Suze Orman, financial advisor, author, and podcaster, has monitored American families’ economic well-being for decades. While her tone is often blunt, Orman knows what she’s talking about and is unafraid of straight talk.
I’ve curated a list of what Orman believes are the critical mistakes men and women make that keep them poor. We can all learn a thing or two from Orman’s advice. How many of these mistakes apply to you?
1. Daily Coffee Shop Runs
Your traditional morning Starbucks or Dunkin run is costing you in the long run, and according to Suze Orman, it’s one of the primary reasons you’re staying poor in 2024.
I’m amazed at the lines at coffee shops in the morning. Any cup of coffee I’ve ever had has tasted a million times better (and is much cheaper) than any caffeine fix from a local shop. Cut this habit and watch the savings roll in.
2. Impulse Purchases
Every small impulse buy adds up significantly, so do whatever it takes to cut down on these unnecessary expenses. Avoid buying a water or energy drink when fueling your car at a gas station and last-minute treats in the grocery store checkout lane. Practice fiscal discipline.
To take this strategy further, delete shopping apps like Amazon from your smartphone to eliminate the urge to buy something you don’t need.
3. Too Much Pampering
While spending some hard-earned money to pamper yourself is fine, it’s not the best idea if you’re looking to level up your financial well-being. Millions of people indulge in pedicures, manicures, spa treatments, and other luxuries, but it keeps them poor.
Think of all the money you’d save if you stopped doing these things. Before you know it, you won’t believe you ever spent money on a pedicure in the first place.
4. Insisting on Bottled Water
It baffles Orman that so many men and women insist on buying their water in individually sized plastic bottles. It’s harmful to the environment, and it’s not economical.
Instead of buying case after case of bottled water, invest in a home water filtration system, a Brita filter, or buy a refillable water dispenser. Any of these options are more financially savvy than buying endless amounts of bottled water.
5. Overpaying For Cable, Internet, and Cell Phone
In 2024, everything is too darn expensive, but it doesn’t have to be. It’s time to take stock of how much you pay for cable TV, internet plans, and cell phone service because you’re probably paying too much.
You don’t “need” cable. Find a few streaming services instead. In most cases, you also don’t need ultra-high-speed internet; the basic plan is more than satisfactory. Lastly, use a lesser-known regional cellular provider to save money instead of paying far too much for Verizon or AT&T.
6. Too Much Dining Out
Even if you’re a below-average home cook, making meals at home is almost always more financially responsible than dining out. Eating at a restaurant may be more appealing than preparing a meal yourself, but it’s time to think smart.
Cooking at home can be surprisingly affordable. Keep an eye out for weekly supermarket deals and clip coupons, and before you know it, you’ll forget why you ever dined out in the first place.
7. Gambling
Whether you’re making regular trips to your local casino or throwing money away on lottery tickets, gambling is one of Orman’s pet peeves. It’s the literal definition of a money drain. The house always wins in the end.
Instead of gambling, consider putting that money into a high-yield savings account. Before you know it, you’ll have more money than you know what to do with (and you made it without gambling your future).
8. Overspending on Gifts
Orman cannot believe how many people chase clout by giving extravagant gifts to family and friends for special occasions and holidays. If you’re drowning in debt, spending more on presents for others won’t help.
While you may think others admire you for your generosity, you’ll be amazed at how quickly their admiration turns to shock when they discover you’re financially irresponsible.
9. Driving New Cars
It’s straightforward, really: stop buying new cars. Orman firmly believes in owning vehicles that won’t put you further into debt, which means never agreeing to loan or lease a car that costs more than you can afford.
Living below your means is a way to spend your days mindfully without being irresponsible. For many men and women who subscribe to this theory, it means buying an affordable used car that you can count on with nary a substantial monthly payment in sight.
10. Credit Card Interest
According to Orman, the interest fees people rack up with excessive credit card use is one of the primary mistakes consumers make. Responsible credit card use means paying off your balance every month to avoid interest fees.
It’s surprisingly easy to swipe a credit card and “deal with it later,” but this way of thinking keeps you poor. Pay with cash or via debit card until your spending is under control.
11. Impractical Homes
Owning a dream home is a primary goal for many Americans. Unfortunately, most people need to realize that it’s not feasible for them. There’s nothing financially savvy about putting yourself into heavy debt because you tell yourself you “deserve” a four-bedroom home with a pool in the backyard.
Living below your means applies to homeownership as well. If you can’t afford a home, don’t bend over backward to make it happen. Some things are not meant to be.
12. Excessive Bank Fees
Believe it or not, not all modern banks nickel-and-dime their customers every chance they get. Free checking accounts and ATM withdrawals can be found if you look hard enough, especially with online-only banks.
You’re doing a disservice to yourself if you still put up with monthly statement fees and other predatory bank practices. If you encounter them, it’s time to switch banks and say goodbye to needless fees.
13. Ignoring Your Savings
It’s tough to ignore your savings accounts entirely, especially for those living paycheck to paycheck. However, experts like Orman believe your savings account can mean the difference between living poor and staying poor.
The more money you put away every month, the more cash you have available in case of emergencies. Many people living in financial ruin don’t have a backup fund in case disaster strikes, which further puts them into crippling debt.
14. Extended Warranties
I don’t know who needs to hear this, but people need to stop wasting money on useless extended warranties. It doesn’t matter if it’s a car, a refrigerator, or a smartphone. These warranties are filled with so much fine print that it’s a miracle when they’re actually effective.
Salespeople make commissions by selling these warranties, so it makes sense that they’re pushed onto consumers more often than not. Stay vigilant, and don’t let their sales pitch fool you.
15. Subscriptions That Go to Waste
It’s time to audit your monthly subscriptions and memberships. Ask yourself, “Which of these do I use on a regular basis?” If you pay for a gym membership and rarely work out, that’s a cost you’ll never recover.
By eliminating pointless subscriptions, you’re putting more money into your pocket at the end of the day. Who doesn’t love that?
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