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Editor-at-large for Money Magazine
Official Money Coach for AOL
Financial Editor for NBC's Today
Writes columns for Time Magazine and USA Weekend magazine
TV appearances on The Oprah Winfrey Show, Regis and Kelly
On the advisory board for the March of Dimes
B.A. in English from the University of Pennsylvania
$10 A DAY
Jean Chatzky says the average American has $8,000 of high-rate credit card debt. If a person saved $10 a day, in three years he or she would get out of debt. If this person continued to save $10 a day, a financial cushion of over $8,000 would be saved for emergencies. If the person keeps saving $10 a day for 10 years and invests it where it can grow tax free, like a 401(k), $23,994 is saved; in 20 years, $64, 866 is saved; and in 40 years $1,385,351 is saved.
Before people look to saving their $10 a day, they must initially get out of debt. The first step to do that is to assess the problem. This means understanding how they got into debt in the first place. Several factors could be the reason for debt, like a job loss, owning or renting a living space, etc. It is good for people to assess how they got into debt and how deeply in debt they are.
The next step Jean suggests is for people to know where their money is going. People need to know what money is coming in, what money is going out, and where the money is going. People need to know how much money they bring in before and after taxes, and track monthly where all the money is going for fixed and variable expenses. Fixed expenses are needs and are nonnegotiable. Variable expenses are areas where money can be a little more flexible. Jean says, like dieting where people track down what they eat, people need to watch their money in the same way – they need to watch and track money. “We need certain things—we want others,” Jean explains. The tough part is really examining yourself to distinguish which is which.
Jean then says to make the necessary changes people need to get out of debt and reach their financial goals. People need to look at the changes they need to make in their lives, big and small. These are very personal and individual choices – small life style changes. For example, there was a time when Jean would get her hair done monthly. She realized she could save hundreds of dollars a year if she did her hair herself. There are many things people can do, like eating left-overs instead of eating meals out all the time. Medium changes would involve checking interest rates and refinancing if possible – one can always lower payments on interest rates. If small changes don't work, big changes will have to be made. This requires some hard choices. The goal here is to live on less money that one makes. This means possibly trading down on things, like moving into a smaller home or getting rid of a second car – to trade down because the extra things aren't needed. People need to see how much they can live without, spend less and earn more – get a second job, ask for a raise, etc...
ALL ABOUT JEAN
Jean received the Clarion Award for magazine columns from the Association of Women in Communications in 2002, has been twice nominated for National Magazine Awards, and was named by the Chicago Tribune as one of the best magazine columnists in 2003. Jean sits on the Advisory Board for the March of Dimes and the Board of Directors of the Briarcliff Manor Education Foundation.
Starting her career in 1986 at Working Woman, Jean soon rose to assistant editor before joining the New York-based start-up Business Traveler International. In 1989 she joined the equity research department of Dean Witter Reynolds, returning to journalism two years later as a reporter/researcher at Forbes. She moved to the Dow Jones/Hearst start-up SmartMoney in 1992, rising from staff writer to senior editor.
Born in Michigan and raised in Wisconsin, Indiana and West Virginia, Chatzky holds a B.A. in English from the University of Pennsylvania. She sits on the Board of Trustees of the March of Dimes and the Board of Directors of the Briarcliff Manor Education Foundation. She lives in Westchester County, New York with her husband Peter and their two children.
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