Book SummaryThe Money Book for the Young, Fabulous & Broke, by Suze Orman

1-Page Summary1-Page Book Summary of The Money Book for the Young, Fabulous & Broke

Handling your financial matters with care.

Maintaining a strong credit score is essential.

Regularly reviewing credit reports to identify and rectify any inaccuracies.

Orman emphasizes the importance of conducting an annual check to ensure the accuracy of your credit reports. A quarter of all reports are marred by serious errors, while inaccuracies of some kind affect 79% of them. Such errors can negatively impact your credit score, leading to higher interest costs on loans and credit card debts. You can access your credit report from the three main agencies, Equifax, Experian, and TransUnion, either through the website www.annualcreditreport.com or by calling 877-322-8228. Understand that three unique credit reports exist, with each one being compiled by a different credit bureau that gathers information from various sources. Make sure to scrutinize every report for discrepancies, including accounts that ought to have been deleted, errors in your payment history, or unfamiliar accounts that could suggest the possibility of fraud involving the use of your personal information.

If you find errors, begin the dispute process by reaching out to the appropriate credit bureau through the internet or by phone. The agency will commence an investigation and must contact the provider of the information within thirty days to verify its correctness. Be persistent in pursuing resolution and document all communication. Should you spot an unfamiliar charge from a company on your statement, it's crucial to contact their customer support for a detailed investigation of the matter. Maintain a comprehensive record of all interactions, including any documents received from the entity investigating the dispute. Maintaining a strong credit score is crucial.

Practical Tips

• Create a personal finance "health day" where you not only review your credit report but also reassess your budgets, subscriptions, and recurring charges. This holistic approach ensures that you're not only checking for inaccuracies but also optimizing your financial habits.
• Develop a personal "credit report calendar" to schedule regular reviews of your credit report throughout the year. Since you're entitled to one free report from each agency per year, stagger your requests every four months to continuously monitor your credit without paying for additional reports. Mark your calendar for Equifax in January, Experian in May, and TransUnion in September to maintain a consistent check on your credit status.
• Draft a template for a follow-up letter to send to credit bureaus if they don't verify information within the 30-day window. Having a pre-written letter saves time and ensures you address the issue immediately after the deadline. The letter should request an update on the investigation and remind the bureau of their legal obligation to verify within 30 days.
• Use a personal finance app that categorizes your spending and flags unusual activity. Many apps offer the ability to track your expenses and will notify you of any anomalies based on your spending habits. For instance, if you never spend money on gaming, an app could alert you to a charge from a video game store as a potential error or fraud.
• Use a digital journaling app with tagging capabilities to log interactions and thoughts about ongoing disputes. This allows you to add context to the documents and interactions you've recorded. For instance, after a phone call with a party involved in the dispute, you could jot down a summary of the conversation, tag it with relevant keywords, and attach any follow-up documents or emails that were discussed.

Make sure to pay off all debts when they are due to build a positive credit record.

Orman highlights that timely payment of your bills constitutes 35 percent of your FICO credit rating. Make it a priority to consistently settle at least the smallest amount owed before the payment's due date to demonstrate sound financial stewardship. Regularly following this routine will result in a steady enhancement of your creditworthiness. Make certain that you send your payments sufficiently early, aiming for at least five days before the due date, or arrange for an automatic transfer to take place a few days beforehand. Orman recommends managing your expenses efficiently by adopting electronic methods for settling bills. Set up alerts within your calendar or electronic organizer to start the online payment process well before the due dates. Keep in mind that even one late payment can significantly impact your credit rating, which may result in difficulties when seeking favorable borrowing conditions in the future.

Practical Tips

• Create a visual debt repayment tracker to stay motivated and organized. Draw a thermometer on a poster board and fill it in as you pay off debt, or use a spreadsheet with conditional formatting that changes color as you make payments. This visual representation of your progress can provide a sense of accomplishment and keep you focused on your goal.
• You can boost your credit score by setting calendar reminders for all your bill due dates to ensure timely payments. Timely payments are a significant factor in credit scoring, so by never missing a payment, you're directly influencing your creditworthiness. For example, use your phone or computer calendar to set recurring reminders a few days before each bill is due, giving you ample time to make the payment.
• Partner with a friend or family member to check in on bill payments. Establish a monthly 'finance buddy' system where you and a trusted person remind each other of upcoming payments. This adds a layer of accountability and can be especially helpful if you're someone who responds well to social commitments.

It's essential to carefully regulate the ratio of your credit card debt in relation to your total credit limit in order to enhance your credit rating.

Orman advises monitoring the ratio of your...

The Money Book for the Young, Fabulous & Broke Summary Financial management involves not only saving but also strategizing for future financial stability and making investment decisions.

Establishing a monetary safeguard to handle unforeseen expenses when they occur.

Setting aside funds according to a budget to achieve one's financial objectives.

Orman emphasizes the necessity of establishing a financial buffer to handle unforeseen life occurrences. For young individuals juggling numerous bills, she emphasizes the critical need to secure their economic stability. She advises creating a monetary buffer substantial enough to cover half a year to nearly a year's worth of living expenses, safeguarding against unexpected occurrences like job loss, car repairs, or medical bills, thus preventing the necessity of taking on high-interest debt. Starting with small monthly contributions and gradually increasing them as your income grows is advised for building up this reserve over time, even if it's not possible to establish it immediately.

Orman recommends evaluating your consistent expenses, including costs for accommodation, utilities, food, travel, and ongoing fees, to set a realistic target for building up your savings. She advises adding an extra 10% to your financial projections to account for unexpected adjustments. By understanding your essential...

The Money Book for the Young, Fabulous & Broke Summary Developing a strategy for your professional advancement while effectively handling your financial income.

Choosing professions that yield personal fulfillment over those promising substantial monetary rewards.

Prioritizing the acquisition of experience and the assumption of responsibility over the pursuit of immediate financial gain.

Orman emphasizes the importance of young individuals selecting professions that provide fulfillment instead of just pursuing high-paying jobs that lack joy, underscoring the long-term benefits of pursuing true passions. Suze Orman stresses the importance for young professionals to find employment that covers expenses and provides a decent standard of living, while warning against settling too quickly into their first role in their professional journey. She advocates for the pursuit of careers that resonate with one's unique skills and passions, despite the possibility of modest initial earnings.

Orman contends that acquiring skills and taking on responsibilities from an early stage is a significant investment in your future income prospects. As you progress in your career, building a foundation for advancement and higher income involves improving your skills, expanding your expertise, and taking on challenges that push you beyond your...

The Money Book for the Young, Fabulous & Broke Summary Obtaining a home loan

Choosing whether to lease or purchase a vehicle.

Evaluating all expenses associated with ownership, such as insurance and upkeep.

Orman underscores the lasting financial benefits of buying a car instead of choosing to lease one. She argues that choosing to lease a car can ensnare people in an endless cycle of financial obligations for their vehicle, as the typical three-year term of these contracts often leads to repeated renewals to maintain possession of a car. Once you've paid off your car loan, you'll enjoy the extra funds each month, which you can then allocate towards boosting your savings for retirement or reducing other outstanding debts.

Orman clarifies that both leasing and owning provide the opportunity to deduct business expenses when the items are utilized for work-related activities. She recommends carefully assessing all costs tied to possession of an item, encompassing not just the regular payments but also the expenses for insurance, maintenance, and the item's steady depreciation. Remember, while purchasing a vehicle requires a significant financial investment, it can ultimately lead to improved financial independence and yield savings compared to...

The Money Book for the Young, Fabulous & Broke Summary Managing money within relationships

Building a foundation of mutual financial understanding and reliability within relationships.

Engaging in conversations about one's financial conduct, aspirations, and principles.

Orman emphasizes the importance of aligning financially and having transparent discussions about finances for enduring and satisfying relationships. She emphasizes the importance of closely intertwining financial stability with the foundation of a jointly secured future, and acknowledges the importance of strong emotional and physical connections. She recommends that couples have candid discussions about their spending habits, financial goals, and values to ensure they fully understand each other's unique financial strategies.

Orman argues that neglecting financial conversations can lead to tension, resentment, and ultimately relationship breakdown, as unresolved financial conflicts often escalate over time. She encourages individuals to proactively manage their finances by identifying and rectifying any money management issues, which encompasses employing a variety of strategies for saving, budgeting, and managing debt. She underscores the importance for readers to cultivate a partnership...