Yahoo Finance Suze Orman: Women Need To Follow 3 Financial Strategies for a Secure Future
Women are significantly more likely than men to be living paycheck to paycheck, and almost half are sacrificing basic needs due to financial stress, according to Varo Bank’s 2023 Wealth Watch Insights Report. But personal finance expert and “Women & Money” podcast host Suze Orman believes these women have more control over their finances than they think.
See: 5 Frugal Habits of Barbara Corcoran
Also: Suze Orman: Young People Could Retire Millionaires By Doing This One Thing
“Now, I know that a lot of you think, ‘I’m living paycheck to paycheck, I never do anything’ … I am willing to bet every single one of you that there’s something you do with money that you should not be doing,” Orman said in an interview with CNBC.
Orman recommended that women go through every single penny they spend to identify where their money is going. Once you have your spending under control, follow Orman’s strategies for securing your financial future.
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Live Below Your Means
The most important thing for women to understand is, “You have got to live a life below your means but within your needs,” Orman said.
Think of “means” as wants — dinners out, splurge purchases and other non-essentials. Living below your means is the best way to prepare your finances for unexpected emergencies like an illness, accident or job loss. It’ll also help you eliminate credit card debt and get a grip on your money — both essential goals, according to Orman.
Live Within Your Needs
To live within your needs, you must identify what those needs are. Orman defines them as essential purchases such as medicine, groceries and gas for your car.
“Every time you go to spend money, you ask yourself the question, ‘Is this a want, or is this a need?’ If it’s a want, do not buy it,” advised Orman.
Get as Much Pleasure Out of Saving as You Do Spending
It’s scary to feel that you live paycheck to paycheck and think you won’t have enough money for retirement. And this makes it harder to save.
One of the best ways to overcome that fear is to automate savings by putting a set amount, say $50 or $100, into a Roth individual retirement account every month. You can open the account through a discount brokerage.
“Within the Roth IRA, put [your money] in a high-yield savings account,” Orman advised. “Why? Any money you originally put into a Roth IRA you can take out without any taxes or penalties, regardless of your age or how long the money has been in there. You can always withdraw your money if an emergency happens, but in the meantime, you’ll have developed a savings habit.
“Once you start to automate savings and you love savings as much as you love spending, I’m telling you, you will not be living paycheck to paycheck,” Orman said.
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This article originally appeared on GOBankingRates.com: Suze Orman: Women Need To Follow 3 Financial Strategies for a Secure Future
