Lexington, KY - Suze Orman feels your pain: "I bet you are scared. Angry, too. And confused. These are absolutely rational and appropriate responses to the global credit crisis that erupted in 2008 and continues to send tremors through every household in America."
That sense of 'I understand and here's what you need to do' from these opening lines of her new book is exactly why Suze Orman's 2009 Action Plan: Keeping your Money Safe and Sound, has hit the top 10 on most best-seller lists across the country.
Suze Orman coaches us to confess to our worries: years of savings have vanished from our 401ks, retirement accounts may never fully recover, unemployment is rising, and government bailouts may not work. Confess to your worry, she urges, despite how overwhelming it may seem. Then, buck up and take action.
And Orman is there as our coach, trusted counselor and friend. She expresses the rage many of us feel at the current financial situation.
"I cannot overstate my wrath at mortgage lenders that pushed toxic loans on borrowers, knowing there was little chance they could honestly afford those loans," she writes in her introduction. "I cannot absolve those who chose to drink the Kool-Aid that they could buy a $350,000 house on an income that could pay for only a $150,000 one."
Orman helps us vent our frustrations, but she doesn't stop there. She tells us that in 2009, we must stop being dishonest with ourselves about our financial situations and get a grasp on the reality that the rules have changed. This year, she says, is critical for your money.
"There is to be no curling up in a fetal position on the couch in 2009 and hoping that when you emerge the crisis will have passed," she writes. "You will have to get off the couch and take control of your financial life in 2009."
If you're assuming that the government bailout or a Wall Street rally will fix everything, Orman says, think again. If you do nothing in 2009, odds are you may be in deeper trouble in 2010.
Under the banner of "the new reality requires new strategies," Orman lays out a plan of what to do, when, and how. Depending upon your current situation, there may not necessarily be wholesale changes necessary in your financial life, but there will definitely be tactical actions that must be taken, she says.
While Orman may be preaching new realities, the road to redemption is paved with many of the same sins she has talked about for years. First, and foremost is credit, specifically credit cards. National credit card debt is at $970 billion, 50 percent higher than the last economic slowdown in 2000. However, she says, "The game is up, my friends."
The first priority you must make in 2009 is to pay off your credit card balances, Orman insists.
This advice has long been the cornerstone of Orman's financial advice and she has often faced criticism for focusing on debt reduction. Now, she says, the credit crisis has dramatically affected the world economy. The actions of the little people matter, she says to her critics. "If we'd cared enough to keep the little people out of debt they couldn't handle, the global economy wouldn't be in the mess it's in."
After kick-starting our attention on credit, Orman outlines action plans on the topics that should be of most concern to us in the new reality. These include retirement investing, saving, spending, real estate, paying for college and protecting your family and yourself. The topics under these headings are broad, ranging from finding ways to save on insurance to job-loss strategies. Each action plan includes a "What you must do in 2009" list followed by a list of advice on specific situations.
It is a Herculean task to cover so much ground, but Orman, accomplishes it in her usual straightforward style. Under the Credit Action Plan, she gives advice on what to do if you are never late on credit cards, pay the minimum, and still have your limit reduced. In the Retirement Action Plan, she tackles the question whether you should keep investing as your 401K goes down each month.
Orman's book is priced for the new realities of 2009 - ten bucks. And while Orman tells us to "separate wants from needs" in our spending practices for the year, this book of action plans should definitely fall under "needs."