Suz Orman says we must all focus on this because “the government cannot save you”

When it comes to personal financing, Suz Orman Clear: You are the best person to care for your financial future. In a modern episode of herWomen and money“Podcast, the listeners reminded that” the government cannot save you, “and encouraged everyone to take responsibility for three main areas: debts, income, expenses and investments.

Here is how Orman collapses – and what are the measures that you suggest taking now.

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Orman separates the debts into two categories: good and bad. Good debt may include a real estate loan or a car loan – especially if you need the car to reach work. On the other hand, the non -high debt usually comes in the form of high -benefit credit cards balances used for unnecessary spending.

If you are dealing with Credit card debtsOrman suggests organizing your cards according to the interest rate, from top to lower. Write the minimum payment due to each one, then the total of that minimum and add 20 % to the total. You will make minimal payments on all cards, but apply an additional 20 % to the card at the highest interest rate. Once this is paid, you can turn on the entire amount that you were paying to the next card – and so on – until the debt disappears.

It also encourages maintaining your credit limit, excluding that the closing cards can reduce the degree of Fico.

It is heading: Can you guess the number of retirement with a nest egg of $ 5,000,000? The percentage may shock you.

The next area Orman He says the evaluation is your cash flow – what will happen for what is happening.

Orman suggests a simple exercise: Look at what you spent over the past year and divided this number on 12 to get the average monthly expenses. Then compare this number with post -tax income, after retirement. If your income does not cover your expenses – or hardly do – you have some work to do it.

“You have to either gain more, or you have to spend less,” she says. “Or you can do both.”

Orman confirms that your relationship with money is not only related to reaching a specific amount of dollars. It comes to how you appreciate the money – and therefore, yourself. If you are proactive about your income and expenses now can help you avoid painful surprises in the line.