Smart is the New Rich

Smart is the New Rich: Money Guide for Millennials is an interactive, step-by-step guide to all things money. From credit, student debt, savings, investing, taxes, and mortgages, CNN's chief business correspondent Christine Romans shows this newest generation of earners how to build wealth. You'll learn the old-fashioned approach that leads to a healthier financial lifestyle, and open the door on a straightforward conversation about earning, saving, spending, growing, and protecting your money. You'll learn how to invest in the stock market or buy a home, even if you are still paying off student loan debt. Romans offers expert insight on the "New Normal," and why the rules of the credit bubble—the one you were raised in—no longer apply. Checklists and quizzes help solidify your understanding, and pave the way for you to start putting these new skills into action.

For thirty years, the financial rules for life revolved around abundant credit at the ready. A quick look around makes it obvious that those rules no longer work, and Millennials just now coming of age and entering the workforce need a new plan to build a solid financial foundation and healthy money habits. This book puts you on the right track, with step-by-step help and expert guidance.

• Learn what you should ask yourself before spending any money
• Revisit some old money rules that are actually good habits
• See simple rules for managing student debt
• Learn how to talk about money with friends, dates, and parents
• Find out what makes a Millennial successful in the workforce

The economy is out of recession and growing, but many young people feel left out of the recovery. It's why smart spending, saving, and debt management is so critical right now for them. A smart money plan is no longer a "nice to have" extra, it's mandatory. Smart is the New Rich: Money Guide for Millennials is your guide on how to use time and some good money manners to build wealth.

Preface xi

Acknowledgments xv

Chapter 1 How to Think About Money: Budgeting Basics 1

Pay Yourself First 6

How Much Should You Save? 8

The Rainy-Day Fund 12

Roadblocks to Money Success 15

The Holiday Red Flag 15

Your Money Quiz 16

Chapter 2 College Investment 19

The Million-Dollar Payoff 21

It’s Cheaper to SaveThan Borrow 23

Four Ways to Keep College Costs Down 24

WhatDo YouWant to Be When You Grow Up? 27

Not All Degrees Are Equal 31

Chapter 3 Managing Debt 37

Paying Off the Debt 39

Interest Rate Triage 42

A Safety Net for Low-Income Grads 43

Public Service Loan Forgiveness 45

Live Like a Student 45

Chapter 4 Job Market Fundamentals 49

The Long Healing Process 51

Fastest-Growing States 52

The College Degree Advantage 54

Chapter 5 Millennials at Work 59

Resume #Fail 64

You’ve Got Two Minutes 66

The Hidden Jobs Market 67

Don’t Call Them Soft Skills 70

Keep Your Eye on the Ball 72

Lean In or Lean Back 72

Online Tools to Help Set You Apart 77

Chapter 6 House Money 81

Missing the Real Estate Rebound…So Far 84

Generation Renter 86

Get Ready to Buy 89

Mortgage Rates 91

Location, Location, Location 92

Affordability 93

Living at Home 93

Chapter 7 Family Money 97

Dating and Money 99

The “Talk” 102

What Kind of Debt? 104

Piggy Bank Parents 107

Friends and Finances 108

Crowdfund Our Wedding 109

Chapter 8 Understanding Investments 111

Getting Started: Tax-Advantaged Retirement Accounts 115

Time Is a Four-Letter Word 116

No 401(K)? Invest Anyway 120

Building Blocks 123

Chapter 9 Credit Karma 129

Debit Cards 130

Overdraft Protection 131

So You Want a Credit Card? 131

What Is the Credit Score? 133

Expensive Credit Monitoring 135

What Is the Fed? 137

Time to Buy a Car 138

Appendix A Web Resources 141

Appendix B Cover Letters: The Good, the Bad, and the Ugly 145

Appendix C PayScale 2014–2015 College Salary Report 153

Notes 193

About the Author 199

Index 201

CHRISTINE ROMANS is CNN'S Chief Business Correspondent and anchor of Early Start with John Berman and Christine Romans weekdays 4 a.m. to 6 a.m. ET. She won an Emmy award for her work on the series "Exporting America" about globalization and outsourcing American jobs overseas. She is the author of Smart is the New Rich: If You Can't Afford It– Put It Down and How to Speak Money.

Against a drumbeat of hopelessness about too much student debt and too few jobs requiring a college degree, Smart is the New Rich: Money Guide for Millennials is a realistic and optimistic road map for millennials to save more, navigate their careers, invest in the stock market, and pay their student loans all at the same time.

TIME is a four-letter word of the very best kind for millennials. It is the single most important driver of wealth, and young people have it in spades. That's why the time is now for millennials to address their financial health and start planning their wealth.

Just as you'd buy a guidebook before a trip through Central America or Europe, this is a guidebook for young people travelling for the first time in the money world: at work, with friends and significant others, negotiating a raise, renting an apartment or saving to buy a house, and of course... retirement. Credit, debt, savings, investment, taxes, mortgages—this book is an all-in-one explanation of these topics and more, with checklists and other tools to make the plan clear and easy.

Author Christine Romans is a CNN journalist who has been reporting on the events that have shaped the millennial generation, including the terrorist attacks of September 11, 2001, the financial crisis of 2008, President Barack Obama's election and reelection, and the wave of protests from Occupy Wall Street to the Arab Spring to #JeSuisCharlie. These events have shaped the millennial generation- a generation that values experiences over materialism and wants more out of their jobs and money than the credit-fueled mirage that came before them.

"With Smart is the New Rich, Christine Romans has managed to turn a book about saving and investing money into an enormously entertaining read. If your plans include sleeping under a roof, eating food, wearing clothes, raising a family, and paying off your college loan, you should read this book first thing tomorrow. If you're dreaming even bigger you should read it today."
—Aaron Sorkin, American screenwriter and playwright

"Everything you want to know about money but were afraid to ask! Our children–today's millennials–badly need a smart travel guide through the value of a dollar. I myself have learned so much over the years from CNN's Christine Romans' ability to cut through the financial clutter, and her book comes not a moment too soon!"
—Christiane Amanpour, CNN chief international correspondent

It's About a Better Life, Not Just a Bigger Bank Account

It is a huge and highly-educated generation that is asking tough questions about money. Is college worth it? What's the point of owning a house? What if I don't want to work a 9-to-5 office job? Is investing really the best way to save for retirement? Smart is the New Rich answers those questions and more.

• Is it better to rent or buy
• Why living at home is the single best economic decision many young people can make
• How to negotiate your first salarys
• How to triage your loans in the smartest way
• How (and whether) to ask your parents for money
• Why you need to know your love interest's financial situation by the third date

Smart is the New Rich is a crash course in personal finance that answers these money questions. You'll learn about everything from budgeting and building credit to starting a business and planning for retirement.