Credit Cards, Debt, Financial Independence, Saving
October 25, 2020
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There is a storm affecting Suze’s ability to send her podcast today. Suze presents this special "Best Of" from November 1, 2018, where she and Sarah ask and answer an important question.
Suze Orman’s Women and Money podcast is proudly sponsored by credit unions; a safe home for your money, rain or shine. Hi, everybody, you're listening to the Women and Money podcast, kind of, Suze O. here. Now, listen to me, we have a change today, and the change is very simple. Because there is a serious storm in the Bahamas, I'm not able to transmit a normal podcast. So, therefore, I've called Robert and Robert is on the phone with me right now because it's the only way I can transmit out. And I said, Robert, let's do a "Best Of" today and so that's what we're going to have to do because of the weather. So, Robert, do you have the "Best Of" that we should do? I absolutely do, Suze. How about we do "Keeping Good Company" which originally was posted on November 1, 2018, so two years ago. Can you believe it was two years ago, Robert? Oh, my God. And we're still working together. OK, now, he's one of the men smart enough to work with me everybody, but I hope you understand, we weren't expecting this on any level, but hey, it happens. So, I hope you understand, but tune in on Thursday like you always do for Ask Suze Anything with KT. And in the meantime, enjoy "Keeping Good Company." Today on the Women and Money podcast, I want to talk to you about the people in your life, the people that you keep company with, the people that you choose to have around you, the people that you've married, that you're in a relationship with, that you hang around. Just people. Now, why is this important when it comes to your money? It's important because one of the laws of money is that you have got to keep good company. If you keep company with people who are wasting money, disrespecting money, spending money that they don't have, getting you to do things with your money that you don't want to do, I am here to tell you you will see your money go out the window. It will fly away from you. But when you surround yourself with people that are respectful of money, that don't have debt, that live below their means but within their needs, that do that which they need to do with money, their actions reflect back on you, and you tend to start to be more respectful with your money as well. Now, the area in your life that this is really the most important is when it comes to the personal romantic relationships that you have. So, I am now talking to all of you out there who are dating and you're dating somebody that you're in love with, they're kind to you, you like them in every possible way. However, when it comes to their money, they are an emotional, financial, chaotic mess. But yet you overlook everything that's going wrong with them simply because you love them, and that's what women do. Listen to me, ladies, love is not enough. What you have to do is you have to like everything about the person that you are thinking about becoming romantically involved with. And here is what is so sad. You all seem, when you get into a relationship where you may have your act together and the other person doesn't, you just seem to say, it's OK, I'll take care of them, I'll change them, I'll make sure everything's OK. You are not strong enough to change anybody else, you are barely strong enough at this moment in time, possibly, to even change yourself. But you have got to put yourself first. You have got to put your needs first, you've got to put your family first, and your children first over any possible relationship that you may get into. Now, why do you think I'm so hard on everybody? You know, sometimes I get emails from you going, Suze, you can lighten up about this, it's OK, it's not that big of a deal. Oh, yes, it is. You have got to understand that money is a physical manifestation of who you are. And I'm going to say this over and over and over again on this podcast. Money is a physical manifestation of who you are. You are the one who goes out and earns it, invests it, spends it, wastes it. And if your money is a mess, so are you. So when you're dating somebody, you're in a relationship with somebody, and you see them overspending, over tipping, doing crazy things with their money, you have got to ask yourself the question: Why do I stay? Why do you stay in a relationship that financially it is just not good for you because it will be one of the biggest mistakes that you ever make? You have got to start valuing yourself, you have got to start valuing every single moment you spend of every single day, and you just can't do something because it's easier. I always say it's better to do what's right versus what's easy. Sometimes it's easy just to stay, sometimes it's easy not to do anything and trust me, I get that. You know you would think that I'm a really, really powerful woman, and I am, but I wasn't always that way. You know, I had my act together, financially speaking now for years, but for some reason, prior to the age of 50, I chose the biggest losers to date I could possibly pick. They didn't care about me, they didn't do it, you know, they were just, it was just so ridiculous, I can't even tell you. I even was in a relationship for eight years with somebody who disrespected me, was a financial loser, lived off of all of my money, was never nice to me, didn't honor me or respect me in any possible way, took me for granted, and yet I just stayed. I stayed. Why did I do that? I stayed until I was 50 years of age. What a waste of time. And thank God I finally decided that at the age of 50 I was not going to enter my 50th year living a lie, living in a situation that wasn't good for me. I could provide for them, they couldn't provide for me. They didn't care about me, they only cared about my money. Are you kidding me? So I got everybody out of my life when I turned 50 that wasn't good company, who didn't respect me, who only cared about my money and didn't want to be there with me for the right reasons. And ever since I did that, I've had a love in my life now for 18 years, I've never been happier before ever, ever, ever. And oh my God, what can I tell you, my life is just perfect, but it wasn't always that way. So, you can have wealth but wealth means absolutely nothing if you don't have inner wealth, if you don't have inner power, if you can't make the choices that you need to make for yourselves so that you can be more, you can be happy, you can be secure, you could be vital, and you could be the strong women that you were all born to be. So that is just something I want you all to think about. So now, all of you are familiar with Sarah, my co-host. Sarah, when you hear me talk about keeping good company, do you keep good company? I do now, Suze. You know, about five years ago I wasn't keeping good company and I had to do a small, you know, relationship purge, frankly. I had come out of a romantic relationship that all of a sudden I realized a lot of the people around me weren't great for me, weren't good influences for a whole lot of reasons. So now I do, I took that lesson and I applied it to all of my relationships and really took a hard look at who's in my life and what value they're adding and what value I'm adding to them as well. So, let's start now with what people want to know. What questions do they have in regard to keeping good company? All right, so our first question today, Suze, is from Renee who wants to know how do you handle it when you're in a relationship and when you talk it sounds like you have the same values when it comes to money but you seem to spend in different ways. What questions should Renee be asking? How does she reconcile actions versus words? Renee, actions speak louder than words. You can lie through your teeth looking at somebody. I remember when I was younger, I always had this thing, I knew I had this feeling about them and I would look at them and they would lie right to my face and I would believe them. And years later it would turn out how I was feeling was absolutely correct, they were lying. So it doesn't matter what people say, all that matters in life is what people do. Actions speak louder than words. So it's not about what kind of questions should you ask? What kind of things? Whatever this person is doing that is showing you who he or she really is, that's all you need to pay attention to. There are no words that can replace what you are seeing. So if you're seeing that, what you don't like, that's what you need to take action on. Next question. It comes from Charlotte, she and her boyfriend are starting to talk about moving in together. As they take this next step in their relationship she wants to know what kind of questions she should be asking about his financial situation. What should she be sharing with him? What do they need to find out about each other? What questions should she ask? You need to be as financially intimate with him as you are personally intimate with him. You know if he leaves the toilet seat up, you know if he's sloppy, you know does he do the dishes? You know all these personal things about him in bed, you know all this stuff. What do you know about him financially speaking? You should know his FICO score, his credit score, you should absolutely know how much credit card debt he has, you should share your credit reports with one another. You should not take each other's word for it by any means. You should say, let's have a really unusual date, let's sit down and let's go and order our credit reports at www.AnnualCreditReport.com, they are absolutely free. Let's check our credit scores on www.CreditKarma.com just to get an idea. If you want your true credit score, you would go to www.MyFICO.com, that's where you really get one that all the banks use. You would look at every one of those things, and you would go through that paperwork with him or her and it's in that paperwork that shows the truth because again, remember what I said, I think it was to Renee, words can lie. You know, when I used to do The Oprah Winfrey Show all the time. People, for whatever reason, used to lie to come on that show, and they would make up these horrific or whatever situations they were in, financially speaking. I would run all the data on them, obviously with their permission, and nothing that they told me it would be true. And of course, they were never a guest. So, you need more than to ask those questions. First, start with what's on paper and see what's true. After that, if you like what you see there, then you need to start asking questions. How do you feel about paying for your family? What do you think about giving gifts to your family? What is your idea of savings? What are your goals? Every personal financial question that you would want to know. How are we going to split bills? How are we going to do this? What's the situation here? Do you want to have kids? Do you want to send your kids to private school? Every single thing and then you'll get a good idea do your values match one another? Now, sometimes somebody can say something, and it can change over time. So, you keep checking in, and by the way, every single year you should check the credit reports and the scores because you never know when one of you will start to go off the wagon, so to speak, and get a secret credit card. How many people in the 14 years of The Suze Orman show did people call in after they had been married for a long time? I just found out my wife or my husband or my spouse has, like, all this credit card debt that I never knew she or he had. Every year you do this, Sarah, not just once at the beginning of the relationship, and then just pray and hope it's going to be OK forever because again, people change. You do it forever, once a year, twice a year. I mean the pray, the pray, and hope, I feel like this is what everybody does with their money, particularly when it comes to romantic relationships because it's so scary to talk to the other person. They just pray and hope everything's going to be OK, which obviously is a ridiculous strategy. Yeah, I always say hope is not a financial plan and the fear that people have. You know, everybody, this last weekend I was actually with Sarah in San Francisco. It was KT's and my 18th anniversary, and we had these friends all together, and we were having a great time. And Paula, who happens to be a very distinguished lawyer in her 60s and has quite a nice sum of money, writes me the other day, Sarah, and do you know she said to me? She said to me, I like making money, I just don't want to have to deal with all this money. I just wish it just wasn't even there sometimes. It's OK, I love working, Suze, and she makes a lot of money, but I don't want to deal with it. So, how do you deal with somebody else's money when you don't even want to deal with your own money, ladies? Do you really love to open up those statements, look at your balance, making sure everything is exactly how it should be? I mean, one of the things that attracted me to KT is I would watch her open up her bank statements and I'll never forget this, if there was a charge on there, she got charged $25 once for something that she didn't even do. She tried to call the bank and couldn't get through. She literally went down to that bank and made that $25 go away. That's how much Miss KT treasures money, values money and it doesn't matter how much money we have, every single penny counts. And trust me, we still count every single penny. Next question, Sarah. The next question is the other side of the coin. It's from a woman called Meghan and she says it seems like money is the reason a lot of people break up, which is true. So, she's newly dating somebody and she wants to know what are the early things she can look for at the very beginning of her relationship to know if they're compatible with money before she gets in too deep with her heart she says? OK, again, Meghan, it's the things you have to look for. Does he or she leave a really large tip? Do they like to bet? Do they want to always say, let's go to Las Vegas? Let's get in a poker game, let's do this, let's do that. Do they have a shoe fetish? Seriously, shoes normally tell the story. If somebody loves to constantly be buying shoes, warning sign, warning, warning. Are they able to go into a store and just look and not come out with something? Is that possible for them? Next, and this is a big one. If they have a car that looks like a trash can. If you go into their homes and their closet has all of this stuff in it that still has price tags on it. If you look in their basement or their attic or whatever, and you see boxes that have never been open. If you see that they have stuff just coming out of their drawers, they have junk everywhere, you know, and their house is overrun with stuff. I'm here to tell you, those are all warning signs. That's somebody that could either be a financial hoarder, meaning they have to spend money on things, and they have to just keep those things because they think those things define them versus they define the things around them. Those little signs, like that of the physical surroundings of somebody, are key to you because if you see that, I will guarantee you nine out of 10 of those circumstances, those cases, that person has credit card debt. Why? Because if you can't respect what money can buy, there is no way that you can respect money itself. It is just that simple. One more girlfriend.All right, the last one comes from Genevieve and she says...this one's taking a serious turn, Suze. My boyfriend and I have a baby, and we just moved in together, we've been dating for two years. He makes considerably more than she does and expects her to take care of the child, work, pay 50% of everything, but she says it's really hard. She feels like she's not able to save, and she's very concerned about the future of her baby and her own personal future and she wants to know where she should start. Here's where you start. He's already given you a sign that he doesn't care as much as you think he may, and thank God, believe it or not, he's only your boyfriend versus your husband because then it could get very, very difficult. But listen to me closely. It should not be 50/50. It should be, however, equal percentages of your take-home pay. Let's just say you take home $3k a month and let's just say your boyfriend takes home $7k a month. And let's also say that your joint expenses are $3k a month. If it were 50/50 you're going to put in $1500 which is 50% of what you make. But $1500 for him is like 20-25%, it's not a big deal for him and that's not equal. So here's what you do, you take your take-home pay ($3k) and his take-home pay ($7k) and you add those together. That is $10k and you divide that into your split expenses, the $3k -- $10k into $3k is 30%. That means you each pay 30% of your take-home pay into that joint shared account. 30% of $3k is $900 a month, 30% of $7k is $2100 a month. There is your $3k, equal percentages, but a vastly different amount of money. $900 versus $1500 is a $600 difference to you, and that could go into savings and to take care of your baby. If he doesn't go for that, if he doesn't see the logic in that, you already have problems and you should probably think about going on and doing something different because he either wants to take care of you or he does not. And it's not taking care of you where he's really spending more, it's equal percentages, again, not equal amounts of money. And if somebody doesn't want that, that is not good company. Leave it and leave it now. That's the end of our questions before we go to our caller, but, you know, I wanted to say to you what I was hearing in all of these answers we've talked about this a lot before. These habits of wealth and the two that came up over and over again are one, courage. The courage to have some of these conversations, to say what you think, to do what you feel. And cleanliness and I maybe at the beginning of the conversation wasn't expecting that, but cleanliness is such an important habit of wealth when it comes to relationships. Well, here's the thing. There are eight qualities of a wealthy woman, and courage and cleanliness are two out of the eight. So what do you say, maybe next week or the week after that, we do a podcast on the eight qualities of a wealthy woman? That's what we need to do because all of those eight qualities need to be ticking all together for true wealth to come into your lives. What do you say, should we do that for next week? Yeah, I want to do that next week because I think that it will make a great conversation for women to have with us. Then let's do it. All right. What do we have for our caller today? Antoinette is on the line and she's dating somebody she knows is bad with money and she wants to know, should she stay or should she go? So with that, Antoinette, I've got Suze for you. I have a friend who's 51 and I'm 42. He's single, no children, previously divorced in October. I'm a single mother of five, I'm a veteran and he's in the National Guard. My issue is the debt that he carries. He's like $25k behind on the house, he hasn't paid it in over a year and a half. There is an SUV that he hasn't paid in a year and a half. He still has both, surprisingly, and credit cards, barely making it to make ends meet because it's hard to get a job when you're not on active duty for the National Guard. Whereas with me, I own my house, I have no problem paying any of my bills, I'm actually very settled and working. I just paid off one of my cars. My two children have cars, but I don't lack for anything, thank you, Jesus, I don't like for anything. So, my issue is, do I continue to try to help without giving up my finances or put myself out there to get hurt or used, do I just patiently wait for him to get himself together at 51? Or, should I just cut my ties and go on my way? Listen to me and listen to me closely. If one of your kids came home and they introduced you, let's say your daughter introduced you to a man exactly like this man. And you saw everything about this man exactly like you're seeing it now, what would you tell her to do? Uh, no, ma'am. You can do better. You need to find someone who can meet you or beat you. All right, now, if you would tell that to your daughter, what is preventing you from telling yourself that exact same thing? Ooh, that hurts. Because I see all the other stuff about him, he opens doors, he's caring, he cares about me, he cuts grass, washes cars, does everything around the house, even caters to me physically. It's just financially, he's not here. Yeah, but here's the thing. How many times have I said that self-worth equals net worth? If somebody is a financial, chaotic mess, that means they are an emotional mess, and maybe they cover that up with opening the doors, being good in bed, whatever it may be. But the truth of the matter is, when it really counts, when they are totally disrespectful and irresponsible with their money, they're behind on a mortgage payment, they're behind on their car payment, they're behind on all of these things. And yet, they still act like this big shot and like nothing's wrong in their life. When one day he's going to walk out and his car will be gone. One day he'll come home and there will be a padlock on his door. All those things they're going to hit him at once and you know that and I know it. And don't think that I don't already have the feeling that when you go out to eat, you pay it for it, when you go on a vacation, you pay for it. What you want in a male counterpart or a, you know, in a relationship is somebody who can take care of you financially if you can't take care of yourself. You're in an accident, you get sick, something goes wrong, you can't work, you've now gone through all of your money. He'll be gone. He'll be gone faster than the wind, faster than a New York minute. All right? So, if I were you, I would do what deep down in my gut, I would tell my daughter to do. Stop disrespecting yourself, stop settling for less, stop feeling like this is the best that you can do. Because I'm telling you, Antoinette, if you have what it takes to have been doing great, to be OK, financially, having raised five kids, having done all of this probably on your own, correct? Yes, ma'am. All on your own. What are you, crazy? You raised five kids on your own, and now you want to be in a relationship with an adult kid who is financially irresponsible? You don't need any more kids, you already have five kids. So here's the bottom line. You got to get honest with yourself, and you've got to really ask yourself and answer this question: Why don't I value myself as much as I value my kids? Why am I showing my kids that it's OK to get into a relationship with somebody who financially, can't even afford to take us to McDonald's, and they're never going to be able to afford to do so? It's one thing when you meet somebody and they are a financial wreck, but you see them turning everything around. You see them being honest, you don't see them driving around in a big SUV that they haven't paid for. It's probably a big SUV, right? It is. It is. Uh-huh. You don't see them driving around in this fancy-schmancy car and all, and living in a huge home, simply to impress all these people even though he doesn't have a pot to pee in. You see them getting rid of everything, getting out of debt, not going out to eat, not taking money from other people, and doing it on their own. And that is not what you see from him. How long have you been with him? I've been knowing him for two years but with him for less than four months. For the last year and a half, I've been helping him go through the process of trying to get his finances straight. He got rid of one truck, trying to help him get on track with the house, and trying to get finances together. But did he get his finances together? Oh no, he paid off maybe four credit cards but he's still got maybe $200k worth of debt. He has $200k in debt, behind on his mortgage, behind on his car payment, and you're behind him. I don't think so. Again, bottom line, you can stay if you want to, but one day you're going to look back and you're going to say, why didn't I listen to Suze? I wasted all of this time. There are incredible people out there who are responsible with their money and maybe everybody listening is saying, Suze, you can't judge people because they're irresponsible with money. Oh, yes, I can. How you act with money is a direct correlation with who you are. You have to do something to change your life, people. You have to take action, so this is the do-it moment for this podcast. I want you to write down the names of all the people that you have in your life that aren't good company. And I want you to write down the reasons why they are not good company. Do they disrespect you? Do they disrespect their own money? Whatever it may be. And then I want you to think seriously about why do you keep these people in your life? Now, this is not going to be something that's easy for you to do because your tendency is going to want to be oh, it's all right, it's not that big of a deal. I'm going to say it again, it's a huge deal. To keep good company means you only have good people around you, and if you were even able to make a list of people and the reasons why they aren't good company, that says a lot. So, you might want to make a decision to stop having those people in your life. It's not as hard as you think it is, and once you've done that, I promise you you're going to feel so much better it's not even funny, so just give it a try. Hi, I'm Sarah, and I'm Robert, and we're from Suze Orman's Women and Money podcast team here to tell you that Alloya's member credit unions are so proud to have brought you this episode. You know, Robert, credit unions live by a people helping people philosophy. Absolutely, Sarah. And that means when you bank with a credit union, you can trust that they have your best interest at heart. The fact is, regardless of circumstance, a credit union will have your back and keep your money safe, that's the credit union promise. Go to www.MyCreditUnion.gov to find a credit union that fits your needs. That's MyCreditUnion.gov. In providing answers neither Suze Orman Media nor Suze Orman is acting as a Certified Financial Planner, advisor, a Certified Financial Analyst, an economist, CPA, accountant, or lawyer. Neither Suze Orman Media nor Suze Orman makes any recommendations as to any specific securities or investments. All content is for informational and general purposes only and does not constitute financial, accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any loss, which may arise from accessing or reliance on the information in this podcast and to the fullest extent permitted by law, we exclude all liability for loss or damages, direct or indirect, arising from use of the information.
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Answer Yes or No to the follow statements.
I pay all my credit card bills in full each month.
I have an eight-month emergency savings fund separate from my checking or other bank accounts.
The car I am driving was paid for with cash, or a loan that was no more than three years, and I sure didn’t lease!
I am contributing at least 10% of my gross salary to a retirement plan at work, or I am saving at least that much in an IRA and/or regular taxable account.
I have a long-term asset allocation plan for my retirement investments, and once a year I check to see if I need to do any rebalancing to stay on target with my allocation goals.
I have term life insurance to provide protection to those who are dependent on my income.
I have a will, a trust, an advance directive (living will), and have appointed someone to be my health care proxy.
I have checked all the beneficiaries of every investment account and insurance policy within the past year.
So how did you do?
If you answered yes to every item, congratulations. If you are working on improving on a few items, I say congratulations as well.
As long as you are comitted to truly creating financial security, I applaud you. If that means you are paying down your credit card balances, or are building up your emergency fun with automated payments, that’s more than fine. You are on your way!
But if you found yourself saying No to any of those questions, and you’re not working on moving to Yes, then I want you to stand in your truth. No matter how good you feel, you have some work to do before you can honestly know what you are on solid financial ground.
Credit & Debt, Saving, Investing, Retirement