The money book for the young, fabulous & broke

350 Pages·2014·2.2 MB·English

by  Orman

ALSO BY SUZE ORMAN
You’ve Earned It, Don’t Lose It
The 9 Steps to Financial Freedom
Suze Orman’s Financial Guidebook
The Courage to Be Rich
The Road to Wealth
The Laws of Money, The Lessons of Life
Women & Money
THE MONEY BOOK FOR THE YOUNG,
FABULOUS & BROKE
SUZE ORMAN
Riverhead Books New York
THE BERKLEY PUBLISHING GROUP
Published by the Penguin Group Penguin Group (USA) Inc., 375 Hudson Street, New York, New York
10014, USA Penguin Group (Canada), 90 Eglinton Avenue East, Suite 700, Toronto, Ontario, M4P 2Y3,
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Penguin Books Ltd., Registered Offices: 80 Strand, London WC2R 0RL, England
This publication is designed to provide accurate and authoritative information in regard to the subject matter
covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or
other professional services. If you require legal advice or other expert assistance, you should seek the
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While the author has made every effort to provide accurate telephone numbers and Internet addresses at the
time of publication, neither the publisher nor the author assumes any responsibility for errors, or for
changes that occur after publication. Further, publisher does not have any control over and does not assume
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Copyright © 2005, 2007, 2014 by Itzy
All rights reserved.
No part of this book may be reproduced, scanned, or distributed in any printed or electronic form without
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author’s rights. Purchase only authorized editions. RIVERHEAD is a registered trademark of Penguin
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The Library of Congress has catalogued the Riverhead hardcover edition as follows:
Orman, Suze.
The money book for the young, fabulous & broke / Suze Orman.
p. cm.
Includes index.
ISBN 978-1-1012-1856-3
1. Finance, Personal. 2. Young adults—Finance, Personal. I. Title: Money book for the young, fabulous
and broke. II. Title.
HG179.O7576 2005 2004062043
332.024—dc22
To Carla and Teddy, a fabulous team
CONTENTS
Introduction: For the Young, Fabulous & Broke
Operating Manual
1. KNOW THE SCORE
• What your credit report says about you • How your credit score runs your
financial life • Smart moves for boosting your score
2. CAREER MOVES
• Surviving on a too-small paycheck • Paying your dues •Dealing with office
politics • Effective job hunting
3. GIVE YOURSELF CREDIT
• Qualifying for the best credit card deals • Balance transfers • Fee traps •
Protecting a low interest rate •The best way to pay down your balances
4. MAKING THE GRADE ON STUDENT DEBT
• Consolidation strategies • Payback options
5. SAVE UP
• Squeezing more out of what you make • Paying off debt vs. saving • CDs,
money markets, money funds
6. RETIREMENT RULES
• Why you can’t afford to pass up a 401(k) company match • How a Roth
IRA trumps your 401(k) •The right way to do an IRA rollover
7. INVESTING MADE EASY
• The best funds for your 401(k) and Roth IRA • Diversifying your risk •
Dollar cost averaging
8. BIG-TICKET PURCHASE: CAR
• The lease trap • Financing tips • Cash back v. zero-percent loan • Auto
insurance
9. BIG-TICKET PURCHASE: HOME
• Making the move from renter to homeowner • Running the mortgage
maze • Private mortgage insurance • Protecting your home
10. LOVE & MONEY
• Merging finances when you merge lives • Life insurance • Wills • Trusts •
Power of attorney • Borrowing from friends and family
Don’t Do It
Glossary
INTRODUCTION:
for the young, fabulous & broke

Listen, I know dealing with the responsibility of money, especially a lack of
money, may not necessarily be high on your list of priorities. But something
motivated you and brought you to this page, so in some way you are telling
yourself it’s time to start dealing with your financial life. It’s time to make some
changes.
Most likely, you are young; I hope you feel you are fabulous; and chances are,
you are also broke. I’ve talked to thousands of young people like you over the
years, and, for what it’s worth, you’ve got plenty of company.
But you also have a great way out of your current situation. You have time.
Because you are young, you have the time to right any missteps, and the time to
build a solid financial life. I also know that you have the bandwidth to take the
advice in this book and put it into action. You may be intent on feeling beaten up
these days, but I’m not going to play along. I admire you for your grit in coping
with a lousy job market, skyrocketing real estate values, and hefty student loans.
But what I also hear when I talk to you is that you have what it takes to manage
the hand you’ve been dealt.
Now, having said all that, I wouldn’t be surprised if you’re wondering if this
book can really deliver the goods or if it’s going to be yet another personal
finance book by someone who has no clue about the issues you’re dealing with. I
guarantee you that this is definitely not your parents’ money book. I get your
situation. The advice in this book is customized to fit your life today. How do I
know what you’re going through? Because you told me. You were quite blunt
about what you want from me, as well as what you don’t want.
You want advice that deals with your reality—a set of solutions for the problems
you have. You want to be told what to tackle first, and you want clear advice on
how to get the job done. And that’s what you are going to get here, delivered as
concisely as possible. I only dive into details that are absolutely crucial to your
success. And you don’t need an iota of prior knowledge. I know you’ve been too
busy or uninspired to figure out how a Roth IRA works, what a FICO score is,
and why you should even care. No worries. I have written every section of this
book so you can quickly and easily comprehend exactly what actions you need
to take and why.
What you don’t want is yet another personal finance book spewing the same old
advice that doesn’t work for you. I completely agree. You won’t catch me telling
you to cut back on the lattes and “simply” save $10 a day. As if saving $3,650 a
year when you are broke could ever be simple. Nor will I tell you that credit
cards are the devil in plastic (on the contrary, I think they can be good for you)
or that you must have eight months of living expenses saved up as your
emergency reserve fund before you are allowed past go. Un-uh. I know that’s
not realistic or reasonable for the majority of you at this point in your lives.
Besides, if you didn’t have credit card debt and you already had an eight-month
emergency cash fund, why would you have picked up this book? You sure
wouldn’t fit my definition of broke.
BROKE IS relying on a cash advance on your credit card to pay the rent or
mortgage, and praying that you have enough left on your credit line to do so.
BROKE IS having a ton of student loans that make you nauseated when you think
about how long it is going to take you to pay them off.
BROKE IS not opening your credit card bills because you’re terrified to see what
you owe and have no way of paying. So instead, you get hit with the late fee and
finance charges.