• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

1. Don't miss your student loan payments

Struggling with student loan debt? Whatever you do, don't just throw up your hands and stop paying.

Even though student loan payments are paused and some debt has been forgiven, Orman said "start paying your student loans right now".

In an August podcast episode, Orman recommended prioritizing your student loan payments now while the freeze is still active.

"Since we know the pause is going to end, why not start making payments on your student loan right here and right now at that 0% rate? Because the more you pay at 0%, the more your student loan will decrease."

"Make paying back your student loan the very first bill you pay," Orman says on her Facebook page. "It is more important that you make your student loan payments on time each month than any other bill."

She has called student loan debt "the most dangerous debt you can ever have" because you can't erase it through bankruptcy.

In a March 2023 podcast, Orman said "So this kind of debt currently follows you all the way into old age."

Kiss Your Credit Card Debt Goodbye

Millions of Americans are struggling to crawl out of debt in the face of record-high interest rates. A personal loan offers lower interest rates and fixed payments, making it a smart choice to consolidate high-interest credit card debt. It helps save money, simplifies payments, and accelerates debt payoff. Credible is a free online service that shows you the best lending options to pay off your credit card debt fast — and save a ton in interest.

Explore better rates

2. Don't ever co-sign a loan

When a friend or family member in need asks you to co-sign a loan, Orman says the only correct response is to turn them down.

As she puts it: "Don’t be afraid to say 'no to others and say 'yes' to yourself."

When you co-sign a loan, you become legally responsible for paying back the money. Life is unpredictable, and if anything happens to prevent the borrower from repaying the loan, you’ll be on the hook to make the payments.

Plus, if the borrower is so much as late on a few payments, your credit score could take a hit.

3. Don't let debt linger

"Debt is bondage,” Orman once told CNBC. "You will never, ever, ever have financial freedom if you have debt."

She warns that big problems can happen when you have to reach for your credit cards to cover unexpected expenses.

The average credit card interest rate stands at 22.9%, so the longer you put off paying down your credit balances, the more money you lose, and you can easily wind up paying for your purchases three or four times over.

And interest rates on all types of loans are likely to continue to rise this year.

Read more: * Americans are paying nearly 40% more on home insurance compared to 12 years ago — here's how to spend less on peace of mind

Discover the power of FreeCash – your ticket to easy money

Dive into a world of rewards at FreeCash where earning cash is as simple as a click. No gimmicks, just real cash for your time. Join the community of earners today and watch your wallet grow effortlessly.

Make Money Now

4. Don’t ever take out a payday loan

If you want to get a rise out of Suze Orman, just ask how she feels about payday loans.

“I am begging all of you, do not take a payday loan out,” she said on one episode of her podcast, going so far as to add that it’s the biggest mistake listeners could ever make.

Payday loans are tempting because they’re relatively easy to get when you’re strapped for cash. However, they’re offensively expensive. The typical annual percentage rate is 400%. By comparison, the average APR on credit cards is currently around 20%.

Several states have capped the APR on payday loans at 36% or have even banned the loans altogether.

5. Don’t retire owing money on your home

A survey from mortgage banker American Financing found that 44% of Americans in their 60s and 70s are still paying off a mortgage. And 17% said they don’t expect to ever pay it off.

Orman urges people to go into retirement mortgage-free, for two reasons: to stretch their retirement savings, and to rid themselves of debt — an albatross that affects even mental health.

“If you’re going to stay living in that house for the rest of your life, pay off that mortgage as soon as you possibly can,” Orman told CNBC in 2018.

But don't tap your 401K to make monthly payments or pay off your mortgage — or any other debt for that matter.

In a 2022 interview with Moneywise, Orman warned that using the money in that account "for anything other than retirement" can leave you financially vulnerable once you stop bringing in a paycheck.

Sponsored

This 2 Minute Move Could Knock $500/Year off Your Car Insurance in 2024

Saving money on car insurance with BestMoney is a simple way to reduce your expenses. You’ll often get the same, or even better, insurance for less than what you’re paying right now.

There’s no reason not to at least try this free service. Check out BestMoney today, and take a turn in the right direction.

Samantha Emann Senior Associate Editor

Samantha is a veteran editor with almost a decade of journalism experience. She graduated from Humber College’s journalism program and has written and edited for a variety of news organizations including The Toronto Star, The Hamilton Spectator, TC Media and Narcity. She also co-founded one of Canada’s first esports podcasts, Scrub League.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.