...that would provide enough income for me to meet all my basic needs until I found more secure employment again.

And, in college, i lived in the dorms, so housing and enough food to live off of was covered at the beginning of the semester...AND I didn't "need" a car, and I had free medical coverage at the campus health center (even prescriptions were ususally free).....

So, setting aside an emergency fund when the important thing is getting the weight of CC debt off my shoulders might not always be the wisest course. If that makes sense?

I mean...interest rates in savings accounts...even if I locked my emergency fund into shortterm CDs to maximize their earnings while still having the funds available...come no where Close to the interest rates my CC companies are collecting from me.
I mean..I got a statement in the mail yesterday from one CC company..the balance is just under $5000. the interest rate is 27%. the minimum payment is $117. the monthly finance charge was $109. So even if I am only putting $50 aside a month into an emergency fund...that's $50 that would do me sooo much more good paying an extra $50 toward the balance on that card.

However....if I had a home that I needed to keep a roof on, or a child I needed to care for, etc....anyhing that could potentially constitute a true "emergency". . .then I would definitely feel the need to get an EF built up first.

Glad to hear the vote of confidence on David Ramsey, though. I checked him out of the library this week on the overwhelming recommendations he gets here. :D

~ Teresa

Teresa
http://www.affordingpickles.blogspot.com

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Registered: 02-06-2005
Sat, 07-16-2005 - 12:25pm

I really should borrow this book from the library and read it before I speak too much about it.

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Registered: 11-13-2004
Sat, 07-16-2005 - 2:25pm

Suze doesn't in general advocate against an emergency fund. Her book was geared specifically for the YF and B'rs who generally don't have the money to put in an emergency fund anyway because they have so much CREDIT CARD debt. These are the people who have absolutely no money left at the end of the month to even be able to put in savings. She tells them get rid of the credit card debt, then you WILL have money to put in savings for emergencies. She stresses discipline to an undisciplined population!

She is also not advocating for someone to buy an expense car that they cannot afford. I have seen her several times on her show tell someone to sell their car because the car was breaking their budget and was not realistic for their lifestyle. Most financial people say have a 3-6 month emergency fund. Suze says minimum of 8 months in an emergency fund. This is how big a fan she is about having an emergency fund. She is also a big fan of getting out of credit card debt. I like some of Dave Ramsey's ideas, but for me $1000 is not enough of an emergency fund to start with. I also don't like how preachy some of his sections were in his book the total money makeover. I really don't think it is realistic for example to start selling off everything I own, or to work 70 hours a week just to get out of debt faster. You bring up some interesting points about Suze Orman, but Dave has his quircks as well. Two different philosphies and people ultimately have to decide what works best for them.