On Monday evening, Suze Orman’s America’s Money Class took us back to basics talking about money and family. While this topic has come between people for ages, Suze shelled out the no-nonsense advice on what it means to put people first, and then family. With Suze as our guide, it’s almost certain that by the end of this six week series, you will be more empowered and aware of you and your “money footprint” on the world. Get ready, it’s time for class…and as promised, here are my notes.
A reminder…The class final exam will be on Oprah.com at the end of the last class. It will be up for 24 hours and this is where you have a chance to win 50k if you score higher than 80% on the exam…so, pay attention.
- Case Study: Chris and Amy – How do you get on the same page of finances in your relationship? Amy has always let her husband deal with the finances, but with the birth of her child, she wants to be equal partners. Suze asks her, “How do you want your life to change? What has changed to make you want to be part of the finance?” and reminds us that “a woman changes her outlook on life when she has a child. She makes the change not for herself…but to protect her child.” Suze gives us a little challenge to not wait, but to want to take care of yourself. “I deserve to know,” Suze tells us to say. “A powerful woman.” Chris doesn’t want to “loose control” and “knows what they can and can’t afford.” During the discussion, some key points are revealed. Amy is not on the title of the house. Chris has a will but not a revocable trust and the will names his brother as the full beneficiary.
- Living Revokable Trust – This will help with being able to update while you are alive and will help with your estate planning.
- Money Lesson – Must have 8 months of expenses in savings.
- Suze’s Action Plan for the couple: 1. Start talking about money. 2 Increase the life insurance on Chris and buy insurance for Amy 3. Establish a Living Revocable Trust 4. Convert and start a Roth IRA 5. Add Amy to the title of the house 6. Download Suze’s must have documents!
- Suze’s Will and Trust Program – 4 Must Have Documents. A value of over $2500. Go and get yourself started!
- Case Study: Selling our house to move on. Mika and Reece – This divorced couple is living together because they can’t sell the house. They are both living there because they decided financially they thought it was the best thing to do. Suze points out that this situation is taking more away from them because neither are moving on with their lives and it’s not healthy for them or their children. Suze asks them both, “What have you lost the 2 1/2 years that you’ve been trying to sell it? What are you telling your kids? Which is more important – money or people?” Suze tells them to lower the house price until it sells or rent it out. “Get out of the situation. Do something different,” Suze tells them. Her Action Plan: 1. Lower the price of the house until it sells, 2. Renegotiate the divorce and child support arrangement 3. Move on and move out.
- Money Lesson: You are never to use money as an excuse for what’s going wrong.
- Case Study: Amanda and Brianne – This couple wants to have a child and asking Suze if they can afford it. Suze tells them, “Children are very expensive. One child over 20 years can be over $200,000.” To bring it back to money, Suze reminds them that after having the child, one of them will probably have to stay at home for awhile and asks them, “Do you have enough money to pay your bills?” Suze’s advice: Get your financial life together first and be on solid ground before you bring another life into the equation.
Audience Question- Should we set up a college savings account for our children? Suze’s advice: If you can afford it, save the money but don’t tell the kids that you are saving the money. Let them take out loans and work and be serious about their college education. At the end of college, when they graduate, you can give them the gift of not having loans. Suze explains, “Don’t let them know they have a free ride until they have gone through school and they have proven to themselves that they can do this. Do it for them but don’t let them know.”
Audience Question – I have a Roth IRA and my broker is making a lot of commission off me. How do I move it? Suze suggests, “You can move it to a discount brokerage firm that you would want to move it to.” but her bigger questions is “what do you have in your Roth IRA and how is this happening?” Suze reminds everyone, “Nobody is going to care about your money more than you do… Educate yourself so that you can be independent and making the right financial decisions.” Suze reminds all of us of her journey. Suze wrote her first book at 45. At the age of 30, she was a waitress making $400 a month. “My parents didn’t have money and none of this was expected,” Suze tells us. “If I can do it, you can do it.” (From her lips to God’s ears.)
Money Lesson: Know your investments in your retirement accounts.
- “Get control of your money. When you do, you’ll get control of your life.”
Case Study: Having enough to give to yourself – Shawana and Maurice. This couple created “The Caring Place” from their home and have taken in children over the last 19 years. Their home is open 24 hours a day. No government financing for this kids that they adopt. They are not kids going through the foster system. This couple is changing the world by opening up their home and lives to caring for these kids. Over 80 children have gone through their home over the years. Suze tells them, “You have been taking care of these kids but not taking care of yourself.” “Suze reminds the kids, “I want you as you get older to never forget them as you get older…and take care of them like they took care of you.” Suze also gave them $25,000 to help them. This will change their lives…and I hope that it grows for them. What an amazing couple.
Money Lesson: Term insurance is good for a specific period of time. If provides coverage at a fixed payment for a limited period of time. After a specific age, you are not insured anymore.
Reminder…create an action plan for yourself. Here is OUR Action Plan from Suze: 1. GO to Oprah.com and Download Suze’s Will & Trust Kit. 2. Know your retirement investments. 3. Open a Roth IRA 4. Don’t pass up free money. Contribute to your 401K plan up to the max. 5. Start talking to each other. Talk to your family about money. 6. Respect yourself and be powerful. Find your voice.