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Suze Orman The 9 Steps To Financial Freedom Book Review

11/23/2008

Every Sunday here on Ask Mr. Credit Card’s Blog we do a book review. This Sunday, I thought we would do things a little differently. Instead of reviewing the entire book in one sitting, I am going to break it down a bit. This review will cover the first few steps to financial freedom, and the other steps will be reviewed next Sunday, and the Sunday after.

That way, we can dig a little deeper into the book itself, and get more benefit from it.

So, without further ado, let’s taste some of this “Financial Freedom” shall we?

Introduction: What do you want from your money?

“There isn’t a part of our lives that money doesn’t touch-it affects our relationships, the way we go about our everyday activities, our ability to make our dreams reality, everything. Most of us, I think have a core of anxiety that we carry around with us, though we may not admit it to ourselves. That is part of money’s power over us. “

Well, those words are true enough. However much of a love / hate relationship I might have with my finances, mastering them is essential. I spent a lot of years being afraid to manage my own money, hating to balance my checkbook, being afraid that I couldn’t meet my obligations. The fear diminished quickly when I actually started taking charge of my money, instead of letting the fear of it control me.

“From years as a financial planner I have learned that true financial freedom doesn’t depend on how much money you have. Financial freedom is when you have power over your fears and anxieties instead of the other way around. That’s why, in this book, we’ll address first the fears, and then the finances.”

True financial freedom doesn’t depend on how much money you have. I love that sentence. How else do you explain how two people, who work for the same company, and make the same salary, can have two vastly different financial situations? One of them may be well-off, the other deeply in debt. I definitely agree with Mrs. Orman when she says that financial freedom is not how much money you make, but how well you manage that money, and your emotions.

I have high hopes that this book will shed some light on that particular area of money management.

When I was very young I had already learned that the reason my parents seemed so unhappy wasn’t that they didn’t love each other; it was that they never had quite enough money even to pay the bills. In our house money meant tension, worry, and sorrow.”

Money issues are definitely one of the main reasons for divorce. It has been a challenge for me too, in my own marriage. When two people are not on the same page financially, working towards shared goals and dreams is all but impossible. Now it is a double challenge, with my daughter. I want her to grow up having a positive view of money. I want her to know innately how to manage her money and live below her income. That is something that has to be taught early, and consistently.

Many of us, we didn’t have that benefit growing up, largely because of what Mr. Orman highlights here – that money was a source of contention for her parents, that it was cause for sadness, arguments, and despair. It was not something that was talked about at all, or if it was, it was never positive. I definitely want to work on changing that outlook in my own life, to become more positive about my finances, to build security – real security for myself and my family.

Knowing what steps to take, and actually taking them are two different things. I believe that is why Orman spends so much time in this book focusing on the psychology of money management. Because we all know that 2 +2 = 4, we all have the math, what we don’t have is the control, or the confidence.

Let’s take a look at chapter one.

Chapter One: Seeing How Your Past Holds The Keys To Your Financial Future

The first step to financial freedom is a step back in time to the earliest moments you can recall when money meant something to you, when you truly understood what it could do. When you began to see that money could create pleasure- ice cream cones, merry-go-round rides; and also to see that it could create pain-fights between your parents, perhaps, or longings of your own that couldn’t be fulfilled because there wasn’t enough money, or even because there was too much.

I don’t really remember my earliest experience with money, do you? Will you share it if you do? Orman encourages us to think back, because she believes that our attitudes about money today stem from those first early experiences.

I would agree that they partly come from those first early experiences, but I would argue they my attitude about money today comes much more from trial and error, all of the successes and failures that I’ve had along the way as I grew, and learned to manage my finances.

Orman highlights a couple of case studies from her previous clients. One lady, who’s earliest experience with money was that her family had to move across country to have more of it, was still stuck in her forties living as if she had to pick up and move the next day – because that’s what her knowledge of money meant to her.

The other case study was of a man who lost ten dollars as a young boy. His mother gave him the money to go and bread, and he lost it on the way to the bakery. Ever since that day, he had avoided dealing with money, and if he did make investments, he wanted the money to be “safe”.

Well, I’m not going to say that I think this is a load of bull, though I do think the examples are over dramatized. Clearly, this was a real issue for the people involved. Personally though, I can’t trace my money problems back to a single “overwhelming” moment.

I can point a finger a bit though, to one experience (though it hasn’t crushed me and over run my financial life!)

When I was 17 my parents sent me on a school trip to France. They gave me two credit cards, and I blew money left and right on both of them. When I returned home, and they got the bill, I certainly got the lecture on responsibility that I deserved – but I was not the one that paid the money back – they did.

That did give me some future problems with credit, for a little while. When I started to college, I got two credit cards of my own, and managed them irresponsibly – making payments irregularly, and looking at the cards as if they were “free money”. But it really didn’t take me very long to figure out that the money I put onto those credit cards was still money that I owed.

And I’m certainly not going to sit here and blame my parents for not making me pay back what I spent. They did what they thought was right, as each parent does. Parents, we do the best we can. My mistakes were my own. I actually learned the lesson better by messing up a few times and fixing it on my own anyway.

I think this is dangerous territory. One thing I do not believe in is passing the buck for my financial mistakes. My family, and my parents taught me what they could, and my mistakes were my own fault.I take credit for the mistakes, and the solutions I found to them. Not owning up to your problems, and pointing the finger at family, or past experiences, doesn’t really help you move forward.

Chapter One does include a few more examples of childhood trauma regarding money. I’m not going to reprint them here, but they are similar to the previous two examples.

I don’t know, you guys out there reading this, what do you think? Do all of our money problems go back to traumatic childhood experiences? I’m really not sure about that, but I’m going to move on to chapter two.

Chapter Two: Facing Your Fears and Creating New Truths

“Don’t you find it strange that you can raise a family, hold down a job, fix things that are broken, and deal with everything that comes up in life – except your money? I hear it from new clients every single day: “I’m too busy at work to deal with my money. I just don’t have time.”

How is it possible that we’re all too busy working so hard to earn our money to be able to deal with the money we’re working so hard to earn?”

I do agree with Orman that fear is the reason we refuse to make time to deal with our money. It’s a lot easier, and more fun to simply not balance that checkbook, draw up a net worth statement, or learn how to research investments.

To me at least, managing money is just like everything else – you will prosper in direct relation to the time and energy you devote to it. If you don’t make being prosperous a priority, and dedicate the time, energy and education to it, it will never happen. If you’re afraid of the steps that you have to take in order to do that, this book might be a real help to you.

Chapter Two includes several more case studies from previous clients. This time they deal with a fear of money, traumatic events that cause these folks to avoid dealing with their money in their adult lives.

The first example comes from a woman who broke a platter when she was very young. It was her grandmother’s special lobster platter, and she begged and begged to carry it to the table until her grandmother finally let her. On the way to the table, she dropped it, and it broke, expensive lobsters, and shards of the platter were all over the floor.

Ever since that day, the woman had been living as if she “could not hold onto anything” – even her money.

Aside from the case studies, Chapter two does have several exercises designed to get you to think about where your own fears of money come from. Orman asks several questions, and gives some fun examples of the replies she gets from her clients.

The first question is, what are you afraid of concerning money?

Typical client’s answers include:

Orman advises creating a personal mantra – a powerful message to yourself that you will use to combat these fears and give you a new lease on life. This is pretty good advice psychologically, and it does work.

Things like:

  • I have more money that I will ever need
  • I am in control of my financial affairs
  • I am putting at least $200 a month into savings
  • Orman encourages you to repeat your mantra over and over until it becomes a part of you, and you begin to make it real.

    If this is your first exposure to psychological tactics of this kind, then this book is an excellent for you. If it is not your first exposure, and you’d like something a little more in depth, I wholeheartedly recommend “Think and Grow Rich” or “Healing Your Financial Soul“. In place of this book.

    So far, I do like The 9 Steps to Financial Freedom, even though some of the examples are laughable at best. It is an entertaining read, and Orman takes the time to thoroughly explore the psychology behind some of the most common money problems that we all face. The psychology behind her tactics is sound, and it works for lots of people. It’s a pretty typical approach to overcoming problems and fears.

    Check back next Sunday, for a review of the next few chapters!

    Have a question for us? Read the book? Tell us about it by leaving a comment!

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