Suze Orman was one of the first personal finance experts I discovered on my journey to becoming debt-free. During those early years, she spoke to me in a simple, easy-to-understand way, and her books challenged me to explore my knowledge of money.
Our phone conversation challenged me in much the same way. I shared the hour-long conference call with fellow blogger Kim Julian from STL Mommy. During that hour, we got a chance to ask her some of our own personal finance questions. I won’t share all the details of the conversation, since some of it is, well, personal, but I do want to share a little bit of what I learned in that hour.
You need to have an 8-month emergency fund. In this current economy, 6-months is not enough. If something should happen to your job or your health, you need to have enough time to deal with the situation.
Struggling to build an emergency fund and save for retirement? Put the maximum amount you can into a Roth IRA. You’re allowed to withdraw what you’ve put into the Roth at any time without penalty. What I like about this strategy is that while the money is accessible, it’s not too easy to get at. And if you don’t need it, it will continue to grow until you retire.
You need to make sure you have enough insurance. Suze talked about making sure you have adequate life, homeowners, and automobile insurance to cover the unexpected. She recommends a term life insurance policy for the best value.
I told Suze that sometimes I feel like insurance can be a bit of gamble, that it’s possible to make yourself insurance poor. Her response, “Not having insurance is the gamble. Chances are something will happen. Christina, this is one area that I do not want you to be a cheapskate.” I know I’ll be checking out some of the online calculators to assess our insurance coverage.
Pay off your house before you retire. And don’t retire until you’re at least 62, preferably 67. I hate debt. I hate my mortgage (the only debt we currently have). We’ve been paying a little extra on the principal for a few years now to try to chip away at it. Since we’re on track to pay off our home before we’re 62, Suze suggested we stop paying extra on our mortgage and instead put that money into other investments: first our retirement, then our children’s education. I’ll be sharing more of our conversation out our kids’ college fun in an future post.
Get your papers together. Suze talked about the four must-have documents every person should have: a will, a revocable trust, an advanced directive and durable power of attorney for health care, and a financial power of attorney. I realized that I only have one of these things done, so I’ve got some work to do. Fortunately she gave us access to her Must-Have Documents kit so we can work on it.
Do your homework. If you’ve ever watched The Suze Orman Show, you’ve seen her quiz her guests. She asked us some tough questions, too. And she doesn’t want to hear “I don’t know” or “I guess.” She wants you to know the answers for yourself.
Whether you love her or hate her, you should know this: Suze Orman is a woman on a mission to empower people with the tools they need to take control of their finances.
She’s recently started Money Minded Moms with that goal in mind. Money Minded moms is a safe place where you can interact with other like-minded moms who want to tackle their money issues through knowledge and support.
Suze said she wanted to help moms because they spend so much time taking care of their families, they sometimes neglect themselves.
“There is so much financial advice out there that is just plain wrong,” Suze said. “It’s important in this new economy that moms get the best advice to help them take care of themselves and to raise money-smart kids. I want to make sure that there is a place where moms can find correct advice and the best tools out there to help them.”
Money Minded Moms includes articles written by Suze and a team of experts in several different areas. There is also a forum where you can ask questions. There is a lot of great information at Money Minded Moms to help you learn more about your money and how to manage it.
And when you sign up for the free Money Minded Moms newsletter, you’ll also get Eleven Things Money Minded Moms Should Do in 2011, a short e-book that will help you set your year on the right path.
I hope you’ll take the time to check out Money Minded Moms, because it is so important to make sure you’re taking care of you.
Anything that you can do to learn more about yourself and your money is worth doing. It’s important that you control your money. Don’t let your money control you.
And as Suze often says on The Suze Orman Show, “People first. Then money. Then things.”
Disclosure: I received the opportunity to chat with Suze Orman, along with access to many of Suze Orman’s online products courtesy of Suze Orman and MyBlogSpark. Please know that the thoughts expressed here are my own, honest opinions. Please read my full disclosure policy for more info.