The pandemic has had us thinking more about our health in 2020, but we Americans need to be just as attentive to our wealth, says Suze Orman, the personal finance author, TV personality and podcaster.
During a CNBC virtual summit on Tuesday, the money guru shared how she wasn’t paying close enough attention to her health — and as a result, she had a medical scare that could have been far worse.
After ignoring warning signs for months, Orman underwent 12 hours of emergency surgery in July to remove a tumor from her spine.
The episode reminded her to face challenges more directly. She says these are a few ways to adapt that thinking to your finances.
1. Face your fears
Orman says she hadn’t taken the time to deal with her health because she was afraid to find that something was wrong.
“It’s the same thing with your wealth,” she says. “You don’t want to know how little money you have in a retirement account, or you don’t want to know how much money you owe on your credit card, so you just don’t open up your statements.”
Your financial well-being is very similar to your physical well-being. In Orman’s words: “You can’t just put it off.”
You have to be in tune with your financial situation, and if you’re struggling with debt, you need to “face it to erase it,” she says.
If you’ve got a serious debt ailment that needs treatment, consider taking out a debt consolidation loan to replace all of your high-interest credit card balances with a single loan at a lower interest rate.
2. Confront your financial compatibility
When you’re single, you don’t have to depend on anyone else or worry about another person’s financial habits. But once you meet someone, you’d better make you’ve found a true financial match, Orman said during the event on Tuesday.
What does that mean? “That they respect money and don’t spend it frivolously — that you have the same financial values,” she says. “Because if you don’t, all the hard work will absolutely go down the drain if you marry a financial loser.”
Orman adds that you need to have a difficult conversation with yourself if you’re already in a relationship with someone who isn’t the right financial fit.
Arguments over money are the No. 1 cause of divorces, she says. But a split is no magic fix for your finances: 40% of respondents to a MoneyWise survey said divorce had saddled them with more than $5,000 in debt.
3. Take control of your bills
A monthslong break from federal student loan debt is coming to an end soon. Borrowers will need a plan when that government COVID relief program runs out and payments start again after Jan. 1.
Orman says she hopes people were able to stockpile as much cash as possible while the feds were handing out stimulus checks and helping Americans postpone bills. Otherwise, you may need to work with lenders on repayment plans.
If you have a lot of college debt, you also should look into refinancing your student loans, because interest rates are lower than ever.
In today’s low-rate environment, it’s a good time to refinance other debt, too. Some 18.5 million mortgage holders are in a prime position to refi their home loans and save an average of more than $300 monthly, the mortgage data firm Black Knight said earlier this month.
Good refinance candidates include those with solid credit scores and at least 20% equity in their homes.
“But there’s nothing wrong with selling your home right now if you’re having trouble meeting your mortgage payments,” Orman says. “Downsize if you can. The more money you save today, the better your tomorrow.”
