Originally Posted by koland
Yeah, it's the same old advice, but updated!
Actually, for Suze, it's a change. She finally tells you to pay off your credit cards first, before trying to build an emergency fund (but don't close them, as that lowers your FICO score, which can affect rates and ability to get a rental when you lose the house). Always before she had people building a fund while paying off cards and paying little cards off to "feel better" - now it's the much better fiscal advice: pay off all your high debt first, eliminate all WANTS from spending until all non-secured debt is gone (credit cards, loans against 401K's, etc). Don't stop putting money into retirement accounts (after all, this is your chance to use a way-back machine and buy at 1998 stock prices).
Basically, quit being a baby and buying everything on impulse, get out of debt and build up an 8 month nest egg (her estimate of how long you'll be out of work if laid off).
Oprah's show had 225 people with CC debt, totaling over $2.29 million. About $10K each, but they also had ringers there that had written in (on gal had $80 in CC debt, plus had borrowed about 30K from her 401K; another couple had about 80K in CC debt and $200 in savings, no retirement, etc).
Here's her challenge:
1) Don't spend any money for a day. (this one's easy, we go many days
without spending, so I'll pick one and call it done).
2) Don't use any credit cards for a week. (a little harder, but we'll just fill up the car and then stay home a week and off of amazon; of course, that mean's I'll pay more and use more gas to buy locally and spend cash ... maybe this one doesn't really work for us).
3) No restaurants for a month (I think her entire audience gave up at this - Actually I've done this many times, long ago due to both habit and expenses and more recently for other reasons. At the least, it'll vastly lower the food poisoning cases in the US and those who do this will probably save at least $300 per person per month, since you can easily eat for $10 less per day vs. just one meal out a day; some may save a thousand a month per person).
I'm actually really good financially- one credit card that gets paid off every month, and I have a budget, an emergency fund and other funds. But sometimes in these books there are little hidden gem ideas.