If you channel-surf while you make coffee in the mornings, or if you browse the personal finance shelves at the bookstore on Saturdays, you’ve probably noticed a journalist named Jean Chatzky giving sound financial advice.
Chatzky, 47, is the financial editor of the Today Show, a contributing editor for USA Weekend and Men’s Health, and a columnist for Newsweek and the New York Daily News. She’s the author of seven bestselling books, and she’ll release an eighth book, Money Rules, in March.
On February 28, she’ll also launch a new television show called Cash Call with Jean Chatzky, in which she’ll field questions from live callers with pressing money questions. Cash Call with Jean Chatzky can be seen on RLTV on Tuesdays at 8 p.m.
I had the pleasure of speaking to Chatzky by telephone last week. She’s known for her reasoned financial advice, so I pressed for her position on a few classic finance debates. Here’s what Chatzky had to say:
Q: Everyone agrees that its important to spend less than you earn. But some experts emphasize finding ways to save, while others emphasize earning more. In the “earn more vs. save more” continuum, where do you fall?
A: I tend to talk about it as an equation, and you’re best off trying to support both sides of the equation.
… there’s a lot of frustration from people trying to earn more. Wage inflation hasn’t been even keeping up with actual inflation. Jobs are so tough to get. People are having a tougher time (finding work). So you focus on the side (of the equation) you can control, and that’s the spending side.
But you also have to do what’s in your power to earn more. There are a lot of people, particularly women, who are not aggressive enough about asking for a raise.
Q: There are conflicting debt-payoff strategies. The traditional strategy, debt stacking, is to pay off your highest-interest debt first. But lately the Debt Snowball Method popularized by Dave Ramsey has caught fire. What’s your opinion of the Snowball Method?
A: It costs more over time, and for that reason, I like debt stacking.
I understand why snowballing works for people. You clear a particular card and you put it away. But if you can feel like the money that you saved by debt stacking is also an achievement – you’ll get the satisfaction, and stacking won’t cost as much.
(Chatzky also noted that websites like SavvyMoney.com let people visualize the interest that they’re saving, through personalized charts. Viewing those savings can help motivate people. Chatzky is the Director of Education for SavvyMoney.com).
Q: You were an English major. What would you say to young people today, particularly liberal arts majors, who struggle to find employment?
A: Think about the variety of skills that you have. Think about how you can apply that to places that need jobs.
I was an English major … and then I went to work on Wall Street. The analysts were happy to have me around to write reports.
Think about what you know and what you can do. You don’t have to be a cookie cutter fit, you just have to market yourself in the right way.
Q: Would you encourage people to explore more entrepreneurial routes?
A: Yes, but understand that market you’re getting into. Don’t quit your day job in order to road test an idea. Do it at night until you’ve proved that it’s viable.
Q: You briefly worked in equity research. Are you bullish or bearish on the markets in 2012?
A: I’m cautiously optimistic. I’m continuing to put money in my portfolio every month, as I do in good times and bad, because I believe you can’t time the market.
Wow, nice interview! And some sound advice. While it’s typically easier for people to spend less, I’m glad that advocates taking a balanced approach and also trying to earn more as well. And don’t quit your day job immediately
@Dollar D — Thanks! I like how reasoned and balanced she is.
I love the idea of a chart that SHOWS you how much money you’re saving with the stacking method. Visualization can be everything.
Nice interview. I’m glad that Chatzky mentions that it’s an equation (earning more and spending less) and you have to focus on both sides. But given the growth in the number of 1099 type gigs (freelance, side jobs, etc.) I’d say that many of us can control the earning side as much as the spending side — where you can’t change the price of gas, for instance, and many people can’t move out of their houses thanks to the housing price crash.
@Laura — I also feel like focusing on savings puts you in a “limited” mindset, while focusing on the earning side of the equation puts you in an unlimited, the-world-is-my-oyster mindset. It’s still important to save, of course, but I lean towards the earning side of the equation.
“Debt stacking” – is that the official term for paying off the highest rate debt first? I feel like so many terms have been tossed out that I don’t know which one is best, haha.
Nice interview – I love that she said “Don’t Quit Your Day Job.” I feel like someone should start a website about that!
@PKamp3 — I stifled a chuckle when she said those words.
Of course, I thought of you.
Great interview! Nothing is black and white! Personal finance is like a buffet, you take a little this and that and put it to work.
@krantcents — Oh, I like the buffet analogy!
I’ve always liked Ms. Chatzky and her approach to personal finance. Thanks for this interview Paula, very nice. I’m just sorry I won’t have the chance to see the new Cash Call show.
That’s fascinating to me that Chatzky was an English major and ended up being so ingrained in finance, offering some of the best financial advice around.
English majors are the true heart of the finance world. We’re WAY more fun than those stuffy finance major types.
Congrats on the interview. Great questions. I love how “on message” she is. She does a great job of sticking with fundamentals that work over trendy “plan-of-the-moment” schemes.
@AverageJoe — Thanks! You know, I also had a fun major with no obvious job potential, and people would constantly ask: “So what are you going to do with that degree? Teach?” I thought that question indicated a lack of imagination. Like Chatzky says, you can do just about anything, if you find a way to tie your skill set into it.
I love her for this comment:
“Yes, but understand that market you’re getting into. Don’t quit your day job in order to road test an idea. Do it at night until you’ve proved that it’s viable.”
I’m was getting tired of the various post I was seeing about people randomly quitting there job because they felt it was their time. Think people. Do the math!
This woman is an inspiration.