4 Financial Conundrums Suze Orman Solves
Written by
Jordan Rosenfeld
Edited by
Levi Leidy
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Not everyone has the financial literacy to know what to do with their money. While advice abounds on the internet, it can be overwhelming to know where to start.
Financial expert Suze Orman is a trusted voice in finance, especially for women, and many turn to her podcast, “Women & Money,” co-hosted with her wife, Kathy Travis, to get their financial questions answered.
In a Dec. 14 episode of “Women & Money,” Orman and Travis answer some financial conundrums sent in by listeners and offer solutions.
You Have To Face Debt To Erase It
A listener named Leslie, age 26, wrote that she took her boyfriend up on the opportunity to move across the country with him after he got a great job offer. She had no credit card debt, had paid off her car with an inheritance and was financially free and clear at the time of their move.
Cut to months later, and Leslie had racked up $10,000 in credit card debt. Leslie worked for a bank and could easily get help in paying down her debt through a personal loan, a balance transfer or other options, but felt too ashamed to talk about her debt with anyone.
Orman’s answer is that what was holding Leslie back was not the debt itself, but her attitude toward the debt.
“The problem is you cannot admit it to other people. Why Leslie? Do you feel ashamed of it? Do you feel like people will judge you?” Suze asked.
In order to get out of debt, Orman said, “you have to face it to erase it.” Orman believes in removing shame around debt. “How many times have I said that you have to stand in your truth and I have had people go out and scream it to the world: ‘I have credit card debt.'”
Speaking up and facing your debt is the first step to getting free.
When Can You Take Social Security Survivor Benefits?
The next question came from Kathy, who will be turning 60 next year. Her husband died in 1996, but she never remarried and has been working since 1982. She wanted to know if she could collect survivor’s benefits from her late husband’s Social Security benefits when she turns 60, worried that it would have a negative impact on collecting her own Social Security benefit at the retirement age of 67.
Orman insisted that Kathy should absolutely collect her survivor’s benefits, but claiming it before age 67 would reduce the benefit amount by 28.5%.
However, she would be able to get the full amount by the time she is 67. “So it’s like they reduce it, but you do not lose it,” Orman said.
Should You Go Low or High Risk With Extra Cash?
A listener named Lisa recently inherited $55,000 from her brother’s estate. She invested other inheritance money in a money market account, but wanted to know if it was a better idea to invest this new money in the money market account, as well, earning a bit over 4%, which is subject to a greater amount of risk, or to get a CD with Alliant at 5.3% for 18 months.
If safety is the goal, Orman said that putting the money into a CD is a better bet. But she doesn’t have to put it all in the 18-month type of CD. Orman recommended she could break the money into chunks and invest them in an 18-month, 20-month and 24-month CD to vary the liquidity of the money.
Don’t Let Fear, Shame or Anger Keep You From Earning Money
A listener named Sherry reported that she has a large sum of money in cash earning very little interest that she is afraid to invest because she has saved all of it herself. She doesn’t even trust CDs, which are known to be a low-risk investment.
Orman explained a saying she often repeats: “There are three internal obstacles to wealth: fear, shame and anger,” adding, “Your fear is keeping you from making the most out of the money that you have.”
Orman suggested that fear is holding Sherry back from earning money on her savings, and that she’s actually giving up the ability to earn a lot more money by not making an investment.
Orman reassured Sherry that CDs “are really safe and sound” and that on a $200,000 investment a person could earn at least $10,000 in interest per year.
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