On the Suze Orman show, the diva pf personal finance tells people straight out that living the lifestyle of a millionaire on the paycheck of a working stiff creates a huge problem that will eventually crash a person's plastic palace. If this is you or someone who you know, tune in to the Suze Orman show tonight, Saturday March 17, to hear her sage advice.
At best, personal finance advice helps people align how they live with their goals to save for a rainy day and plan for known expenses in the future. At worst, it brings to mind nightmares, worries and destructive money habits that on a large-scale, contribute to bankruptcy, despondency, and financial burnout.
While Suze Orman may be the top TV personality for delivering tough love to help her audience get out of debt and overspending, she does not have a lock on sound financial planning, There are many professionals that one could turn to, including certified financial planners, money experts, accountants and stockbrokers, to learn best practices regarding how to manage money.
The following are 5 rules that most any trusted source would offer to make your spending fit with your needs.
1. Get the complete, broad overview of all your sources of income and all your current expenses, as well as the cost of items that are coming your way in the future, that you must save for.
2. Figure out how much you are on the hook for each month, which is not discretionary. Discretionary means that you must pay for that whether or not you use it, for example, your mortgage, your student loans, your cell phone service.
3. Figure out how much you have to save each week or month, in order to have money available for big or small purchases and investments that you foresee, in the future.
4. Subtract your savings and your locked-in expenses from your income, to give you the total amount that you can spend on discretionary items, each month.
5. If you need to save more than you can realistically set aside, then it is time to start trading in what you are obligated for, and accept a lesser version of the lifestyle that you aspire to.
If you follow these 5 rules, then you will be forced to curb your overspending in order to live in a grownup, responsible way and keep your personal finances in line with what is prudent.
Suze Orman show offers a wickedly fun approach to saying you can’t buy that
Suze Orman has developed a reputation for hard-nosed, pragmatic advice that boils down to this: No one should be excused from saving, nor should anyone overspend. Everyone and every household ought to sock away some portion of income every week or month, without fail.
But that doesn’t sound lively, does it? That doesn’t make for good television, and it sure isn’t entertaining or memorable like the SNL skit of Sarah Palin and her foreign policy views. So, instead of simply saying things in starchy terms, Suze Orman presents the equivalent of a scolding teacher-type that you can laugh with while thinking about tough issues.
To illustrate: This is the message you might hear if you scheduled an appointment with a financial advisor. “Come to terms with how much you can save and how much you need to save. Clearly look at what compromises are necessary between your present lifestyle, and the wealth that you need to build up in order to have a secure retirement or help your children with college expenses. Make a plan and execute that plan in order to have a nest egg in case of a layoff or other unexpected hit to your earnings.”
While nobody knows for sure what Suze Orman is going to come out with, it is likely that her advice would be more along the lines of this: “Don’t sign up for that $100 a month cable service. You can’t afford it. Don’t buy a new car, you need to suck it up and drive the one you’ve got until you get out of debtor’s prison. Instead of joining that chic health club, think about how you can improve your health in less cushy ways, because you can’t afford yet another first-class ticket. You are being irresponsible, selfish, stupid or slovenly. Go with the freebie version that will keep you within your means.”
Would you like to be a fly on the wall and listen to that? If you or someone you know could benefit from this advice, tonight's broadcast of the Suze Orman show will be a useful tool to open the discussion. Or, if you'd like to add spice to your Saturday night and be entertained, grab the popcorn and laugh at the hapless callers on the Suze Orman show. It broadcasts on CNBC on March 17, 2012 at 9PM and again at midnight, Eastern Standard Time.