Suze Orman: Cut This Expense That ‘Happens Over and Over Again’

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hosted by Jamie Catmull, to share her expertise on managing one's finances.

While offering advice on how to interact with money and live frugally, Orman noted that one expense accumulates rapidly and significantly impacts people's savings and other financial objectives.

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What is Money?

People have different attitudes towards money, shaped by their childhood, relationships, or the culture they live in, and not all of these perspectives are positive. To get your finances in order, Orman believes you need to consider "the true role that money plays in your life."

According to Orman, her advice is as follows: "Money is simply a reflection of who you are. You are the ones who have to go out and earn it. You get to decide how you handle it - whether you save it, spend it, or use it to invest."

If there's an issue with your finances, she pointed out, that probably indicates a problem with you "because you and your money are intertwined."

Money Can Teach You

According to Orman, rather than being alarming, money can actually serve as a valuable educator.

"After 40 years of likely working with money more than any other financial expert, I'm here to tell you that I'm certain that money can teach you more about yourself than just about anything else," she said.

Thinking carefully about where you struggle financially - whether it's dealing with debt or lacking an emergency fund - is a great first step towards fixing those issues. However, she cautioned, "you can't solve a financial problem with more money." It's really about your attitude and awareness.

Avoid This Costliest Expense Mistake

Almost every person who is overspending or not saving enough is likely making this mistake, Orman said, which is an expense that frequently occurs repeatedly.

"You have to learn to live below what you have, while still addressing your necessary expenses," Orman said.

A necessity is something you buy at the grocery store. A desire is going out to eat and doing so consistently, she clarified.

To make her point, she noted that several years ago, as a guest on "The Oprah Winfrey Show," she asked the representative for the financial app Mint.com what was the No. 1 debt that people carried on their credit cards, and the response was dining out.

In her 2010 book, "Suze Orman's Action Plan," she advised that if people want to save money, they should stop eating out for six months. Many readers responded by writing to her about the significant amount of money they had saved.

"I'm obviously a very wealthy individual, and the last thing on my mind would be going out to eat," she said.

Embracing a Thrifty Lifestyle for the Long Term

Despite being wealthy, Orman remains frugal in her spending habits. In addition to avoiding restaurants, she keeps her cars for long periods, having retained her current vehicle for 12 years already, stating, “I have no plans of getting rid of that car for years to come.”

She also wears the same outfits and accessories repeatedly, including a favorite necklace she still wears on the cover of her 1994 book, "You've Earned It, Don't Lose It", where it is pictured on her neck. The handbag she carries was purchased by her in 1993.

Clipping doesn't have to live frugally because of her wealth, but she holds a distinct approach to managing money.

"When you treat money with respect, when you value money, regardless of how much you have, your money will then start to value you back," she said.

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Building wealth is all about living frugally, as Orman points out. However, becoming wealthy is ultimately a process that involves a series of steps including:

• Cut down on expenses and boost your income.
• Make it a habit to save a portion of your money each month in accounts that earn interest by accumulating and adding to the initial amount over time.
• Contribute to a Roth Individual Retirement Account (IRA).
• Create an emergency fund.

In the short term, it's a good idea to start by cutting back on dining out while you work on changing your attitude towards money and adopting more frugal habits.

• Discount Stores and Wholesale Clubs That Retirees Should be Utilizing for Essential Perks
• While people often take Social Security early to get money, remember that collecting benefits as early as 62 can imply a decrease in payment amount. This choice should be made carefully based on the individual's life expectancy and expected income before death.
• By selling these items, you'll be able to generate funds to enhance your retirement portfolio and ensure a more secure financial future.

Suze Orman: Cut This Expense That Keeps Happening Over and Over Again