Take Control of Your Money
Suze Orman
2009 is your year to turn your financial situation around, says author and financial expert Suze Orman. She outlines steps from her book Suze Orman's 2009 Action Plan: Keeping Your Money Safe & Sound and shares advice that you can start using today to better manage your money and start living your best life.
Man looking at bill
Don't Duck Creditors
If you owe money but can't make your payments, Suze says you shouldn't dodge creditors. Instead, call them and try to work out a payment plan. "Don't duck the situation; don't feel like you are a bad person because this has happened to you," she says. "It is happening to everybody."
Financial statements
Talk About Your Finances
Whether you're $500,000 in debt or making millions every year, tell your friends and family about your finances, Suze says. While sharing this kind of information may seem too personal for some, Suze says it's not. She says she was once $200,000 in debt and when she finally told her friends, family and clients the about it, she found support, got a handle on her situation and got out of debt. Now, Suze says she shares her yearly salary information with anyone who asks. "This year I will make $4 million to $5 million, next year I will make $8 million to $10 million," Suze says.
Parents and children
Talk to Your Children About Money
While it may not be age-appropriate to talk to young children about how much money you make every year and how much debt you have, Suze says it is important to keep your children informed about how much it costs to run a household. She says you should share with your children how much your mortgage payment, car payment and groceries cost every month and let them help you mail bills and clip coupons. "The kids [then] have a concept that money is real," she says.
Shopping bags
Say No to Excess Spending
Accept that you have to say no to taking yearly vacations, buying designer handbags, going out for nice dinners and buying pricey gifts for your children, Suze says. "People don't quite get that they have to say no yet, but that is going to set in shortly," Suze says.
Woman writing out a check
Know What You Can Afford
Live by this rule, Suze says: "If you can't write a check for it, you can't afford it." With the exception of large purchases such as cars or real estate, that rule applies to most things, she says. Suze offers advice to help you determine if you can afford those purchases:

  • Real Estate: You need at least 20 percent down with a 30-year fixed rate mortgage and have an eight-month emergency fund of living expenses and no credit card debt to afford a home, Suze says.
  • Car: If you have to take out a loan for more than three years to finance a car, Suze says you cannot afford it.
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