White House money advice
OPINION: The White House is probably the last place I’d go looking for sane money advice.
Current president Donald Trump once set up a ‘‘university’’ to sell his financial (real estate) secrets of success, and ended up settling a massive lawsuit from angry students who felt anything but enriched by them.
His predecessors Ronald Reagan, Bushes one and two, Bill Clinton and Barack Obama all presided over rising US debts.
Clinton paved the way to the Global Financial Crisis by deregulating banking, derivatives dealing, and mortgage lending.
So no, the Oval Office hasn’t provided much money inspiration to us ordinary people.
But this week I read two pieces of money advice I really liked, from Obama’s deputy chief of staff.
It was in the newly-published autobiography Who Thought This Was a Good Idea? by Alyssa Mastromonaco, who worked for Obama from 2005 to 2014.
❚ Save in hard times
❚ Save in good times
❚ Have an independence account
The young Mastromonaco found herself practically penniless during a summer of unemployment in her early career. ‘‘I vowed to always have money in the bank, no matter what.’’
Even when being paid a pittance in her pre-Obama days, when she was a small cog in the machine that failed to get John Kerry elected to the Oval Office, she diligently saved.
It meant babysitting in the evenings, frugal menus at home, and no personal pampering.
Mastromonaco did not see herself as some heroine of frugality.
For her, being frugal was hard, and unwelcome, a bridge until she earned enough to save and live a little too.
‘‘I never bought coffee out, got a manicure, or went to the grocery store without coupons. Like I said, not sexy.’’
Having savings was about more than being prepared for misfortune.
It was a defence against being in the power of people who seek to
‘‘Savings are a defence against being in the power of people who seek to exploit you.’’
She wanted what we might term a ‘‘Bugger Off’’ account (she has a different term), which is enough money in case you need to leave a partner, a terrible job, or a scummy landlord in a hurry.
A very different life-fright led to her second great money tip, which is about keeping your credit score decent.
When she worked for Kerry, she got ‘‘her own’’ credit card to manage the senator’s charter flight bookings.
At one point, campaign bank account statements were released publicly to demonstrate how ‘‘financially viable’’ the Kerry presidential campaign was.
This was achieved by holding back on paying the charter bill.
The card was in Mastromonaco’s name.
‘‘For more than 60 days, I had an outstanding balance of about $500,000,’’ she says.
She only realised what happened when she needed to buy a car, and found nobody would lend to her.
The lesson, she says, is that your credit score matters, and monitoring it is your job.
It’s Money Week here, and we’re being treated to a lot of advice on how to be more prudent in our money lives.
It’s all welcome, but nothing I have seen, read, or heard, have I found as funny, and real, as Mastromonaco’s.
All eyes are on Alyssa Mastromonaco, Barack Obama’s deputy chief of staff, in the Oval Office in 2013.