Download Suze Orman’s New Financial Planning Book – For Free

Although I’m not the biggest fan of Suze Orman, it’s hard for me to pass up the opportunity to read some well thought-out financial tips from a nationally recognized advisor.   If you haven’t heard, you can download Suze’s latest 2009 book for free from Oprah’s website until Thursday, January 15 at midnight.  You can also buy it for $10 at Amazon.com

Suze Orman’s Advice on Saving For College

Since I have been working on setting up baby Blake’s college savings recently, I skipped to page 160 to read her chapter about college savings.  It was focused primarily on “What to do about college now that your college savings tanked when the stock market took a dive…” There was a lot of discussion about loan options and financial aid that didn’t really interest me.

What did interest me was the following few points – my personal takeaways from the chapter:

1. Keep your child’s college savings 100% invested in stocks until your child is 14 years old.  Between the ages of 14 and 17, gradually divest until none of the portfolio is in stocks.  – My husband and I have talked about this one, he feels that 100% in stocks is still too risky.  My rule of thumb is: Don’t put anything in the stock market that you can’t afford to keep there for at least 5 years.  With that in mind, I might start shifting the portfolio balance toward bonds/cash a little earlier than this.
2. Use a 529 Plan.  She mentioned Coverdell plans, but 529’s were the emphasis.
3. Don’t get a private loan for college under any circumstances.
4. Save for your retirement first and THEN put away an appropriate amount for your child’s savings.  Don’t put your child’s college savings ahead of your own retirement, in terms of saving priority.
5. Visit www.saveforcollege.com to get more information on saving for college.

I actually did visit this website, which had a handy-dandy college-savings calculator.  It told me that I should be putting away $602/month for my child’s college savings.  Not far off from the $641/month I calculated on my recent article on financial planning for college.

A lot of the advice in the book seems to be working under the assumption that you have been negatively affected by the recent stock market crash and are experiencing job loss, panic selling, getting behind on your house payments, going through a personal credit crunch, or experiencing other problems with your finances right now.  It’s pretty much a back-to-basics tome coming from a conservative, “the sky’s not falling, but you do need to be safe” perspective, encouraging you to pay off your credit cards and make sure you have health insurance.

This may be timely for some families, but I did not find it especially relevant or inspirational.  However, it’s free, so I can’t complain.  Thanks, Suze!  Be sure to pick up your free copy and let me know what you think!

Emily

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