The axiom “like mother, like daughter” certainly holds true in the Warren family.

At a glance
Name: Amelia Warren Tyagi

Hometown: Los Angeles

Education: BA, history, Brown University; MBA, Wharton School

Career highlights:
  • Financial consultant, entrepreneur and co-author with her mother, Harvard law professor Elizabeth Warren, of the best-selling “All Your Worth: The Ultimate Lifetime Money Plan” and “The Two-Income Trap: Why Middle-Class Parents Are Going Broke.”
  • Co-founder and chief operating officer of Business Talent Group, a Los Angeles-based firm that places senior-level independent consultants in interim executive and consulting positions.
  • Cofounder of HealthAllies, a venture-capital-backed health benefits firm that was acquired by UnitedHealth Group, the nation’s second-largest health insurer.
  • Regular commentator on the nationally syndicated radio show “Marketplace.”
  • Board member of Demos, a public policy research and advocacy organization.

Not only has Amelia Warren Tyagi followed in the financial footsteps of her high-profile mother — Elizabeth Warren, the Harvard law professor who chairs the congressional panel overseeing the $700 billion economic bailout — she has carved out her own niche as an entrepreneur, management consultant and regular commentator on the nationally syndicated radio program “Marketplace.”

Tyagi earned her own way into the financial ranks. She graduated Phi Beta Kappa and magnum cum laude from Brown University, holds a master’s from the Wharton School and has written for Time, USA Today and the Chicago Tribune on the economy, health care and women and work.

The mother-daughter team has written two no-nonsense best-sellers together, “The Two-Income Trap: Why Middle-class Parents Are Going Broke” and “All Your Worth: The Ultimate Lifetime Money Plan.”

Tyagi took a tough-love approach to credit when Bankrate contacted her at the Los Angeles-based Business Talent Group, which she co-founded and where she serves as chief operating officer.

Let’s start with the disclaimer: Credit per se is not a bad thing, right?

That’s certainly too broad a brushstroke, yes. Credit is at the heart of our high homeownership rates and an important tool in seeing millions of people through college.

That said, debt lately has become a ball and chain, particularly for middle-class America. And somehow, there is this misconception that it’s the result of lavish spending.

There is a lot of sloppy thinking where someone goes to the store and says, “Look, there are outrageously expensive big-screen TVs for sale. Therefore anyone who is in trouble financially, it must be because they bought too many of those expensive TVs.” Which, of course, is absurd logic and has no data to back it up.

Your data has found quite the opposite to be true — that many people with high credit card debt are spending it on what you term the “must-haves.”

Yes. The No. 1 reason people get in trouble financially is they lose their job. The No. 2 reason is they have a health problem. So many of the people who are in the worst trouble with credit cards got there because they were charging medical care or groceries or the kids’ child care. I don’t mean to suggest that nobody has bought a 50-inch plasma TV they shouldn’t have bought, but it’s not the primary explanation for financial trouble.

That same misconception also exists when it comes to the subprime mortgage mess.

It’s important to remember that the vast majority of subprime loans went to people who already were homeowners; they were refinancing and cash-outs rather than helping first-time homebuyers into new homes. There is a great deal of evidence that millions of people were steered into mortgages at far worse rates than they otherwise could have gotten or tricked into products with deliberately confusing terms. I think that’s inexcusable. We would not allow that in other kinds of products. For instance, you could not buy that $2,000 television and get home and get a bill for $4,000. Or you open it up and, oops, it’s not a television, it’s a washing machine. We have consumer protections in place on every other kind of product to prevent against that sort of thing. We have greater safeguards in place for a tube of lipstick than we do for a credit card.

The trick is to use credit wisely.

Look, nobody can deny that credit cards are a great convenience. And if you’re in the 40 percent of Americans who pay it off every month religiously and don’t pay any fees or extras, then you’re probably using it just right if it’s not a problem. But if you’re in the other 60 percent, I think you need to try to live your life with as little use of credit cards as possible. Think of it like this: If you’re trying to get control of your money and you’re walking around with debt, why walk around with a credit card in your wallet all the time? It’s the same thing as if you’re trying to lose weight: Why walk around with a candy bar in your pocket? You don’t need it.

You’ve prescribed a magic formula for financial success: Put no more than 50 percent of your income toward must-haves like mortgage, rent, automobile and health insurance, 30 percent toward wants and 20 percent into saving for the future. Why can’t most Americans accomplish that?

I think a lot of people have structured their lives so they’re spending too much on the must-haves and they need to re-evaluate. And that’s hard.

You’re saying they need to downsize?

Yep. They have too big a house, too big a car payment, and they need to be realistic about that. Sometimes, with time, you’ll grow into it; you get the car paid down and then you just hold onto it. But if 75 percent of your paycheck is pre-committed to your basic monthly expenses, you don’t have all that much wiggle room to eat or go have a good time on a Friday night, which I think everybody ought to have a little room to do, or to be saving for your future, which everybody needs to do.

What place do credit cards have in a responsible financial plan?

It can be hard to think about moving into a smaller home, but the reality is if you move to a smaller home and then get out of debt, you can quit worrying so much and know that you have money in your pocket to go out on Friday nights. That’s a trade-off that could be happier for your life in the long run.

They have a place in an emergency. The first line of defense in an emergency should always be an emergency fund, but if you’re in an emergency and you don’t have anything in the bank account, credit cards are a lousy line of defense, but they are a line of defense when you need one. A better line of defense might be a second job. Can you work Saturdays at The Home Depot? Because with credit cards, it can feel like phantom money. It is so easy to get into debt and so hard to get out.

Still, those zero-percent financing offers can be pretty enticing. I can enjoy this 50-inch TV for a full year without paying a dime!

I know (laughs), and I’ve also got some swampland in Florida for you! Look, if you are in an emergency or you’re already carrying credit card debt and you’re trying to get it paid down, absolutely the smartest place to put it is on a low-interest or zero-interest card. That doesn’t mean it’s a good idea to carry debt! Debt is borrowing against your future, whether it’s zero percent or 20 percent; you should never do that for luxury items or something that is not essential, ever.

And those zero-percent offers have pages and pages of fine print, all designed to trap you and trip you up. They paid a brilliant MBA a lot of money to entice you into spending money you shouldn’t spend and suck you into something that they think they’re still going to make money on. You’re playing against the house in Vegas. Yeah, someone might win sometime, but the house always wins in the end.

The auto industry has used zero-percent financing effectively as well. And an automobile is a must-have, right?

A car is a must-have; a new car you can’t really afford is not a must-have. You need four wheels and a couple of doors that get you where you need to go. If you need a car, buy used. All the economists show you’re far better off buying used. And don’t lease. Drive it till the wheels fall off.

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