“I know that sounds like a lot, but term life insurance is incredibly affordable. When considering a life insurance policy, Orman recommends one that pays 20 times the annual living expenses of your loved ones in the event of your death. If there are people in your life who depend on you for financial assistance, Orman says life insurance is a must. If You Have Dependents, Get Life Insurance By being proactive with your money, you’ve already avoided committing what might be the biggest money mistake of all. Tailor these tips to work for your own financial situation so that you’ll be on your way to managing your money like an expert. It’s another financial step to take that can keep you and your money growing for a long time to come. “Borrow the smallest amount of money possible and pay it back as soon as you can,” Orman said. Otherwise, you’ll be stuck paying more interest for a longer period of time, and that’s money you could have saved or invested elsewhere. “If you’re shopping for new wheels … don’t lease.” In fact, she said to go for a shorter, 36-month loan, even if longer terms or other financing deals are offered. “If the lessees are rolling into a new contract every three years … they’re going to be making monthly payments indefinitely,” Orman wrote. Nonetheless, Orman advised against leasing a car, unless you want to be making payments forever. If you lease a used or certified pre-owned car, you could save money because the vehicle has already gone through its biggest period of depreciation in value by the time you take the wheel. For one, it’s cheaper because a lease is not a loan and has no interest rate attached to it. Many people think the benefits of leasing a car outweigh buying one new. Just because a $30 monthly charge is now miraculously $10 does not make it a good deal.” 9. You will likely be offered a less expensive deal if you agree to remain a customer. “Cancel the No-Longer-Needs and stay strong. Orman recommends creating a master list of all of your subscriptions, then sorting them into “must-haves” and “no-longer-needs.” Just make sure you stick to your guns. Take a Good Look at Your Subscriptionsīecause we live in a time where subscriptions are offered right and left, there’s a good chance we don’t know exactly how many we’re signed up for. Making these cuts will help you to follow the suggested budget by Suze Orman.Make Your Money Work Better for You 8. You may want to skip a new outfit or that concert until you have saved up at least a six month emergency fund. Many of these categories can take the biggest hit right now. This means the amount you spend on your groceries, clothes, gifts and entertainment. At the very least, make a list of things that you should cancel if you were to lose your job.įinally, look at your discretionary spending and cut back. Additionally, look at cutting back your cable and for ways to reduce your utilities. Do you actually use your gym membership? If you don’t, you may want to get rid of it. Look at the ways that you can reduce these bills. This would include gym memberships, utility bills, cable and any other monthly expenses that you have. Trading down in car, refinancing your mortgage for a lower interest rate or selling items in order to get rid of your debt can help. You may not be able to reduce these bills, but if they take up a large portion of your salary you may need to do everything you can to reduce your payments now before you lose a job. This will include your mortgage, your utilities, your debt payments as well as the spending that you normally do.įirst look at your fixed bills, such as your mortgage and other debt payments. In order to reduce your spending, you should start by listing your normal expenses. This budget by Suze Orman can help you stay on top of your finances.īut how do you start living on half of your income now? It sounds as though you need to begin cutting your expenses drastically in order to follow this budget by Suze Orman. You can quickly build your nest egg, but you are also reducing your expenses now. She thinks that this will better prepare you to deal with a job loss in the future. In a recent episode of Oprah, Suze Orman advised people to begin living on one half of their income, and putting the rest into a savings account.
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