Beth Placek is a young, vogue, college student, graduating with a wealth of knowledge. And speaking of wealth, for Placek, that’s about where it ends.
So when she began embarking on her personal financial planning endeavors earlier this year, she sought help from a source that would see her the same way she sees herself – Suze Orman’s "The Money Book for the Young, Fabulous & Broke."
"It sort of sucked me in and summed me up perfectly," said Placek, a senior nursing major at the University of Missouri. "I’m young, I’ve got my life going for me, but, you know, I’m broke."
But Placek is no stranger to money management. She’s been doing it since she was 16, when she helped pay for high school, purchased her own car and started saving so she could pay her way through college on her own.
Now that she’s leaving, Placek said she is seeking advice from some of the countless financial planning guidebooks many graduates turn to for help. She thinks Orman’s quick, "down-to-Earth" writing style speaks to her, but doesn’t talk down.
Financial guidebooks may lack substance
Placek said she often finds The Wall Street Journal and her parents’ money magazines cryptic and irrelevant. She likes Orman’s book because it skims a vast range of financial topics – everything from debt and credit to paying off loans and investing in the stock market.
But that is exactly what some financial planners and economics professors say make the advice books, with names such as "The Complete Idiot’s Guide to Financial Planning in Your 20s and 30s" and "I Hate Financial Planning," all pop and no substance. Others say financial guidebooks are just one resource out of many that graduates should look for on their quest to become financially grounded.
"(The books) are not packed full of information," said Mark Oleson, director of MU’s Office for Financial Success. "They are more just about feeling good about your financial situation and motivating you to do something, not about understanding what you are doing."
Oleson, an assistant professor of personal financial planning, said money guidebooks try to combine too many topics in too few pages.
Next semester, he will teach "Financial Success," a one-hour class on personal financial planning for college students. But Oleson has never been able to find a textbook that even begins to cover all that he wants his students to understand. So he doesn’t use a book at all. Nothing is as simple or clear as a conversation, he said.
Deanna Sharpe is not quite as skeptical about financial guidebooks, as long as they come from "respected" names and have a good track record. Sharpe, also an assistant professor of personal financial planning, argues that though she hasn’t used any of the books herself, reading Amazon.com reviews or listening for popular titles on CNBC and other news networks might make the choice easier for students.
She recommends books and magazines by Kiplinger’s, which, among other things, publishes creditable business forecasts, and she also suggests browsing any information associated with Consumer Reports magazine. As long as a book isn’t trying to sell something, Sharpe said, it could be valuable to a person seeking financial advice.
"When they’re good, they’ll speak to not just where you are, but where you are going in your life," Sharpe said.
But for those who can’t even afford to put $30 down for a glossy financial book, Sharpe and Oleson recommend trying the Internet. Any university or government website can probably offer some sound advice, Oleson said.
"If someone wants something from you especially before they give you anything, start sniffing, something could be wrong," Sharpe said.
Consider the source
Still, Oleson believes nothing beats one-on-one, personalized financial help. He also asks young adults to consider the source. Too often, people confide in salespeople or brokers who sometimes "talk in circles" around them, knowing they themselves will reap the benefits of whatever decision is made.
So why seek advice in the first place? After watching Suze Orman and Jim Cramer, author of "Mad Money," Placek started to freak about her financial situation. Her parents had been helping her budget for years – but how long would that last?
"The prospect of having money to manage has made me start wanting to look at my financial future," Placek said.
Sharpe thinks students entering the financial world today are met with many more options than their parents had, and those who are financially savvy are least likely to get duped upon arrival.
Credit, Social Security, debt and loans have changed, and by design, parents aren’t always the best personal finance teachers, Sharpe said.
"Not understanding what an APR is or what an acceleration clause is and giving a child a credit card is almost like handing a loaded gun to a 2-year-old," Sharpe said. "It’s not good sense."
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