Review: The Money Book for the Young, Fabulous & Broke

We have a confession to make: Suze Orman scares the bejeezus out of us. Her voice, the way her face contorts into a million expressions, it feels like she’s right in our living room giving us a lecture on bad money management. But we have to admit that there’s some perverse pleasure in watching her show, especially when she invites a guest viewer to pour out his or her financial woes. It’s like watching a lion tearing into a bunny rabbit. It makes us want to bleat, “Just say you’ll stop using the credit cards, just say it!”

That’s why when we came across her book, The Money Book for the Young, Fabulous & Broke on Amazon, it took us some time to consider buying it. But despite her rather grating nature, we have to admit that Suze does dispense some excellent advice, and we like her brand of tough love. Her mantra is that life comes first and money second, but in a sensible manageable balance, so if your life philosophy falls in her line with her thinking, you should consider picking this up.

The Money Book for the Young, Fabulous & Broke is targeted at young adults that have just graduated or have graduated for a number of years and are at the beginnings of their career and need some quick, but useful answers about their long-term future. Designed in an eye-catching and easy to read way, the chapters are delivered in a question and answer format, so you can always skip a question that doesn’t apply to you and come back to it later.

Chapter 1: Know the Score - The first chaper is all about your credit score: what is it, how it’s defined and what you can do to improve it. Savvy folks will probably already be familiar with credit scoring, but Suze bats away confusing and conflicting advice and focuses on what really matters in raising your score.

Interesting problem: I’ve been told that too many lenders checking my FICO score can actually hurt my score. I am not clear how I am supposed to comparison shop without causing my score to drop.

Chapter 2: Career Moves - This chapter is good for those who are are looking for their first job or have been working for a few years and are concerned about their long-term career. The Money Book for the Young, Fabulous & Broke touches on important goals such as investing in yourself and carving a name, as well as tricky topics such as negotiating raises and changing careers. The ultimate goal is to do something you love.

Interesting problem: I really want to change careers, but I am afraid I won’t be able to pay my bills, especially if I go back to school.

Chapter 3: Give Yourself Credit - In a surprising change of tone, Suze doesn’t come screaming at us about the evils of credit cards in this chapter. In fact, she accepts that credit cards can be a lifeline when you’re YF&B (Young, Fabulous and Broke), but only when used in a safe and sensible manner. She gives us the credit 101, from picking cards to transferring balances to being responsible for your credit card debt.

Interesting problem: I am drowning in so much credit card debt that I feel like bankruptcy is my only option.

Chapter 4: Making the Grade on Student Debt - Student loans are the biggest type of debt saddling young adults today and tackling it can be daunting and frightening. The Money Book for the Young, Fabulous & Broke lists the different options that can help you understand and manage your student loan including interest rates, removing variable rate stress through loan consolidation and picking your payment schedule.

Interesting problem: I just got married and both my spouse and I have student loans. Should we pay them separately or consolidate all of our debt?

Chapter 5: Save Up - This chapter touches on creating a savings account and building up a nest egg. Suze suggests ways to cut down on living expenses and offers tips on saving that won’t impede your lifestyle. She also doesn’t encourage making budgets due to the time it takes to do them. We’re not sure we agree, from success stories budgeting has been one of the keys of debt recovery, but perhaps she intended to soften the blow of frugality.

Interesting problem: I want to start my own savings account, but everyone tells me I should pay off my credit card debt first.

Chapter 6: Retirement Rules - The last thing you would be thinking about after graduation is retirement planning, but we’re impressed that The Money Book for the Young, Fabulous & Broke stresses that this should be one of your biggest goals when managing your finances. She puts emphasis on the time factor: when you’re young, you have time for compound interest to do the legwork for you.

Interesting problem: I don’t have the money for a home down payment, so I’m considering withdrawing money from my Roth or 401(k), since I heard I won’t get hit with the typical 10 percent early-withdrawal penalty.

Chapter 7: Investing Made Easy - The next few chapters talk about more complex finance matters like investing, cars and homes. Suze gives YF&Bers the 101 on investing: growth stocks vs value stocks, mutual funds, managed and unmanaged funds complete with an action plan to make it work.

Interesting problem: A mutual fund I invested in five years ago is down 30 percent from my purchase price, I don’t want to sell it until I break even.

Chapter 8: Big-ticket Purchase: Car - This chapter is full of great advice on purchasing a car. The Money Book for the Young, Fabulous & Broke gives first-time car owners a big wake up call. Forget about the BMW, stick to a late model auto and shop at banks and credit unions for a good car loan that you can manage.

Interesting problem: I can only get a 10 percent interest rate on a car loan because my FICO score is so low.

Chapter 9: Big-ticket Purchase: Home - Suze helps you navigate the complex process of purchasing your first home. It talks about down payments, closing costs, and shopping for a mortgage. It may not be applicable to you yet, but Suze breaks it down in easy bite-size chunks that you can keep for future reference when it’s time to make the biggest investment in your life.

Interesting problem: A starter home where I live costs at least $330,000. The only way I can afford that is to take out an interest-only loan.

Chapter 10: Love & Money - This was one of our favorite chapters of the book and its philosophy rings Suze all the way. It’s a great read for those who are considering moving in with their partners or are thinking of wedding bells. Money and love can mix, but only if your financial values rest on the same page.

Interesting problem: I am dating someone who I really like personally but hate financially. I can’t deal with the debt, bounced checks and crazy spending.

Verdict: 8/10

The Money Book for the Young, Fabulous & Broke is a great book for those who are coming to terms with financial independence and need a guide on how to manage their money. Even if you don’t fall into the target age group, The Money Book for the Young, Fabulous & Broke will provide a firm foundation in the basics of personal finance. In our opinion, this would make a lovely graduation gift!