DINKS Reality: Suze Orman on PBS

Last week I couldn’t help but watch Suze Orman on PBS.  We have discussed Suze Orman several times on this blog and we are about to add another informative post to the list.  Suze Orman provided money management advice to a live audience from her book The Money Class: Learn to Create Your New American Dream.

Suze Orman’s The New American Dream

According to Suze Orman the new American Dream is to want more time with our family and peace of mind with our finances.  We can achieve the new American Dream if we actively manage our money and take an interest in our personal finances.  Suze Orman advises that we should make the right money moves now to save ourselves the stress later.

What you see is what you get with the new American Dream.  If we don’t take our finances into our own hands, we shouldn’t expect a different outcome.  Suze Orman advises that to achieve the new American Dream we have to live below our means but within our needs.

The New American Dream is to Make Money

During the PBS show Suze Orman singled out a couple in the audience and asked them about their dual incomes and joint finances.  The woman knew the couples exact cost of living while the man had no idea of their combined monthly income or their joint monthly expenses.

After learning about The New American Dream from Suze Orman the man pledged to spend one hour a day with his wife to actively manage their finances together. Suze Orman says that we should never leave our finances in the hands of someone else, even if that person is our spouse.  Couples should manage their finances together.

I was shocked to see the number of couples in the audience.  The financial life stage of couples in the audience ranged from newly married couples who have yet to join their finances, to seasoned couples who are childless and considering downsizing their home for retirement.  All audience members were taking notes and asking questions.

The New American Dream is Not to Own a Home

Suze Orman stated that The American Dream used to be to own our house outright, to own our car outright, and not have any credit card debts.  However, this is not a reality.

The New American Dream is not to own a home.  More Americans are following the trend of selling their homes or deciding not to buy a home.  More Americans are choosing to rent a home or apartment.

Suze Orman (controversially) says that real estate values are at a standstill.  Home prices are going nowhere because in order for home prices to go up people have to want to buy a home.  With foreclosures and the high unemployment rate there is currently more supply than demand in the housing market.

If we do decide to buy a home Suze Orman says that we should wait for a good deal and always negotiate the purchase price. As people may be desperate to sell their home they will be willing to drop their prices.  We should have at least 8 months of savings in an emergency fund for the home.

Suze Orman’s New American Dream is to Have a Good Credit Score

The interest rate on our mortgage (among other things) depends on our credit score.  In the United States our credit score can range from 300 to 850.  It is very difficult to obtain any type of credit with a credit score below 500.

Every financial move that we make affects another financial aspect of our lives, and most of our financial moves directly affect our credit score.  Our credit score can determine if we are approved to rent an apartment, if we are hired for a job, as well as the cost of our car insurance.

The New American Dream is to Successfully Plan for Retirement

Suze Orman says that we should cut down on our living expenses now in order to save for our retirement in the future. If we haven’t always been financially responsible, it is ok.  It is not our financial past that counts, it is our financial future.

American’s are being forced to collect social security later than sooner and this is why our personal retirement savings are so important. Suze Orman says that the fear about social security should not be that it won’t be available in our future; the fear should be the age at which we are allowed to start collecting.

Suze Orman is a huge fan of the Employee/Employer 401k.  We should first max out our 401k plan with our contributions as well as those of our employer, which is usually up to 6%.  We should then invest in our Roth IRA.  The benefit of a Roth IRA is that we have already paid taxes on the money invested; therefore we can start to withdraw money tax free at age 59.

What are your Financial Dreams?

Kristina Tahnyak

Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.