I've never known nor heard of Suze Orman only until last night. I've learned that she is an internationally-acclaimed financial expert and has been running The Suze Orman Show over the years now. I happened to view Korina Sanchez' interview on her via ANC and I suddenly became interested on the major financial advices that she mentioned in the interview.
Let me share with you what I've learned from her.
- Define your needs from wants.
Before buying anything, ask yourself first, "Is this what I need or what I want?" If it's what you want, then go pay it in CASH!
- It is a lot better if you don't own a credit card.
If you purchase something but you don't have the money to pay it in full when the bill comes, then you are in trouble. It's much better if you have debit card.
- Do not buy things to impress the people you don't even like.
Most of us now are so into buying gadgets and other expensive things because we want to go with what's "in". Especially in this hi-tech world of us now, there are lots of gadgets that are out in the market which we are not much aware of that there comes newer models in less than a year. Let's say we buy IPAD now, then IPAD 2 eventually comes out. So our tendency is to go for a newer and much better ones. Little that we know that we don't need them so badly. We just want to have them because we want to impress other people whom we don't even like. And in return, we are the ones suffering in paying those unnecessary things.
- A vacation is not a "happy vacation" when you use your credit card.
Nowadays it's just so easy to book domestic and international flights online using credit cards. There are lots of promos and seat-sale available which tingle our mind and can not stop us from availing. Well, it's just one easy step-- though credit card. But what if the bill comes before or after the vacation and you don't have the capability to pay that in full, do you think the vacation that you've been wanting for is totally a bliss? Maybe you'll consider it as a misery :-(
- Five members of the family should not be dependent to one member; it should be the other way around.
It is not good that only one member of the family provides for the rest. It doesn't necessarily mean that all should be employed; but everyone should have the source of income to contribute to the whole family. We all have the capabilities to work, either be employed or do an entrepreneurial job which we could be the boss.
- Teach your children the value of money.
The world is designed that we must work to get paid. It is more advisable that we teach our children as early as possible how to earn money. Don't give them allowance; instead allow them to do some of the household chores and in return they'll get paid. Start from giving them light chores and pay them 2pesos. Then before they earn much larger money, they have to undergo first from lighter to heavier chores. In that sense, we instill in their minds that we have to work hard to earn money, and eventually they will learn to spend wisely.
- Do not be afraid to talk financial matters with your family.
Our family is our immediate source of strength and they are also one of the main reasons why we want to earn money. We provide for them and thus, it is just right to be open to our family. We should not be afraid to discuss our financial status with one another and so everyone could adjust and help us.
As early as possible, we should be able to let our kids know our financial abilities. What we show them is what eventually they will become. If they see us purchasing expensive things, it will be implanted in their minds that they also will do that because that's what they see in us. Let's help our children define who they are by what they have.
- Between buying or renting a house...
Evaluate yourself first: Am I able to pay for the amortization fees, monthly dues, government taxes even if I lose my present job??? If yes, then buy a house!
- Invest in health insurance.
Most of us prioritize to have life insurance to secure our family's future in case we die; but we don't even know that usually before we die, we get ill first. When we get hospitalize, who will pay for our bills? It's still us, so it's better if we secure to have health insurance so that anytime we get sick we'll be able to afford medication.
On the other hand, it is still right to get life insurance so that we will be at peace that they are financially secured when we die. But always remember that we should not list our minor family members as beneficiaries because they won't be able to claim the benefits as long as they are still minors.
- Invest for your retirement.
It is not bad to save for yourself even if you have a family to provide for. You've been working hard every day and it is your right to have savings for yourself. Suze Orman has been alarmed by our culture of sending/giving all the earnings that we have to our family. Most of the OFWs have this manner that they don't save up for their own selves. So when the time comes that they can't work anymore and have to go back to the Philippines, they don't have the money to use for their selves. It will then be an additional worry to your family.
- A life worth living for is a simple life with our own house, savings, no debts at all to worry about, and still able to contribute to the church and other community organizations who are also helping us in our lives.
