Suze Orman: The No. 1 Greatest Lesson When It Comes To Your Money

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Learning about the smartest money moves that will help you build and preserve your wealth can seem complicated. Sometimes getting familiar with the terms and concepts feels a little like hearing the staticky crackle of Charlie Brown’s teacher in your head. But what if the No. 1 lesson you should learn about your money is actually incredibly simple? According to personal finance expert Suze Orman, it’s probably a lesson you’ve heard at least once: Plan for “what if.”

What if you experience a sudden job loss or a health crisis? Would you be able to support yourself financially? “What ifs” are the life events that can derail even the best-laid plans — and if you don’t prepare for them with a robust emergency fund, Orman said you’re leaving yourself vulnerable to financial devastation. The greatest lesson you could ever learn about your money is to save up and steel yourself for those “what ifs.”

In an episode of her podcast, Orman broke down why she emphasizes this lesson so strongly.

Don’t Think You’re Safe Just Because You Have a Good Job

Let’s say you’ve got a great job. You’re earning good money, and you have great benefits. You’re a homeowner and your car is in good shape, too. By all accounts, you’re living the American dream. You feel secure with that regular paycheck coming in. But then it happens: You’re laid off. Or, if you were one of the many federal employees impacted by the recent government shutdown, you’re furloughed or compelled to work without pay.

The plight of government employees during that shutdown gives Orman’s point urgency. She cautioned that the bottom can drop out of your world faster than you might think — and for reasons beyond your control.

“And now you don’t know what to do, and then all of a sudden you find yourself having to go to a food bank, even if you’ve had a great job,” she said. “And once again, we go back to the lessons of life, and what is the greatest lesson of life when it comes to your money, if you ask me? It’s to plan for the what-ifs of life.”

Plan Today To Protect Tomorrow

Planning for those “what ifs” involves one simple yet powerful task: Orman wants you to save eight to 12 months of expenses in an emergency fund.

She knows you have a lot of other financial goals competing for your attention — buying a house, saving for a vacation or redecorating your place. You might even want to put the money you’d save for emergencies into the stock market to grow it.

Still, that plan — or, rather, inaction — assumes tomorrow will look exactly like today. The same paycheck you rely on to achieve those goals may not be there tomorrow. And what does tomorrow look like if you haven’t saved enough to cover your basic expenses?

This is why Orman calls building an emergency fund a matter of planning today to protect tomorrow. Going on vacation is fun, but your Instagram Reels won’t pay your rent. Jumping on the hot new investment might be exciting, but it won’t feed you if you can’t afford groceries.

“That’s money that you need in case you can’t pay your bills that must be paid,” she said.

Investing In Knowns vs. Unknowns

One of Orman’s listeners learned this lesson the hard way. She recounted an email she received from a man who admitted to investing all the money that would’ve gone into his emergency fund into Palantir.

“Just so all of you know, by the way, everybody, Palantir went from $203 a share down to about $169 a share in a day or two, and that’s what he put all of his money into?” Orman said.

It turns out he really needed that robust emergency fund: He was a federal worker and lost his job. From his example, Orman drew a key lesson: You must balance investing in known entities, like the stock market, with unknowns, like the possibility you could end up in a car accident or get critically ill. These possibilities require you to prioritize saving for an emergency fund while also growing your money through investing.

“All kinds of things can happen, and yet you never believe that it’s going to happen to you,” she said. “And when you don’t believe that it’s going to happen to you, chances are that’s exactly when it is going to happen to you.”

Learning the Lessons Money Has To Teach You

This might seem like a downer, but your takeaway shouldn’t be all doom and gloom. Your current financial situation — as well as your planning habits — teaches you a lot about what you value and where you need to grow. Building your emergency fund to prepare for those big “what ifs” shows that you’ve learned to prioritize your safety and stability.

“I don’t care how much you want to go on a vacation or you want a massage or you want to do your nails every week or whatever it may be, you have got to make your number one priority,” she said. “You have got to make it your number one priority to have an eight- to 12-month emergency fund.”

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