Saving Money During Tough Times: Suze Orman’s Top 5 Tips
With around half of Americans reportedly living paycheck to paycheck, the idea of saving money often feels daunting. For many, the concept seems more like a dream than a reality. However, financial guru Suze Orman offers practical advice for anyone looking to squeeze savings out of even the tightest budget. Here are her five best tips for how to save, even when you feel financially strained.
1. Change Your Mindset: Ditch the Word ‘Can’t’
Suze Orman emphasizes the importance of mindset. “You have to strike the word ‘can’t’ out of your vocabulary,” she tells CNBC. Instead of fixating on the reasons you believe you can’t save, shift your focus to identifying areas where your money might be slipping through the cracks. Consider that $10 lunch out—what if that money was redirected into a retirement account? By altering your mindset, you not only open up possibilities for savings but also empower yourself to take action.
2. Scrutinize Your Spending Habits
Orman encourages everyone to take a closer look at their spending. According to Oprah.com, she challenges individuals to cut their utility bills by 10%. Small changes can lead to significant savings. Furthermore, examining credit card statements can reveal “hidden money”—charges you may have forgotten about or subscriptions you no longer use. Rerouting these funds to savings can provide a surprising boost to your financial situation.
3. Automate Your Savings
One of Orman’s most practical suggestions is to automate your savings. This strategy involves setting up your accounts so that a designated amount of money is whisked away before you ever see it, making it less tempting to spend. “You will find that you do not miss it,” she shares. Even a small amount, like $50 a month, can add up over time, especially if invested in a Roth IRA where you can access your contributions if needed.
4. Distinguish Between Wants and Needs
Every time you’re about to make a purchase, Orman suggests you ask yourself: “Is this a want or is this a need?” Essentials like medicine and groceries fall into the “need” category, while things like that new phone case or those trendy shoes probably fall under “wants.” By being ruthless with this distinction, you might free up a surprising amount of cash each month that can be redirected into savings.
5. Build an Emergency Fund
While saving for the future may seem impossible, Orman insists that everyone should have an emergency fund covering eight to 12 months of expenses. Start small; even contributing $20 a week can significantly build a safety net over time. “The most important thing is that you have got to live a life below your means, but within your needs,” she stresses. Cultivating a habit of saving, no matter how small, can lead to financial stability in the long run.
Strategic Saving: A Path to Financial Security
Saving money isn’t merely about earning a higher income; it’s about being strategic with what you already have. By following Orman’s advice, individuals can prioritize their spending, automate their savings, and gradually increase their savings as they discover hidden funds within their budgets. The journey to financial security begins with small, consistent steps—and the belief that saving is achievable.
Want to Dive Deeper?
Looking for more inspiration on frugal living? Check out articles that highlight the frugal habits Suze Orman adheres to even with her wealth, or gain insights from Warren Buffett on what pitfalls to avoid to save more effectively.
