Orman cautions compiling debt

Jessica Roblin

Students must become own financial expert

WATCH TV2 multimedia reporter Heather VacLav’s exclusive interview with Suze Orman.

Suze Orman told a full ballroom last night to think “FICO first, then sex.”

FICO, which stands for Fair Isaac Corporation, is a score ranging from 300 to 850 that is determined by many factors relating to payments and debt with a person’s credit card. She said this score can determine the rest of one’s life.

“Every move you make, big brother is watching,” Orman, an internationally acclaimed financial expert, said during her speech.

Orman advised that a person’s best financial expert is him- or herself. Learning about FICO scores, credit card use, student loans and emergency funds is how to become one’s own financial expert.

“What will make you powerful is when you are powerful over how you think, feel and act with your money,” Orman said.

Orman gave the following ways to take control and be this personal financial expert:

• Visit www.suzeorman.com or myfico.com to find out more about what a FICO score is.

• Be smart with a credit card. If students are already not able to pay credit cards off in full each month, this is trouble, Orman said.

Interest rates are reaching 32 percent. Poor credit records lead to a bad FICO score. A low score makes it hard to get a job or house. This score is your financial SAT, she said.

“Don’t think it can’t happen to you,” she said to those who don’t have credit card trouble currently.

She reminded the audience that small purchases add up and only paying the minimum is serious trouble.

• What you have matters less than the values of who you are. She stressed that a person can be perfect no matter what their job is, what they are wearing or what they buy.

• The most important monthly debt to pay should be for student loans.

“The longer you don’t pay it, the better off they are,” Orman said about those in charge of loans for students. This debt is a burden, and future employers see this weakness in a person fresh out of college.

• Set up an eight-month emergency fund just after graduating. To find out the amount right for this fund, visit saveyourself.com. This simple test will determine how much to set aside for the emergency fund.

• Never buy a new car that takes more than three years to pay off. Once the car is driven off the lot, its value drops 30 percent.

• Invest in a retirement account like 401(k) or 403(b). If a company is willing to match investments, say yes, Orman said.

“They are giving you free money,” she said.

Orman’s tips based on the country’s current economic state helped many of the students that made up the crowd of more than 200 people.

“I wish I would’ve known that before,” senior finance major Genice Roberts said about what she learned.

She isn’t the only one struggling with finances.

“I don’t use my credit card anymore,” senior communications major Stella Sule said, adding that Orman’s explanation of credit card debt was “a big shocker.” She was also blown away when she learned about a car’s depreciation.

The crowd gave Orman a standing ovation at the end of her wise words.

“If you educate yourself and you look – are you kidding – the doors have just opened for you students,” she said. “We will be a society of hope again.”

Contact student affairs reporter Jessica Roblin at [email protected].