Liz Weston, author of 'No Dumb Questions About Money' - Q&A
No, credit card debt is not normal, she insists
Over the past two decades, Liz Weston has quietly become America's money-savvy big sister, dispensing sound advice with a side of compassion via her bestselling personal finance books and popular columns for MSN Money, AARP and the Los Angeles Times.
As a feet-on-the-ground veteran newspaper reporter, Weston learned how to break down complex financial products into language readers can understand. When doling out money advice, her approach remains reportorial: Get the facts from the experts, translate them into English and offer substance, not platitudes, to folks in financial straits.
In her latest book, "There Are No Dumb Questions About Money," Weston addresses such everyday stressors as debt, couples and money, balancing a budget, finding a financial adviser and planning for retirement. The e-book, available on Amazon.com, is based on her previously published advice columns.
Liz Weston, author,
'There Are No Dumb Questions
A reporter's mindset helped propel Liz Weston to the front of the pack among personal finance authors. Her latest book is an e-book titled, "There are No Dumb Quesitions about Money," which was released in August 2012.
Weston lives near Hollywood with her husband William, a former Disney animator and illustration professor at the Art Center College of Design in Pasadena, and their 9-year-old daughter.
CreditCards.com: Did you ever envision yourself as the person America turns to for financial advice?
Liz Weston: Oh no. In fact, when I first started covering personal finance full time at The Orange County (Calif.) Register in the early '90s, my editor at the time was scary-smart; he seemed to know everything about money and would ask me questions I would have no answer to. And I thought, I've got to get up to speed somehow. So I signed up for the certified financial planner training program, just so I could keep up with him, or try to. But I also knew that I was being told things by insurance agents and stockbrokers that didn't sound right, but I didn't have enough training to really be a skeptic and know when they were blowing air up my skirt. I'm not a CFP but going through the training really helped me understand the basics of financial planning -- and also to know when I didn't know something.
CreditCards.com: It can be tough as a reporter to learn about money when you're not making much.
Weston: Oh! I remember when I was a Seattle Times intern, I wrote a whole story about mortgage refinancing without knowing what a point was. Argggh! But it really helps to have that journalistic background so you can figure out who is a good source and who's not, so when you're being fed a line of bull, you know the difference.
... [I]t really helps to have that journalistic background so you can figure out who is a good source and who's not, so when you're being fed a line of bull, you know the difference.
CreditCards.com: Do you have a colorful money past?
Weston: (Laughs) No, I'm really boring. My mom was a Depression-era baby, and although she grew up poor, she was very conscious of frugality but also understood and had stock market investments. One of the things I remember from childhood is when we would get a (stock) dividend check, that was our fun money and we'd go out to dinner, which was a rare thing back then. I got some of those messages: You avoid debt, you save for the future, you put some money in investments. That was all good background.
CreditCards.com: How did Mom feel about credit cards?
Weston: She had this great attitude toward credit cards. She had a credit card, but she was irritated that she couldn't get credit in her own name; she had to get it as a married woman. But then Bank of America had the audacity to charge her an annual fee for her credit card, so she cut it up into little pieces and sent it back. The idea that you would pay a bank was just anathema to her. She wasn't going to put up with that. So I had a great role model and just built on that.
CreditCards.com: What's the biggest blind spot out there regarding credit cards?
Weston: One of the things I hear a lot from people who are in financial distress is that, while they don't actually say it, the assumption is that credit card debt is normal, and it's not. Credit card debt alone sets you up for trouble because the interest rates can be so high. One thing I would love for every graduating high school senior to know is that you don't have to carry credit card debt and you shouldn't carry credit card debt. That alone can make a huge difference over the course of your life.
CreditCards.com: How do people get into over their heads without knowing it?
One thing I would love for every graduating high school senior to know is that you don't have to carry credit card debt and you shouldn't carry credit card debt. That alone can make a huge difference over the course of your life.
Weston: People rely on other people to tell them what they can afford; they rely on lenders, they rely on mortgage brokers, whomever. And you can't rely on a lender to tell you what you can afford because they don't know! What they know is what you have been approved for. They don't know what level of expenses you want when you retire or whether you're going to have kids and send those kids to college. All of those are hugely important factors in determining how much you should spend, say on a house.
CreditCards.com: Unfortunately, many assume they can't afford financial planning.
Weston: Back when I started writing about this, there were very few options for middle-class people to get help. That's why the do-it-yourself financial planning movement really got going because a lot of the fee-only financial planners only dealt with high-net-worth people. That's changed for most parts of the country because now there is the Garrett Planning Network that does planning by the hour. It's not cheap, but at least it's available. It really does help to get a professional second opinion to look over your plan and see if you're on the right track.
CreditCards.com: Would improved financial education help?
Weston: A lot of people say, "Oh, we should teach this in high school." But if you ever try to teach this stuff to a high school student, their eyes glaze over. You can talk until you're blue in the face, but they're interested in what they're interested in and they have no practical experience with this stuff. What really seems to help is inculcating some basic things: make sure your kids save something out of every dollar that they get. But people can be raised in the same household and come away with different habits from the same money lessons. Until you are ready for it, it's really hard to absorb it.
CreditCards.com: How do you feel about giving teenagers a credit card?
Weston: What's the kid like? Kids are so different. We have a 9-year-old, and we're hoping that by the time she goes off to college, she'll have some real-world experience managing money. I probably will have her as an authorized user on a credit card by that point. Certainly by the time she is 21 she'll have one. There is a school of thought that says have them get one while they're still under your roof so you can supervise, but there's only so much you can control as a parent. Some kids just have to run into a brick wall, and they're going to do it whether you help them or not.
For me, frugality was an important virtue and I actually found myself having emotional reactions to spending money, so if we had a financial setback or needed to spend a large sum, it would make me physically anxious.
CreditCards.com: Financial phone apps are all the rage today. Are they helping or hindering?
Weston: Well, both; technology is rarely purely positive. The positive part is it's easier to keep track of your bank and credit card balances, easier to check prices and look for a better deal and easier to educate yourself on the fly. On the other hand, it's so easy to spend on your cellphone that it's really, really easy to spend too much. If you are on a tight budget, are prone to impulse buying or have credit card debt, maybe you shouldn't have the Amazon app.
CreditCards.com: What's your money blind spot?
Weston: Temperamentally, I'm cheap, OK? For me, frugality was an important virtue, and I actually found myself having emotional reactions to spending money. If we had a financial setback or needed to spend a large sum, it would make me physically anxious. Now I'm much better about that. I have a husband who is an artist, he's very aesthetically oriented; he will not let us sit on orange crates for furniture and wants to enjoy his life today. So we're a really good counterbalance to each other. I make sure we're going to have a decent retirement; he makes sure we enjoy our life today. Coming from the background I did, it's really good for me to have somebody to remind me that life doesn't go on forever.
CreditCards.com: You live next door to Hollywood. Were you ever tempted to become the next Suze Orman?
Weston: When you're looking at broadcast, extreme works; extreme is what gets attention. That's explains "Here Comes Honey Boo Boo." People who are programming are looking for something that is new, exciting, different -- extreme. One of the things I've realized from writing all these books is there is no wise man at the top who decides, "Yes, this is good information and will get published; no, this is snake oil and will not get published." Quite the opposite; it's quite more likely that snake oil will get a big hearing than basic, common, solid financial advice.
The one good thing about the broadcast folks like Suze Orman is they get people interested in thinking about doing something with their money, and hopefully they will graduate to more well-rounded information. My hat's off to Suze for that. I don't agree with her approach at all, but there's value in giving people that start. Suze has managed to figure out how to do it and make it entertaining. The gentle approach is the only approach I can take because it's the only approach I can live with, but it's not as exciting. I do wish there were more good, solid personal finance shows out there to give people good advice, but I'm not sure I'm the person to do it.
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