Suze Orman Says to Protect Ourselves in this Economy

Last week, Oprah had Suze Orman on her show talking about this economy and what we can do to protect ourselves. Anyone who’s ever seen Suze Orman knows that she’s a straight talker and uhh, how should I say this, a little scary. To tell you the truth, I don’t think I would want her as MY financial advisor because I couldn’t handle being face-to-face with her looking me in the eye asking what I spend my money on. (I know where my faults are and don’t need a lecture on it.. or do I? lol) But I understand that Suze knows what we need to do to become financially secure and even wealthy, so I take her advice to heart! Most Americans are spending money that we don’t have and there are many ways that we could cut back. We make excuses to hold onto the things we can’t afford and the time has come to “save ourselves”  as Suze says, “and save our children to make sure they have the essentials of life… such as health insurance, and not just THINGS.”
 
To protect ourselves in this economy we’ll have to downsize, tighten our belts and change our ways. We’re going back into a cash economy because there will be no more credit for some of us and for others, the credit we do have will be lowered and watched carefully. The institutions we’ve been borrowing from have been borrowing money to give us the loans, and they’ve been borrowing their money, and no one ever really had the money to back it up. We’ve been living on borrowed money for so long that we take it for granted and hope and pray everything works out. It’s time to get REAL and save ourselves from financial ruin because hoping and praying can’t pay the bills. We need to become proactive to survive in this economy.
 
Here’s some advice from Suze and other experts recession-proof our lives and get thru the next few “rough” years and hopefully come out on top. Most of it is common sense, but we can all use a reminder from time to time to get us motivated.
 
If you don’t have the money to pay for something… DON’T GET IT! – Buying things like big screen TVs, expensive clothing that you don’t really need, toys for kids, Big Boy Toys and electronic gadgets just puts your further into debt. You may think these things make you happy, but being in debt is far from happiness.
 
Never buy anything that you can’t pay for in 3 months – Of course this doesn’t pertain to a house or a car, but it does pertain to other things for the home, such as a washing machine, or a refrigerator, etc. You shouldn’t try to get the biggest or the best if you cannot afford it. Choose something that can be paid for in 3 months. Otherwise, you could be in big financial trouble down the road as the interest gathers on your credit card. Put things on a lay away plan rather than using your credit card.
 
Think about keeping your car for 10 years, instead of trading it in every 3 or 4 years –Many successful people believe this and did not buy flashy cars UNTIL they became rich enough to afford it (and some still don’t buy cars to show off their wealth!). Warren Buffet has billions of dollars and he says that more people could be millionaires if they would stop spending it on cars and toys. Save your money and when you’re rich, you can buy whatever you want.
 
Get a second job if you have to – Many people feel like it’s over if they can’t pay the bills, but nothing is so big that you should give up and throw in the towel.  You just have to work harder and that might mean getting a second job to get out of debt… or you might want to do this to make even more money than you already have. Even though the job market is getting scarce, there’s always something you can do to make money… (remember, there’s no scarcity in blogland. Use MCB’s Blog Tutorial if you don’t already have one and make a blog your second job!)
 
Stop trying to keep up with The Jones’ – Just because your neighbor has a new big screen TV or a new SUV doesn’t mean you have to go out and get one. Chances are your neighbor is in debt up to his ears and you will be too if you try to buy things just to look good in others eyes. (besides, it shows your insecurity when you buy to impress others!)
 
Cut down on unnecessary “gadgets” – We live in an age of technology but we must remember that most technology is a luxury and not a necessity. If you can afford to buy gadgets by all means do so… but make sure you’ve taken care of your family’s basic needs of food, clothing and shelter first.. and then save money for your retirement or if you lose your job (which is a good possibility in this financial climate). Gadgets and toys should only be bought after everything else is securely paid for.
 
Keep putting money into your 401K –If you’re young enough and have 10-20 years before you will retire, then keep putting the money into your 401K retirement plan or other mutual funds. When the stock market is down you will be gathering more shares so when it goes back up, you can have twice as many shares at a better value! Many millionaires and billionaires are made during times like these. (Just be careful what companies or “sectors” you invest in!!)
 
Watch your FICO score closely – Keep your eye on your FICO score because they do make mistakes. Check with all three companies and write a letter if you find a mistake or you had a good reason for a late payment, etc. Your FICO score will be very important in the next 10 years.. People who have less than 750 might not get a loan from now on, so keep it as high as possible by paying your bills on time.
 
Teach your children the value of a dollar – We’ve all gotten so used to buying anything we want and we have taught our children to expect things to appear out of thin air whenever they ask for them. This is doing a huge dis-service to your kids because they never learn to appreciate the fact that you have to work for your money. It also has long term psychological ramifications too. You are teaching your children that happiness is having things so when they get older they will keep buying things to make themselves happy. We all know that is not the true meaning of happiness. It is good to “want” something. A child or person who never has anything to strive for in life, will never succeed at anything worthwhile. So teach your children that there are other ways to be happy.
 
Don’t stop paying your bills… don’t give up! – This is very important, especially for anyone who is in financial trouble. Get a different home if you have to.. Downsize… get an apartment.. whatever you have to do. Know that things will get better. It’s not the end of the world and nothing to be ashamed of if you have to sell your home. It’s only the end of the world if you make it so in your mind. With hard work, you can and will build back up to buying a home later when things get better. Learn from your mistakes and buy a home within your means when the time comes and the time will come! Money comes and it goes, so there will always be another chance to get that house you’ve been dreaming of. You have to have a good attitude and know that you can make the best of anything and that things will always get better if you do what is necessary to get yourself in a better place as soon as you’re back on your feet again.
 
Get Debt Counselling if you need it – If you’re in financial trouble and cannot pay your debts, find a free debt counsellor in your area that you can talk to face-to-face. Check with a University in your area, or a government Cooperative Extension Program, your credit union, or even the military if you qualify.