Credit card debt can feel like an overwhelming burden. Financial guru Suze Orman spoke with TheStreet to reveal her practical strategies for tackling debt head-on and building a secure financial future.
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Full Video Transcript Below:
SUZE ORMAN: You have to face it to erase it. You need to tell every single person you know how much credit card debt you have. Because if you have credit card debt, you have been paying for your present day desires, but your costs are going to be your future day needs. And everybody thinks that you have money because you go out and you put it on a credit card and you treat your friends and you’ve just leased a car and you’ve done all these things. If you have credit card debt and people don’t know you have credit card debt. You are a financial liar. So the way that you turn debt around is to first stand in your truth and tell everybody that you have debt, so they’ll stop asking you to go out to eat and do all these things because you cannot afford it.
I think your number one priority really should be getting out of debt, especially with interest rates as high as they are. So it’s ridiculous right now to have money in a savings account, maybe giving you 4% if it’s a money market fund or something like that, and be paying 15, 16, 17% non-tax deductible on credit cards, you would be far better off getting rid of your credit cards than saving. And if all of a sudden you need some money and you’ve been bringing down your credit or your debt on your credit cards, you can always use your credit cards again to make up for that.
You know you have to get more pleasure out of saving than you do spending. So what I would tell you to do is, number one, you need to live below your means, not within your means, but below your means, but within your needs. What is a need? A need is medicine. A need is food. At a grocery store, a need is gasoline in your car so you can get to work, you know, so you live below your means but within your needs. If you don’t need it, just don’t buy it. It’s just that simple. And if you were to do that for at least six months, you would be surprised at how your entire financial situation has turned around.