The following are notes from Young, Fabulous, and Broke by Suze Orman.

Don’t cancel credit cards after you pay them off. Part of the credit score is the debt to credit ratio. If you pay off a credit card then cancel it you are lowering the amount of credit you have. If you have 4 credit cards that are paid off and one that is maxed out and you keep them all you have a pretty good debt to credit ratio. If you close all the cards that are paid off then you have a 100% debt to credit ratio. You can also have too many credit cards. Try not to exceed 5 credit cards open at once. If you need to close accounts try to keep the ones you’ve had the longest unless there is something really bad about them (ie. a really high interest rate). When you close an account you are deleting part of your credit history.

When you are starting out don’t take just any job even if it pays well. Keep fighting for a job in the industry that you want to work in. Even if you can’t get a job in that industry that also pays well, take it anyway. Once you get the job work as hard as you can at it. The point of this job is not to make money, but to get noticed. Come in early and leave late. Come in on weekends. When your work is done look for extra projects and do them. Don’t ask for a raise. The money will come in time, and they will notice you aren’t there just for the money. This is the time for credit cards.

Credit cards can be used for groceries and gasoline for the first year or so. Don’t use the credit card for frivolous luxuries. Use the credit card for necessities. Once you get successful you will be able to pay off the credit cards easily.

Don’t pass up free money. Contribute to 401k as long as employer matches. Stop when they do. If they don’t match, don’t contribute. Once they no longer contribute, use that money to pay down credit cards. Once credit cards are paid off save for a down payment on a home. Homes appreciate ~4%/year on average. For primary residence jointly owned the first $500,000 appreciation is tax-free. If you put a 10% down payment on a $100,000 home that’s $10,000. In the first year 4% of $100,000 is $4,000. That’s a 40% ROI in one year! Buy a house as soon as it is feasible.

Research a Roth IRA. You can remove the principle at any time without incurring penalties and investment opportunities are wide open.

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