Suze Orman was once a waitress making $400 per month. Today she’s built a successful career as a personal finance guru through hard work and dedication. Orman has published several books and hosted her own TV show. Her advice is simple but sound. If you could use some help with your finances, read on.
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Top Financial Advice from Suze Orman
One piece of financial advice from Orman is to take an active role in handling your money. She sees many people who put their nose to the grindstone and work hard. They focus on the hustle but don’t put that same effort into managing their money. Orman says everyone should know the exact state of their finances. You should know what your goals are and how you can achieve those goals. (Here are a few signs you’ve outgrown your financial goals.) The worst thing you can do is work hard for years, without thinking about your money, only to find that you’ll never meet long-term goals like retiring comfortably.
Orman advises people to create an emergency fund that will last eight months. A strong emergency fund can make all the difference if you get sick, lose a job or find yourself in a tough financial spot. Many people react with amazement when Orman says to create such a large emergency fund. How will they save that much just for an emergency? Orman’s answer is to save a little at a time. She doesn’t expect anyone to just snap their fingers and have a robust emergency fund.
Instead of focusing solely on the final goal, she suggests focusing on the small steps that you can make now to help you realize your savings goal. Put aside a little bit every day, week or month. This advice applies to any big goal. You could be saving for an emergency, for the down payment on a house or for retirement.
Americans don’t have enough retirement savings. One thing you can do to help yourself is max out any company-matched 401(k). Many companies offer a 401(k) to their employees and also offer to match the employees’ contributions. That’s free money for you and you’re losing out if you don’t max out that 401(k). Now, it’s also good to have other retirement accounts. Orman and experts like Clark Howard particularly recommend that you open a Roth IRA.
Another useful piece of advice is to automate everything. Automate bill payments to ensure that you never pay late fees. Automate savings contributions to make sure you stay on track. Sometimes people have a difficult time saving for retirement because they forget to regularly move money into their retirement accounts. If you automate that process, you can meet your goals without even having to think about it.
A Brief Bio of Suze Orman
Suze Orman was born in Chicago, Illinois in 1951. She went to the University of Illinois and pursued a B.A. in social work. She was supposed to earn her degree in 1973, but her degree was withheld until she finished one final requirement. Instead of finishing, she bought a van with money she borrowed from her brother, and she traveled across the country with her friend.
She worked as a waitress for years but decided one day that she wanted to open her own restaurant. Unfortunately, she didn’t have the money to do that. When her customers found out, they pooled together $52,000 as a loan for her to pursue her dream. She thought she was putting the loan in a money market account at Merrill Lynch, but the stockbroker convinced her to sign some papers without reading them. Instead of putting the money in a money market account, the stockbroker got her into a more risky investment – buying stock options. Orman made great money at first but lost everything within a few months.
She had learned a little about the stock market in that time and applied for a stockbroker job at Merrill Lynch. She got the job and became one of the office’s top brokers. Orman continued to work for Merrill Lynch until 1983. She then moved on to Prudential Securities, where she continued to advance in the field of finance. In the late ’90s, she published three books on personal finance. She continued to publish books and moved to TV with “The Suze Orman Show” in 2002. The show featured Orman giving personal finance advice and answering questions from viewers.
Financial Focus and Philosophy
Suze Orman advises people on all areas of personal finance. In particular, she offers advice on creating a plan to meet long-term savings goals – like retirement or the down payment on a house. Her target audience is the average person who maybe has a little in savings but doesn’t have financial security.
Where You Can Find Suze Orman
Orman maintains a website that includes information on her books, shows, and live talks.
Suze Orman ended “The Suze Orman Show” in 2015, but is working on a new show which will focus on families, couples and friends whose money disputes are affecting their lives.
Don’t want to wait for the new show to come out? You can also see Suze Orman live. She is doing talks throughout the country in 2017. You can learn more about live events on her website.
Suze Orman once drove across the country with no college degree and only $300 to her name. She didn’t have a lot – she lived out her van for a bit – but she never gave up. She worked hard and wasn’t afraid to stop and reset when things didn’t go as planned. As she advanced in her career, Orman began sharing the things she’d learned through books and a TV show. Her advice is simple but useful for people who don’t know where to start. So if you’re struggling to build savings or if you don’t know how to make a plan that will help you achieve your long-term goals, you may want to check out Suze Orman.
Tips for an Emergency Fund
- Suze Orman tells people to create an emergency fund that will cover at least eight months of expenses. An emergency fund will give you the confidence to tackle other financial challenges. You can feel better putting money toward debt if you know that you have a safety net in case you get sick or have to make a big auto repair. Still unsure why you need an emergency fund? Here are five reasons to have an emergency fund.
- You’ve decided to create an emergency fund. Great! But where should you put it? For some people, the easiest place is in your savings account. If you want to have $10,000 in case of emergencies, then mark $10,000 in your savings account as untouchable except in case of emergency. It’s pretty tempting to spend that money though. It might be better to create a separate savings account or a no-penalty CD. In general CDs tend to have higher interest rates than savings accounts but many CDs will penalize you for withdrawing money early. A no-penalty CD is a way around that. It will allow you to grow your money at higher interest rates and won’t hit you with a penalty for withdrawing it early. Here’s an article with some more of the best places to to put an emergency fund.
- As you try to grow your emergency fund, look at all the places you earn money. Do you get a year-end bonus at work? What about your tax returns? Those could be a great for jump-starting a fund. You can also get creative. Have a yard sale and put all the money toward your emergency fund. You could also try something like the 52-Week Money Challenge to help you save your extra dollars throughout the year. Remember that you don’t have save up a whole emergency fund at once. Saving a dollar here and there can go a long way.
- Don’t stop at an emergency fund. Once your debts are paid off and you have an emergency fund established, it’s time to start investing. A financial advisor can help you create a portfolio that aligns with your risk tolerance and long-term financial goals. SmartAsset’s financial advisor matching tool can help you find an advisor to work with to meet your needs. First you’ll answer a series of questions about your financial situation and goals. Then the program will narrow down your options to up to three suitable advisors in your area. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.
Photo of Suze Orman courtesy of Hay House Publishing. Other images from SuzeOrman.com