When I first encountered Suze Orman, it was on a PBS program, where she was almost-desperately trying to convince us that we needed durable powers of attorney and other legal documents, especially living trusts instead of wills. Her sense of mission hasn’t visibly lessened in the years since then. By now she has published many books and has a long-running show on CNBC. In which she acts like a caricature of herself, but that’s another story, and she still dispenses sound financial advice.
But that’s not enough for Suze. She obviously doesn’t want to talk only to the converted. She has made outreach efforts with younger generations, and with women. After her previous book had been out for some months, she offered it as a free download via Oprah’s site, and it was so successful that the hardcover book shot back to the bestseller list. She has once again teamed up with Oprah to offer a free download of her latest book, Suze Orman's 2009 Action Plan, available on Oprah's site for only a few more days.
I read it this morning. As usual, her advice is dead on. She gives one of the clearer explanations of the origins of the financial meltdown I've seen, with enough details but not too many. She tries very hard to impress upon us that the banks to whom we owe so many thousands of dollars in credit card and mortgage debt are getting ever tougher. So we need to clean up our act now, or face the inconvenience and extra expense of dealing with punitive interest rates, account closures, housing foreclosures, and more. It’s very logical and reasonable advice, and we should all take it to heart. And then act on it.
But another book I am reading, Buyology, by Martin Lindstrom, says that scientific experiments show that people behave more and more irrationally the more fearful they are. So the warnings to be ultra-careful about money just now are fueling our drive to be crazy with it instead. Is it possible that Suze's well-meant warnings might actually send people running to the mall? Or, taking it a step further, that all the talk about the obesity epidemic is just making us eat more? Because according to the research Lindstrom cites, people actually smoke more after seeing the cancer warnings on cigarette packs. What are we, nuts?
Maybe so. We’re certainly far from rational beings. Lindstrom says he wrote his book, the result of work he has collected to help clients target their advertising campaigns effectively, to tell the rest of us what weapons are now available in the marketers’ arsenal. And presumably, what we can do to combat them and our own self-defeating instincts. He claims his purpose is noble, and maybe it is. Regardless, because of him, I am rethinking the good advice I have handed out over the years, attempting to scare straight the friends and relatives whom I thought were behaving like the feckless grasshopper in the fable. The truth is that often people have such huge financial problems that all the best-meant advice in the world won’t solve them. So why attempt to terrify these poor folks who already suspect, deep down, that they are just one or two missed payments away from living on the street? Maybe it’s no kindness.
Yet people constantly ask others for advice, for help. People beg Dave Ramsey and Suze Orman, and Carmen Wong Ulrich, and anyone else who will take their calls. They describe their financial bad luck, and their willful financial follies, and they ask for help. So what is the financial guru to do? Obviously, dispense advice. Although I am no guru, some things in life have come easily to me. Such as being efficient and consistent in paying bills. When I had plenty of money, I paid my bills on time. When I didn’t, I also paid them on time, which resulted in being able to keep rather large credit lines open despite low income and high debt at one point. I feel sure that others can learn these same efficiencies, and that I can teach them. Maybe that is the hubris of all teachers, whether we are financial gurus or just plain folks.
It took many years to lure Americans into conducting all their transactions via credit cards. It will take many years to undo that mentality, if indeed it can be undone at all. Plenty of companies refuse to accept cash payments. Even some toll highway exits don’t. In the meantime, what are we to do? We can’t go wrong if we follow basic advice: Pay with cash as much as possible. Don’t overextend. Don’t live on your credit cards. Don’t run up your credit cards to try to stave off your house being foreclosed. And don’t take equity from your house to pay off your credit debt.
Suze Orman sometimes looks very concerned when she has to tell advice seekers the errors of their ways. Dave Ramsey also looks sympathetic. But they’re both tough, too. Carmen Wong Ulrich takes the reportorial approach, not really offering a strong personal line of advice. She gathers advice from experts and relays it to people who call or write in. But I think she cares as much as Orman and Ramsey do. I care, too. I wouldn’t be spending my free moments sending essays on financial sense into the Internet ether if I didn’t hope very much that you all, whoever you are, can escape the misery of being in debt. We’re not trying to scare you. We’re trying to get you to activate your own good sense and learn how to keep your personal financial house in order.