Suze Orman: Why Getting Strict with Your Money Is the Best Gift To Yourself
Written by
John Schmoll
Edited by
Rebekah Evans
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Financial guru Suze Orman is well-known for telling Americans to stay out of debt. While not a controversial stance, in a blog post, the personal finance expert posed a hot take — that true generosity begins with looking at your situation alongside that of a recipient before deciding to give of your money and time. Orman didn’t argue to stop giving to charity, but rather to consider if your giving is as generous to you as it is to the person benefitting from the gift.
It’s a fair question, as over half of Americans (54%) gave to charity even though they were strapped for cash, according to Wells Fargo. In response, Orman called Americans to be stricter with their giving, thinking of it as a gift to yourself.
“True generosity means that giving must not drain you in the process. This is not about becoming selfish. It is about caring about yourself as much as you care about others. Not less,” Orman said. Here are three ways getting strict with your money is the best gift you can give yourself.
In contrast, here are signs you are too strict with your money.
It Can Boost Your Retirement Savings
It’s natural for most parents to want to help their children. However, Orman posed a thought to call that into question. “Do you support adult children when it means you are falling behind on your retirement savings?” Orman said.
The question is fair when looking at the state of retirement savings for many Americans. A troubling 20% of Americans over 50 have no retirement savings and 61% are concerned their savings will run out during retirement, according to AARP.
Orman argued Americans need to be more thoughtful when making giving decisions. “It is easy to tell ourselves that all giving is good because it is for the benefit of someone else. But that’s only half the story. True generosity means that giving must not drain you in the process,” Orman said.
With 50% of parents financially giving to adult children, according to Savings.com, it’s understandable why Orman argues for prudence when giving to adult children. After all, there are no loans for retirement.
It Lets You Prepare for Emergencies
Giving to others is generous, but what if it hinders your ability to care for your needs? Rather than give at first blush, consider diverting those funds elsewhere.
“Do you give money to others when it means depleting your savings?” Orman said. If that’s your situation, Orman argued that saying “no” is being generous to yourself. The state of many Americans’ ability to manage emergencies backs up the point. According to Forbes, 56% of Americans have less than $2,000 saved for emergencies, with 20% having nothing.
Giving to people in need is caring but sometimes saying no and diverting those funds to savings is a better gift to you.
It Can Help Reduce Credit Card Debt
Orman has long contended against amassing debt. In another blog post Orman argued Americans aren’t powerless against credit card debt. The guru commonly recommends Americans with debt take one step to attack credit cards, then another until momentum develops.
Giving is noble, but for Americans with credit card debt, it’s wiser to apply extra funds toward payments. The average American household with credit debt has indebtedness of over $6,000, according to the Federal Reserve Bank of St. Louis. High-interest debt can be suffocating. It pays to eliminate that before giving of your resources.
Not giving may seem unloving, but it’s important to show love towards your finances. “Saying no out of love rather than saying yes out of fear is how you focus on building your emergency savings and retirement accounts,” Orman added. Saying no to those in need may seem harsh, but caring for yourself is the best thing many Americans can do for their money.
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