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Don’t listen to Suze Orman’s advice on this money issue.
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Suze Orman is a finance expert who offers advice on a wide variety of issues.
In many cases, her advice is spot on. For example, she recommends opening a Roth IRA with a brokerage firm for retirement savings, which makes sense for many people because this type of account provides tax-free withdrawals as a retiree. And she suggests having a generous emergency fund in a savings account, which can help you be prepared for life’s surprises without ending up in debt.
However, there is some advice Orman has given which you may want to think twice about following because listening to her on this issue could mean you don’t make the best use of your funds.
Why you may not want to follow this Suze Orman tip
One Orman tip you may want to avoid listening to relates to what you do with spending money. Specifically, Orman suggests you stop using your cash for specific things.
“Stop leasing cars, stop eating out, stop doing the things that’s wasting your money and makes your life easier, because in the long run it’s going to make it harder,” Orman advised, as reported by CNBC.
On the surface, this may seem like solid financial advice. But, there’s a problem. Spending money on things that make your life easier is not necessarily a “waste.” In fact, in some situations, it’s the absolute best use of your money because making your life easier can make you happier.
Of course, this does not mean you should spend money you don’t have on things like leasing cars, dining out, or other luxuries. You never want to go into debt for unnecessary purchases, as doing so could make it harder for you to accomplish the things with money that are really important — like preparing for your future.
But you deserve to use your money to do things that improve your life and that you enjoy — as long as you budget to make that happen and you think carefully about what you want your priorities to be.
You can use your money responsibly and still spend it on things that make life easier
Rather than focusing on eliminating costs like eating out or other spending that makes your life easier or more enjoyable, it’s better to set yourself up for financial sense without creating a life of deprivation.
There are steps you can take to do that, such as aiming to increase your income when possible and making sure you don’t overcommit to big expenses. Spending too much on your housing payment, for example, could create a lot of financial havoc for you.
If you opt for a less expensive mortgage or cut other big expenses and free up money in your budget for things you enjoy, that’s a much more sustainable and enjoyable way to live since you are only making a decision to cut back once rather than constantly forcing yourself to give up spending money on the things that make life better for you.
The point is to spend mindfully. Define what “wasted” money looks like to you versus the expenses that make you happy, and build a budget that allows you to do the things that matter to you.
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