Better Know… Liz Weston

Better Know A Blogger - Liz Weston

This is our 15th “Better Know A Blogger” interview. We’ll be posting two per day, except on Saturdays and Sundays, leading up to the 2012 Financial Blogger Conference next month. The purpose of this series is to introduce you to some excellent bloggers from all across the web who are able to shed light on topics ranging from debt to saving money to investing. (Each interview is conducted via e-mail and then published here)

Today’s interviewee is Liz Weston. Her website is Enjoy!

Liz WestonYou’re the most-read personal finance columnist on the Internet. How did you become so successful? And did you ever imagine this would be the path your career would take?

As to the second question: no way! I thought I’d be a daily newspaper reporter for the rest of whatever. At one point, I thought I’d spend my whole career in Alaska!

I caught some really lucky breaks and had a lot of help. I got interested in covering personal finance in the early 1990s, just as the stock market was about to take off and as 401(k)s were replacing traditional pensions, which meant people had to start learning about retirement savings. At the time, I was working for the the Orange County Register. I had terrific editors, including Jon Lansner, who seemed to me to know everything about personal finance, and Russ Stanton, who would later become the editor of the Los Angeles Times (and who helped me get hired there in 1998).

I thought I’d stay with the Times until I retired, but MSN Money (led by another former Times guy and excellent editor Richard Jenkins) approached me in 2001 with a great offer—a chance to work from home, get a real toehold online and make more money. Initially, I benefited a lot from the fact that most PCs had Internet Explorer installed; IE had MSN as its home page, and a lot of people never changed their home pages in the olden days. So people saw my stuff, whether they wanted to or not!

It also helped that I had a solid background. My undergraduate degree is in economics, and I graduated from the Certified Financial Planner training program. I’m not a CFP, because I don’t do financial planning for individual clients, but I have the education, which has been invaluable.

Do people ever come up to you on the street (or in the grocery store) to ask you questions about money?

It happens occasionally. More often they just want to say “hi” or let me know they like what I write. Yesterday at the airport, a TSA agent recognized me, which pleased my 9-year-old daughter, who was with me.

The sweetest incident was in Las Vegas, when a gentleman wanted me to know my columns “saved” his marriage and said I was invited to his house for dinner anytime! That was really nice. Of course, he and his wife did the work, but if I helped them along the way, that’s awesome.

The most awkward incident was when I was checking into a beach resort with some friends. The young clerk got so excited he followed us to our cottage and cornered me on the porch to ask a bunch of questions. He was very sweet, but eventually my friends had to rescue me. They thought it was hilarious.

In addition to writing two columns and appearing on various radio and television programs, you’ve also found time to author several popular books, including Your Credit Score and The 10 Commandments of Money. How do you find the time to fit it all in? What’s a typical workday like for you?

All that writing on deadline for newspapers really helped me to learn to write fast. It also helped me build up a great roster of sources who can answer my questions. There’s no way to know everything about money, so it’s essential to know the right people to turn to when you have a question (and to know that they’ll return your emails or calls!).

My day starts around 8:15, after we drop our daughter off at school. Most days I need to wrap up work before I pick her up around 2:15, so that’s a pretty compressed day. A lot of times I can’t get everything done in six hours, so I may work in the evenings after she’s in bed or on Saturdays, when her dad can take her skating or swimming. My husband’s another big part of my success. He’s my biggest cheerleader and he picks up the slack, especially when I’m working on a book.

Many of our readers are working to pay off several types of debt (for example, student loans and credit cards). What recommendations would you give them to help pay off the debt as quickly as possible?

Maybe they shouldn’t be paying off debt as quickly as possible.

People think debt repayment should be their most important priority, but actually retirement savings should be #1. That’s a hard concept to wrap your mind around, because debt can be so expensive and the returns on retirement accounts can be so volatile. But retirement is what’s really expensive, and it will take most of us our full working lives to save enough money to have a comfortable one. If you put it off, you may not be able to catch up. Roger Ibbotson has done some great work in this area, and he’s concluded that if you don’t get a good start by the time you’re 35, it’s going to be tough, if not impossible, to really catch up. If you get started in your 20s, on the other hand, you will have so much more flexibility later in life. Once you understand the power of compounding, you’ll realize that if you don’t get that money into your retirement accounts, it can’t earn those returns that will eventually get you to financial freedom.

So get started with putting at least something away for retirement. If you’ve got a match at work, you should be contributing at least enough to get that full match.

Then target your toxic debt: credit cards, payday loans (ugh!), title loans, bounce fees. I wouldn’t be in a rush to pay off low, fixed-rate federal student loans. If you have a mix of federal and private student loans, consider consolidating the federal ones to a longer payback period so you can pay the minimum on those while throwing as much money as possible at the private loans. The private loans may have lower interest rates now, but those are variable and could (probably will) ratchet higher soon.

Is mastering one’s finances more about factual knowledge or psychology?

Both. But be wary if the only reason you’re doing something is because it “feels better.”

Many people want to get their mortgages paid off, for example, because it will feel better to be without that debt. But most people have better things to do with their money than pay off a low-rate, potentially tax-deductible debt. They should be saving enough for retirement, at the very least, and have all their other debts paid off before they make extra principal payments on a mortgage. They also should be adequately insured (property, liability, disability, health, life) and have a good-sized emergency fund before they prepay a mortgage.

Paying off a mortgage while neglecting those other areas will leave you poorer in the long run, plus you run the risk of incurring catastrophic expenses that could cause you to lose that home. The whole point of financial planning is to have a balance, so you’re covering all your bases (while still having some fun with your money).

You’re speaking at FinCon this year. What are you most looking forward to about the conference?

Meeting all the bloggers I’ve been following all these years! And meeting Phil Taylor’s little girls. (His wife was pregnant with their first when I saw them last.)

Wonderful! Thank you very much, Liz.

Have questions for Liz? Post them in the comments below.

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