SUZE ORMAN’S 2009 ACTION PLAN

Posted on March 8, 2009. Filed under: -- Book Summaries, -- Building Wealth, -- Money Help (in simple terms), -- Suze Orman, -- YOUR Retirement | Tags: , , , |


By Molly Greavessuze_orman_2009_action_plan1

New York Times best-selling author and one of our nation’s go-to experts and on financial matters, Suze Orman believes that 2009 is a critical year for your money. And I completely agree with her, which is why this weekend I sat down and read her book, 2009 Action Plan: Keeping Your Money Safe & Sound.

 

I know Suze Orman is a trusted household name and I wanted to be sure to recap her message for you in case you don’t have time to read her book.  Below I have outlined with bullets the main ideas from each of her 10 chapters.

 

Don’t forget that the whole goal for you making the rights moves in 2009 is to alleviate the stress, fear and anger you’re feeling and replace it with the secure sense that you have done what it takes to protect yourself, the money you’ve worked for, and the one’s you love. Good for you for taking the first step and reading the action plan. Best of luck to you with your goals as well =)

 

Here is SUZE’S 2009 ACTION PLAN and WHAT YOU MUST DO:

 

  • Make it a priority to pay off your credit card balances.

 

  • Read every single statement and all correspondence from your credit card company to make sure you are aware of any changes to your account, such as skyrocketing rates.

 

  • Work to get your FICO credit score above 720.

 

  • Be very careful where you turn to help with credit card debt. Debt consolidators are often a very bad deal. The National Foundation of Credit Counseling is a smarter choice.

 

  • Resist the temptation to use retirement savings or a home equity line of credit to pay off credit card debt.

 

  • Pay the minimum amount due each month on every card. That’s your only shot at keeping your FICO score from falling further. It will also lower the odds that your credit card company will close your account.

 

  • Line up your cards that charge the highest interest rate at the top of the pile. That’s the card you focus on paying off first. Send in as much money as you can each month to get that balance down to zero.

 

  • Once the first card is paid off, focus on the second card in your pile: the card with the next-highest interest rate.

 

  • Keep up with this system until you have all of the cards paid off.

 

  • The biggest risk to your retirement security is giving in to your emotions. You may make decisions that “feel right” for 2009, but that doesn’t mean they are the right long-term solution for you.

 

  • Make sure you have the right mix of stocks and bonds in your retirement account for your age.

 

  • Do not make early withdrawals or take loans from retirement accounts to pay for non-retirement expenses.

 

  • Convert an old 401(k) to a rollover IRA so you can invest in the best low-cost funds, ETFs, and bonds.

 

  • If eligible in 2009, consider moving at least a portion of a 401(k) rollover to a Roth IRA. Or wait until 2010 and convert it to a Roth then. In 2010, everyone regardless of income will be able to contribute to a Roth. Just don’t forget about the tax due at conversion.

 

  • Make sure your bank or credit union is covered by the federal deposit insurance (this is the FDIC for banks and the NCUA for credit unions ).
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    ncua_logo-1208135202_std

 

  • Check that what you have on deposit is eligible for full insurance coverage in the unlikely event that your bank or credit union fails. Through December 31, 2009, the general limit has been raised to $250,000 from its previous $100,000, but you still need to educate yourself about the ins and outs.

 

  • If your savings is in a money market mutual fund sold through a brokerage or mutual fund firm, consider moving it to the Treasury money market fund at that company.

 

  • Build up your savings to cover eight months of living expenses.

 

  • Move all money you need within the next 5-10 years into savings. Money you need soon does not belong in the stock market (make sure you choose a high-interest yield savings account).

 

  • Separate your wants from your needs.

 

  • Get over the guilt that you aren’t “providing” for your kids.

 

  • Strike the word “deserve” from the conversation. What you deserve is irrelevant; what you can truly afford is all that counts.

 

  • Try to negotiate better terms on a car loan you can’t keep up with.

 

  • Be very careful when asked to co-sign anything, no matter how much you love the person asking you for your help.

 

  • Pledge these three things:

 

1.     Do not spend money for one day

2.     Do not use your credit card for one week

3.     Do not eat out at a restaurant for one month

 

  • Push for a mortgage “modification” if your current loan is too expensive.

 

  • Do not use credit cards or retirement funds to pay for a too-expensive home.

 

  • Stay informed about new programs, from lenders and the government, in the months ahead that aim to keep more homeowners out of foreclosure (try calling 888-995-HOPE or go to hopenow.com)
  • Build a real savings fund a HELOC should not be used as a safety net in 2009.

 

  • Focus on your home’s long-term value, not it’s price change from month to month.

 

  • If your child is headed to college within four years and your collge savings are in the stock market, you should begin to phase out of the market, so that you have 100% out by the time your child is 17.

 

  • If you have a child who will enter college in 2009-2010, look into getting a Stafford loan.

 

  • If Stafford loans are not enough, parents consider a PLUS loan. Significant changes to this program last year make this a viable option for many more families.

 

  • Stay away from private student loans at all costs.

 

  • If you are graduating college in 2009 with student loan debt, know your repayment options.

 

  • Build a substantial savings account today so you will be okay if you are laid off.

 

  • Do not go without health insurance (try ehealthinsurance.com for the largest online resource for health insurance or nahu.org if you like to work with an agent).

 

  • Shop for private health insurance if you are laid off; it is often less expensive than COBRA.

 

  • Purchase an affordable term life insurance policy if anyone is dependent on your income.

 

  • Make sure you have all of your estate-planning documents in order.

 

  • Focus on the road ahead!

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4 Responses to “SUZE ORMAN’S 2009 ACTION PLAN”

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i just got this book from the library!! can’t wait to read it but i’m so glad you outlined all the important things too haha

Um, What’s a ‘Roth’?

I just wanted to drop you a line and let you know that I really have enjoyed your well-written articles. I have bookmarked this site and will definitely be checking back for new posts.

i hate car loans because sometimes that interest rate is not very fair:~’


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