In a recent article on her website, Suze Orman discusses a change in her recommended credit card strategy. This is one of the things I like about Suze Orman – her suggestions change based on the economic situation, and she understands that financial advice varies person to person. The meat of her article is about how people with high credit card debt and not much savings shouldn’t work on paying off the debt and instead should pay the minimum and make it “top priority” to build up as much savings as possible. Why? Because the credit card companies don’t care about you, and with unemployment rising, it’s important that you have a way to protect yourself. You could get your card paid off, and then the company could close your account for no reason. Should you then lose your job, you suddenly don’t have a way to pay your bills.
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.