Suze Orman is arguably one of the most-recognized financial experts in the country. Described as “a force in the world of personal finance” and a “one-woman financial advice powerhouse,” this two-time Emmy Award-winning television host, New York Times bestselling author and motivational speaker has helped many people get their financial lives in order.
Orman’s fans turn to her for frank, practical advice on everything from daily budgeting to estate planning. But Orman’s advice is often targeted at women, encouraging them to “save themselves” by saving more money and getting involved in their financial lives.
One woman in particular who found success using Orman’s advice is *Kristie Stephens, a 33-year-old agriculture manager from Southern California. Read on to find out how Stephens used Orman’s advice to save $80,000 and purchase a home.
Saving Money During Post-Grad Life
At 26 years old, Kristie Stephens was lucky enough to graduate college without any student debt and move home to work for her family’s business after about one year of working for another company. Part of that also included moving in with her parents. While Stephens admits living at home wasn’t always easy — and she almost moved out a few times — she had a goal: to own a house by the time she was 30.
The problem was she didn’t know how to get there. That’s when Stephens turned to Suze Orman for help. “First I read ‘The Money Book for the Young Fabulous & Broke’ and then ‘Women and Money,’ but the first one became like my own bible,” she said. Stephens actually loved the book so much she gave it to everyone for Christmas that year. “Brothers, sisters, cousins … everyone,” she said.
With Orman’s help, Stephens learned the fundamentals of personal finance: how to budget, save money and plan for retirement. Right away, she got to budgeting and started making automatic monthly transfers into a savings account.
Sticking to a Budget
Stephens put together a homemade spreadsheet and started tracking all the money that was going in and out of her accounts, as well as writing everything by hand in a good old-fashioned check register. This kind of system helped her keep an eye on her accounts and control how much she was spending day-to-day.
Learning to live on a budget was surprisingly easy for Stephens. “My dad helped me budget in college,” she said. “We did it together. I had to give him a list of my monthly costs and track my own bills and payments.” She added, “He helped me pay for things, but I had to be accountable for what I was spending and pay my bills on time.”
And it seems like he still works to keep her grounded and responsible. “I may work for my family’s business,” said Stephens, “but my dad treats me like any other employee. He pays me a fair wage — between $65,000 and $75,000 — and always makes sure I report to other people.”
After Stephens read Orman’s books, she also opened a Roth IRA and started automatic monthly transfers. “I always maxed it out,” she said. “I just divided the yearly max by 12 and made sure I transferred that much each month.”
Achieving a Major Milestone
Once she got her financial house in order, Stephens made a plan to make her long-term goal of homeownership a reality.
“Suze warns against getting a co-signer and because I was single, I knew I had to get my finances in order if I wanted to purchase a house on my own,” she said. “I didn’t open any new credit and paid down my debts. My goal for the house was a 20 percent down payment, so I lived at home and saved I would have been paying in rent.”
Stephen’s strategy paid off, and she became a first-time home buyer. In only four years, she saved $80,000 — enough to put 20 percent down on her first home when she was 30. When she turned 31, she was able to buy her first house.
Tips on Accomplishing Your Financial Goals
If Stephen’s story seems remarkably easy, it’s because it was. She kept it simple: Set a goal, track your spending and make saving a priority. Here’s how she did it:
1. Automate your savings.
“I automatically transfer money into my savings each month,” said Stephens. “People say, ‘When I have the money I’ll transfer it.’ But that never happens. You have to pay yourself first. I always increased my savings as I made more money. I never decreased it, even when I was paying off debt.”
2. Use credit cards wisely.
Because of Orman, Stephens knows how to avoid the credit card trap. Instead of a loan, she uses her strong credit to get deals on credit cards because she knows she can control her spending and use them to her advantage.
“My balance goes up and down, depending on what I have going on, but I usually pay my balance in full each month,” said Stephens. “When I bought my house, I shopped around for the best credit card deals before I purchased my washer and dryer and refrigerator. I ended up getting a 0% credit card from Lowes, which also came with a discount, and paid off my appliances before the deal was over. I also got a 0% Macy’s card to buy a couch and a bed, which has just $500 more to pay off.”
3. Track your spending.
This is an age-old piece of advice because it works. “I actually don’t use cash — credit cards help me control my spending,” said Stephens. “I pay attention to the balance and stop using it if I know I can’t pay it off that month.”
She added, “I don’t budget using specific categories either; I just watch my balances. But you absolutely have to check every day to know where you stand.” Stephens also said all of her bills are on auto-pay, and she overestimates her monthly spending so there are never any surprises.
Where Is Kristie Now?
Three years into homeownership, the hidden costs of buying a home caught Stephens by surprise. “I didn’t realize how expensive it would be just to furnish a house,” she said. “My credit card balance is higher than I’d like, so I transferred the balance to a 0% card with no interest for 18 months. I know how much I need to pay each month to pay it off this year.”
She added, “I paid over $400 to transfer the balance, but I’ll save more not paying interest.”
Stephens also purchased a new car last month using financing. While she scored a great deal, she admitted she went against Suze Orman’s advice on this one. “Suze says if you can’t pay a car loan off in three years you can’t afford it. I didn’t really do that,” she laughed.
With a house payment and car loan, unexpected costs are harder to plan for now. So, to keep more cash available for emergencies, Stephens stopped maxing out her IRA. She said, “It’s just not realistic to max it out right now.” But she still makes regular monthly contributions because “not saving for retirement at all is not an option.”
Even though she’s facing new financial hurdles, Stephens is still confident in her money management skills and has moved onto estate planning. “Now that I have property, I know how important it is,” she said.
Keep reading: How I Saved $30,000 for a Home Down Payment in 5 Months
Thanks to Suze Orman, Stephens has become a bit of a financial guru herself. All those siblings and cousins she gave Orman’s book to now turn to her with their money questions. “Everyone asks me for financial advice — they think I’m an expert,” she said. “I don’t know about that, but I just know if I’m financially smart, I can always make it happen.”
*Name has been changed.