Cat McDonald:
I'm Cat McDonald, and this is NASW Social Work Talks. Despite the invaluable and sometimes lifesaving services that social workers provide, pay levels for social work tend to lag behind those of other helping professions such as nursing and teaching. March is Social Work Month. Our theme this year is elevate social work, so we're examining ways to uplift the profession, including increasing social work pay. Our guest today is bestselling author and personal finance expert Suze Orman. Suze Orman hosted the award-winning Suze Orman Show for 13 years on CNBC. Her bestselling books include Women & Money, The Money Book for the Young, Fabulous, and Broke, and The Courage to be Rich. She's also been a regular guest on The View, Anderson Cooper 360, NBC's Today Show, MSNBC, and was contributing editor to O, The Oprah Magazine, for 16 years. Welcome, Suze Orman. I'm so excited to be able to talk to you today.
Suze Orman:
Thank you, my friend. Let's do this.
Cat McDonald:
All right. Many people listening have read one of your books or articles or have seen you on TV, but they may not know that you earned a bachelor's degree in social work. Is there a connection for you between your social work studies and the work that you do now to teach people how to be smart about money?
Suze Orman:
Of course, because you know who you are is really what determines, ultimately, what you have as well as what you get to keep because the basic tenent of money is that it's people first then money, that money can't do anything without you. You have to know who you are. You have to know why don't you do that which you know you should do with money? You have to understand the importance of life, your life as well as other people's lives. In social work, what you would learn is to serve others. You learn to serve the people and the places and the times around you. Many of us learn to also offer those services to God because sometimes it's only God that can help a lot of the situations that people get themselves in, in my opinion, so social work being my foundation, my love, especially in geriatrics, especially in retirement planning, watching people end up in nursing homes. For so long, I believed that people ended up in nursing homes because they didn't have any money. Then I came to realize, oh, my God, because they ended up in a nursing home that's why they don't have any money because of all the money that it took, as you got later on in your life, to take care of you, and so since it was a absolute eventuality that every one of us, hopefully, would get old. Hopefully, we would stay healthy, but I doubt highly that that would be true for the majority of people as you reach your nineties and your hundreds. Yeah, a very long answer to what seems like a simplistic question about social work, but it is the absolute foundation of everything that I ever tell people about money.
Cat McDonald:
Nice. What are the alternatives to ending up in a retirement home with your money draining out of your account?
Suze Orman:
Well, obviously, there really are very few if you can't stay in your own home, and you can't afford private nursing, and you do get older, and then you happen to not be able to pass one of the one, two or three ADLs, activities of daily living. Chances are, in some point later on in your life, you will need assisted care or you may need even more skilled care. You need to know how do you protect yourself? Do you have the money to take care of that? Should you look into long-term care insurance? Can you afford long-term care insurance? What other alternatives are there? Can you buy into a senior community? That's where you have you buy a condo into one rather than just a condo outside of one where things are built in. It's something that everybody needs to plan for because, if it doesn't happen to you, it's going to happen to somebody you know, your parents, your grandparents. Could even happen to your children before it happens to you.
Cat McDonald:
That's true. The social worker profession continues to be mostly female. Studies show that women are less likely to bargain for higher salaries during the hire process. Why do you think that is, and why does it matter?
Suze Orman:
Recently, I released a book that I had written in 2007 called Women & Money. Last year, in September 2018, I rereleased it because this is, in my opinion, the time that women find their voice. Prior to this, and this is just starting now, which is why I also do my Women & Money podcast, which you all should listen to, by the way, it's women's nature is to nurture. It's women's nature, obviously in many cases, to give birth. It's a woman's nature, in many cases, not all, to feed that which she has given birth to. Again, it's a woman's nature to nurture. She will take care of everybody, her spouse, her parents, her brothers, her sisters, her employees, her employers, her pets, and her plants before she will take care of herself. A woman, not a man but a woman, will think one thing yet say another, will feel one thing yet do another. A woman has got to learn to say no to others out of love for herself versus yes out of fear of what other people will think about them. When a woman goes to ask for a raise, she puts herself on sale. She doesn't think she's worthy of it. There's a law of money that when you undervalue what you do, the world will undervalue who you are. When you undervalue who you are, oh, the world most certainly will undervalue what you do, so it is essential. It is essential that women start to learn their own value. I also have another saying that self-worth equals net worth, not the reverse. Net worth never equals self-worth, but self-worth absolutely equals net worth. If you can't value who you are, you're never going to be able to value money because your money and you are one if you really think about it.
Cat McDonald:
Nice. We hear a lot that it's important to pay yourself first. I was reading your bio. In the late seventies, 1970s, you were working as a waitress making about $400 a month. Do you think it would have been possible, at that point in your life, to pay yourself first and, if so, how?
Suze Orman:
I could have paid myself first if I thought about myself first, but making $5,000 a year, I was able to live on that, believe it or not, but I didn't think about saving money for my future. All I thought about was, "Oh, what can I buy so I look cool to impress somebody?" I thought about the things a normal 20 to 30-year-old thinks about when they haven't been educated on the time value or compounding factors of money. I could have paid myself first if I had thought about myself first, but I didn't. I thought about everybody else before me. It's interesting. Right now, I'm doing a lot of work, and it would be fabulous for all of you to go to thehotline.org, which is the hotline and the website of the National Domestic Abuse Hotline where they get hundreds and thousands of calls every single day, really, from women. That was hundreds and thousands, not hundreds of thousands, right, but of calls every day from women who are suffering from domestic abuse, domestic violence. I did an interview with seven women and seven women who survived domestic abuse. Every one of them had been abused financially, but none of them had a clue that they were being abused financially. Every one of them, as they were watching the interview with the other women that I was interviewing with, because they were all there at once, they kept saying, "Oh, my God. I've been financially abused. I was financially abused." One out of four women in the United States of America today are financially abused. I'm dealing with this one woman, and I've been working with her ever since that interview for her to get a savings account. She lives on $248 a month. Obviously, she's on welfare. She has two children, and she's trying. Finally, she's learning how to save money even on $242 a month, believe it or not. Now, over all the time that I've worked with her, she has saved almost $800. Then her relatives come to visit her. They're visiting her and, all of a sudden, because I keep track of what's in her account, I watch three or four hundred dollars go out the window, and I'm like, "What is that about?" She said, "Well, I gave them money so they could take Uber. I took them out to eat. I did this. I did that." She did not put herself first. She did not think of herself. I was like, "What, are you crazy? Now your phone's going to be shut off because you don't have the money to pay the bill," and the phone was shut off and all of these things, but she didn't have the wherewithal to put herself first. She still is in the state of mind, the social work state of mind that needs to be fixed by us, everybody, that others matter more than she does. Could I have put myself first? Only if my mind frame I had been taught that I mattered, that I mattered. I didn't matter. I didn't matter to myself until really way later on in life, believe it or not.
Cat McDonald:
That's a good point. You're talking about changing a frame of mind. How, if you're in a helping profession, and you're really passionate about it, how do you stay passionate about that profession while putting yourself first at the same time? How does that work?
Suze Orman:
Yeah. You cannot help others until you have helped yourself first. Think about when you are on an airplane. The airplane takes off, and there's an announcement that comes on over the airwaves that says, "When the oxygen mask falls down, you are to put it on your face first and then your child's face." The reason that they tell you that is because, if something happens to you, how are your children going to be okay? As a social worker, not that you're looking at all of your clients or the people that you're helping as children, but they all do need help. That is why you are there, but you cannot help them unless you have helped yourself first, unless you put the financial oxygen mask on your face first and then theirs. You think that you're helping them, yet you're afraid that you don't have the money to pay your bills. You don't have the money to save for your retirement. You can't be 100% in the game because, while you're helping them, something's got to trigger in you that says, "Oh, my God. I'm in a worse situation than they're in. Oh, my God. Somebody needs to be helping me." If you really want to help those that you have trained to help, those that you've earned a degree so that you can help them, you have got to put yourself first. It's not even should I or shouldn't I? You have to because, unless you are powerful in your own life, how can you be powerful enough to really help others to the magnitude that you're capable of helping them? Maybe you can help them a little, but you can't help them all the way that you have the potential to help them until you have put yourself first. That's how.
Cat McDonald:
Preach, Suze. That's pretty powerful stuff. Say someone is earning a wage that's on the lower end, and they live in a high cost of living area. What are some things that they can do to improve their financial life, practically speaking?
Suze Orman:
If you live... because social workers do not make a whole lot of money. That's just the reality of the situation. Teachers and social workers, probably the two most important professions and two of the most undervalued professions that are out there. What a travesty, but that's not what this is about. What can you do? First of all, you have to live below your means but within your needs. Just because you can barely afford something, you barely make it by, and you can do it doesn't mean that you should be spending that money. Rather than buying a new car, you should be buying a used car. Rather than getting a new car or even a new used car every three years, you should keep cards for like 10 years. I do. Why can't you? Do you? If you're going to be living in an area that's very expensive, maybe you need roommates. Maybe you need to live outside of that area and commute. Maybe you need to say to yourself, "I don't have what it takes to eat out. I have to make my own food." There are ways for you to live below your means but within your needs. How do you do that? Before you purchase anything, you ask yourself the question, is this a need or is this a want? If it is a need, you have to buy it. If it's a want, you have got to walk away. Also, I think you would find it amazing that, if you did pay yourself first, if you did that, that and the money went directly into your Roth IRA or whatever retirement account vehicle that you're creating for yourself, you would find that your expenses adjust to the income that you have coming in. I always used to have a law of money that the more money you make, the more money you spend. The less money you think you make, the less money you will spend. When you have money in your pocket, just like that woman I was telling you about that I'm helping, she had money in her account, so she thought she could spend it, and she did. You have money left over at the end of the week, so you think you can spend it. You may think that you don't spend money, but you do. You go out to eat. You buy magazines. You go to the movies. You do all of these things. A lot of the things that you do, you do for emotional relief because of everything you've been through with all your workload, your caseload. You have to find that you get as much pleasure out of saving as you do spending. If you could do those three things, live below your means but within your needs, buy only needs versus wants, and get as much pleasure out of saving as you do spending, I think you'll find that you will make your money go a lot further than it's going right now.
Cat McDonald:
Great. Thank you for that. On a sort of a bigger picture, social work salaries do continue to lag behind those of other helping professions, including the nurses and teachers. What do you think social workers can do, as a profession, to raise salary levels nationally?
Suze Orman:
Oh, boy. Do we go on a national strike? Do we start demanding more? I wish I had the answer to that. I mean the way that our economy is set up right now with our own economic disaster for the United States of America just looming because of the debt that we owe, that it's almost as if what would it take to get America, to get the United States of America government to value those professions that matter? I mean I don't know. Is there a national strike where every teacher, every nurse, every social worker, all of a sudden, goes on strike until all salaries are raised? Would that do it? I don't even know. There are few things that I don't have an answer to, and that's one of them. I don't know how we get this world to value those that need to be valued, but I do know this. Even if others don't value us, you have to value yourself. You have to save yourself. You have to stand up for yourself, and you have to make sure that every move that you make is one that benefits you and puts you in a situation where you're going to be okay. The truth of the matter is, even if they gave us all... Not us. I consider myself a social worker. If they gave you all a higher salary, would you even save it? Would you even use it? Would it even matter or would that law of money, the more money you make the more money you spend, would that come into play? Everyone has a play in the financial situation that they're in. They just do. You have to make sure the outcome of that play is one that you want to sit and watch as you get older.
Cat McDonald:
Overall, what are the most important things that we can do to make sure that we're being smart about money, men and women?
Suze Orman:
Yeah. You're smart about money when, really, you do pay yourself first. In May of 2019, there's a book coming out called The Richest Man in Babylon. I wrote the introduction for that book. I have to say that's probably one of the best financial books that has ever, ever been written. It talks about how you value yourself and you do put yourself first. If you're really at a loss and you don't know where to start, that's a great book. I mean, you could even pick it up right now. My foreward won't be in it or introduction won't be in it, but who cares about that? It's a fabulous, fabulous book for everybody to read. You really have to learn the tenets of saving and those three laws that I talked to you about, about living below your means, needs versus want, and getting pleasure out of saving versus spending. If you can, you should all have a Roth IRA. You should all use the Roth 401(k)s or 403(b)s that, possibly, your employer has for you. You should use the Roth model versus the traditional because you're not making that much money anyway, so the tax write-offs don't really matter to you. Make sure that your money is all in a situation where, when you do need it in retirement, you don't have to pay any taxes on it. If you're going to buy a home, buy a home that's a small home that you can afford, that you have paid off by the time that you know you are going to retire. Your biggest expense will always be your mortgage payment. Besides putting money away for retirement, if you do own a home that you know that you're going to stay in there for the rest of your life, make sure that it's your number one goal to have that mortgage paid off sooner than later. Understand that, if you have children, you're not a bad parent if you don't have the money to pay for your kids to go to school. If they have to go to school and take out student loans, all right, but do not take out parent PLUS loans. Do not sign for private student loans. There's nothing wrong with kids having to go to community college and then a public university. Do not let anybody in your family go into debt in order to go to college. You make the college. The college does not make you. Where you end up paying for it when you can barely afford to take care of yourselves, things like that are really important.
Cat McDonald:
These are great, great tips. I have one last question. What's the best way that we can educate ourselves about money? Where can we start? You mentioned The Richest Man in Babylon. Other resources?
Suze Orman:
Oh, are you kidding? I have nine number-one New York Times bestsellers, any of my books, "The Nine Steps to Financial Freedom," is an absolute fabulous book. But rather than buying a book, why don't you just listen to my podcast, Women & Money?
Cat McDonald:
Okay!
Suze Orman:
Since you've said that still the majority of people in social work are women, read my "Women and Money" book. You don't have to buy it. Go to the library and take it out. My Women & Money book and my podcast, Women & Money, you just go to Suze Orman, actually, S-U-Z-E-O-R-M-A-N.com/podcast. It will take you right there. So fabulous I can't even tell you. That's where I would go, honest to God, and I'm not just saying it because it's mine. I'm saying it because very few people really have over 35 years of experience doing this. As I'm recording this, I'm about to be 68 years of age.
Cat McDonald:
Congratulations!
Suze Orman:
Thank you. But for the past 38 years, I've been dealing with people and their money and not just writing about it or whatever. I had every financial license you could possibly have. I'm still a certified financial planner. I had my insurance license in almost every single state. I was a commodity trading advisor. I was an options trader. You name it, I've done it financially. I have managed people's money for them, so I know what it's like to make money for people and to lose money, not just do a podcast about it and blah, blah, blah, but I've lived it, people. There has never been, in my opinion, a greater teacher about money than me.
Cat McDonald:
Good for you!
Suze Orman:
I know, it is true!
Cat McDonald:
Good for you. I'm glad. Well, we're going to link to all of this, including your website and your podcasts in the show notes so people can find those easily as well.
Suze Orman:
Great, great.
Cat McDonald:
Thank you so much for your time. I really appreciate your talking to us.
Suze Orman:
All right, girlfriend.
Cat McDonald:
Thanks.
Suze Orman:
Best of luck to all of you. Okay?
Cat McDonald:
Thank you, Suze.
Suze Orman:
All right. Bye-bye.
Cat McDonald:
Bye.
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