TV personality Suze Orman speaks at the Women's Conference Tuesday, Oct. 26, 2010, in Long Beach, Calif. Matt Sayles/AP Photo
When it comes to the state of our finances, the pandemic has not affected us all equally.
Personal finance expert Suze Orman describes it as creating a situation of haves and have-nots. Some people have actually prospered over the past year with lowered spending and the bonus of stimulus money. Others are barely keeping their heads above water after becoming unemployed and depleting their savings.
Orman shared her thoughts on what both groups should do to ride out the pandemic during a virtual event hosted by Visionary Women on Feb. 3. Visionary Women is a Los Angeles-based women empowerment nonprofit.
What to Do if You’re Struggling, According to Suze Orman
If the pandemic has put you in a situation where you’re struggling financially, Orman said your focus should be on holding tight to whatever money you can get. If you get stimulus money or unemployment checks, use that cash to meet your immediate needs and save any extra.
“I do not want to see you take this money and pay down credit card debt with it,” she said. “I do not want to see you take this money and pay off something that you owe, whatever it might be.”
Orman suggested taking advantage of federal student loan forbearance and just paying the minimum on other debt payments.
5 Companies That Send People Money When They’re Asked Nicely
When you log into your bank account, how do your savings look? Probably not as good as you’d like.
It always seems like an uphill battle to build (and keep) a decent amount in savings. But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help….
“I don’t care if your FICO score goes down,” she said. “I care that you have the ability to feed yourself and your children.”
You might have to seek out assistance to cover your basic needs but don’t let that bring you down.
“Lack of money doesn’t make you lack of worth,” Orman said.
Pro Tip
Organizations like the United Way, the Salvation Army and local food banks are resources to help you meet your essential needs.
What to Do if You’re Thriving, According to Suze Orman
If your money situation has actually improved during the pandemic, Orman suggests you consider helping someone in need — just make sure you’re in a stable position to do so.
📌 Don't Miss:
Get Paid Up to $140/Month Just for Sharing Your Honest Opinion
Besides having a steady job, Orman recommended having a 12-month emergency fund. Forget the common advice of having three to six months of expenses saved up. All that’s happened over the past year shows us we need to have a vast safety net.
Once you’ve built up that emergency fund, make sure you’re getting your other financial ducks in a row.
“You better be contributing to your retirement account,” she said. “You better be getting yourself out of credit card debt. You have to be doing everything today to protect your tomorrow.”
If you’re a homeowner with equity built up, consider taking out a home equity line of credit (or HELOC) — even if you don’t need to use it right away. Tapping money from a HELOC is better than taking money from a retirement account, Orman said.
“It makes absolutely no sense to withdraw money from a 401(k),” Orman said. “Do you know that your retirement accounts are not affected in bankruptcy?”
If for some reason, things go south and you end up needing to file for bankruptcy, the money in your 401(k) will be safe.
Suze Orman’s Pandemic Advice for Everyone
No matter if you’re struggling or have benefited financially during the pandemic, being conscious about how you spend your money is important. While we may be closer to the end of this pandemic than we were a year ago, there’s still a good deal of uncertainty on the horizon.
“Everybody should live absolutely below their means but within their needs,” Orman said. “They should not be spending what they can afford. They should be spending less than what they can afford to spend. You should be saving money and saving money, because the truth of the matter is you can never be too rich.”
Nicole Dow is a senior writer at The Penny Hoarder.
The 5 Dumbest Things We Keep Spending Too Much Money On
You've done what you can to cut back your spending.You brew coffee at home, you don’t walk into Target and you refuse to order avocado toast. (Can you sense my millennial sarcasm there?)
You brew coffee at home, you don’t walk into Target and you refuse to order avocado toast. But no matter how cognizant you are of your spending habits, you’re still stuck with those inescapable monthly bills.
You know which ones we’re talking about: rent, utilities, cell phone bill, insurance, groceries…
Ready to stop paying them? Follow these moves…
Explore:
Save Money Budgeting Side Hustles
Ready to stop worrying about money?
Get the Penny Hoarder Daily
Privacy Policy
FAQs
Pay in Cash When Possible
What does Suze Orman say about taking Social Security at 62? ›
As we have discussed, you are eligible to start claiming your benefit when you turn 62. But the benefit you receive at 62 will be permanently lower than if you wait. Every month past age 62 you don't claim your benefit entitles you to a slightly larger payout when you do start collecting your benefit.
Why does Suze Orman not eat out? ›
Suze Orman loves to advise Americans on what they shouldn't do with their money — but is the Bahamas-based multimillionaire out of touch? “I refuse to eat out,” the finance personality told The Wall Street Journal in an interview. “I think that eating out on any level is one of the biggest wastes of money out there.”
What does Suze Orman say about CDS? ›
But not everyone needs a CD, Orman and other pros say
“As great as the certificate offers are today, I don't want you putting all your emergency savings into a certificate. That's because if you need the money during the year, you will pay a penalty for making an early withdrawal,” says Orman.
What does Suze Orman say about buying a car? ›
According to Carfax, cars lose 20% of their value in the first year of ownership and retain just 40% of their original value after five years. “Your goal should be to buy the least expensive car. Period,” said Orman. “That should steer you to a used car rather than a new car.”
What is the #1 reason to take Social Security at 62? ›
1. You're Planning Your End-of-Life Care. Your Social Security benefits stop paying at your death, so if you die before collecting benefits, you'll have missed out on benefits entirely. You need to figure out how to maximize your Social Security income instead.
What does the average 62 year old get from Social Security? ›
If people born after 1960 claim their benefits the month they turn 62, they'll get only 70% of what they would have received had they waited until the full retirement age of 67. The average monthly payment of $1,782 drops by 30% during the first month of eligibility to $1,247.40.
Should I stop eating out to save money? ›
The biggest reason to stop getting takeout as often is saving money. The true cost of eating out adds up both over the short and long-term. Eating out is an expensive alternative to getting food at the grocery store (even if you don't cook).
How many times should you eat out to save money? ›
Now this may not be exact and true for every home, city, or state. But, what if you use the idea as potentially you could save $9 a meal and start limiting your eating out. If you regularly eat out 5 times a week, if you reduce this to even 2 times a week, this is $27 savings, per person, per week.
What does Suze Orman say about money? ›
Live Below Your Means. Spending less than you make is one financial rule of thumb everyone needs to follow, Orman said. “I don't care how much money you make or have,” she said. “Every single person should live below their means but within their needs.
Putting your money in a CD doesn't involve putting your money in the stock market. Instead, it's in a financial institution, like a bank or credit union. So, in the event of a market crash, your CD account will not be impacted or lose value.
Why does Dave Ramsey not like CDs? ›
But when it comes to long-term savings, Dave Ramsey cautions against opening a CD. In fact, he insists that CDs are really nothing more than glorified savings accounts with slightly higher interest rates. The problem with those rates is that they don't do a good enough job of keeping up with inflation.
Is it better to put money in a CD or stock market? ›
Stocks have an average return of about 10% per year, which is well ahead of current CD rates (generally 5% to 5.5%). Because CDs offer fixed interest rates, they're better for short-term financial goals where you don't want any risk of losing money.
How much does Suze Orman say you need to retire? ›
Suze Orman is right. In order to retire early, you need at least $5 million in investable assets. With interest rates so low, it takes a lot more capital to generate the same amount of risk-adjusted income.
How much money should you have to buy a $100000 car? ›
Based on these assumptions, the total annual cost of owning a $100,000 car would be $27,784 [1]. This means you would need to make $277,840 per year to comfortably afford the car. However, this calculation does not include taxes and registration fees.
What type of car does Suze Orman drive? ›
What car does Suze drive? I drive a used Lexus that we bought in 2004.
Is it ever a good idea to take Social Security at 62? ›
There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit will be reduced. Each person's situation is different.
What is the disadvantage of taking Social Security at 62? ›
Depending on what someone's retirement age is, the decision to collect Social Security early could result in a monthly reduction of about 20 to 30 percent of what they would have gotten if they waited until full retirement age.
Is it better to take Social Security at 62 and invest it? ›
Start Collecting Early
He claims that doing so will give you a greater return than you would get by waiting until a later age to apply for Social Security, which means you get a bigger monthly check. “It usually makes sense to take it early if you're going to … invest every bit of it,” Ramsey said in a 2019 podcast.
Is it worth drawing Social Security at 62? ›
If you start taking Social Security at age 62, rather than waiting until your full retirement age (FRA), you can expect a 30% reduction in monthly benefits with lesser reductions as you approach FRA. Remember, FRA is no longer age 65: It's 67.
