When it comes to managing money, Suze Orman doesn’t hold back. She’s spent years sounding the alarm on wasteful spending, debt traps, and financial habits that are quietly undermining our security. Her advice goes beyond the usual “cut out coffee” mantra, instead, she’s all about exposing the habits that might seem harmless at first but can snowball into big financial troubles over time.
You might be thinking, “My spending isn’t that bad,” or “I’m just trying to enjoy life.” But the truth is, according to Suze, some of our day-to-day decisions can chip away at our savings and set us up for financial headaches down the line. In fact, a few of these habits might feel so ingrained that we don’t even question them until it’s too late.
So, if you’re ready for a little self-reflection (and maybe a nudge to rethink a few choices), here are 14 common habits Suze Orman warns are sabotaging financial security, and what to consider doing instead.
1. Relying on Credit Cards for Lifestyle Expenses
Credit cards are convenient, sure, but relying on them to cover daily or lifestyle expenses can quickly spiral into a mountain of debt. It’s one thing to use a credit card in a pinch, it’s another to depend on it regularly for things like dining out, entertainment, or shopping sprees. According to Suze, this habit is one of the fastest ways to lose financial stability.
When you swipe without a plan to pay it off, high interest rates will sneak up on you, making it harder to dig yourself out. Suze suggests using credit cards only for things you can pay off monthly. Better yet, focus on saving a small amount each month so you’re less tempted to reach for that card in the first place.
2. Skipping an Emergency Fund
An emergency fund isn’t just a “nice-to-have”, it’s essential. Suze explains that without one, people often end up relying on high-interest loans or credit cards to handle unexpected expenses like car repairs, medical bills, or even job loss. And emergencies, unfortunately, don’t come with a warning.
Even starting with a small amount each month can make a difference. Suze recommends aiming for three to six months’ worth of living expenses saved up. It’s a buffer that gives you time and options, making sure that a surprise expense doesn’t turn into a financial disaster.
3. Impulsive Buying
Those little “treat yourself” moments feel good at the moment, but they’re often a big drain on your finances. Suze warns that impulse purchases are one of the sneakiest ways we sabotage our budgets. A coffee here, a gadget there, it doesn’t seem like much until you add it all up at the end of the month.
A strategy Suze recommends is to practice the 24-hour rule, if you see something you want, give it a day before buying. Most of the time, that “need” fades, and you’re left feeling grateful you didn’t waste the money. This small habit can save you more than you think over time.
4. Ignoring Retirement Savings Early On
Too many people think they’ll worry about retirement “later,” but Suze insists that time is your biggest advantage when it comes to saving. By starting even small contributions early, you’re giving your money time to grow, thanks to the magic of compound interest.
Retirement may seem like a far-off concern, but building a nest egg now means you won’t be scrambling later. Suze’s advice? Even if you can only contribute a small amount each month, start as soon as you can. Over decades, that modest amount can snowball into a secure retirement fund.
5. Overlooking High-Interest Debt
Credit card debt, especially with high interest rates, can be financially devastating if ignored. Suze emphasizes the importance of tackling this kind of debt as soon as possible because it grows rapidly, and paying only the minimum can mean years of payments for something you no longer even own.
Instead of letting high-interest debt linger, Suze recommends an aggressive approach, pay off the balance as quickly as possible, starting with the highest-interest debts. Every dollar you save in interest can go toward something much more rewarding, like your savings or investments.
6. Comparing Yourself to Others Financially
Keeping up with others, be it upgrading your phone, buying the latest gadgets, or taking lavish vacations, can drain your finances faster than you realize. Suze calls this the “comparison trap,” a habit that can lead to unnecessary spending.
Financial security is a personal journey, and trying to match someone else’s lifestyle won’t get you there. Instead, Suze suggests focusing on what truly matters to you. Shifting your mindset from “keeping up” to “building security” can save you from unnecessary expenses and stress.
7. Ignoring Your Credit Score
Your credit score might seem like something that only matters when you’re buying a house or a car, but Suze explains that it’s crucial to pay attention to it. A low score can result in higher interest rates, which means more money spent on loans and credit.
To keep your score healthy, pay your bills on time, keep balances low, and monitor your credit report for errors. Maintaining a good score can open up better financial opportunities, from lower rates to better loan terms, making your financial life easier overall.
8. Avoiding Financial Conversations
Discussing finances with a spouse, partner, or even a financial advisor can feel awkward, but Suze believes open communication is crucial. Avoiding these conversations often leads to misunderstandings, hidden debts, or unrealistic financial expectations.
Sitting down for a financial check-in can help align your goals and set up a shared plan. It doesn’t have to be a huge talk, just a regular check to make sure everyone’s on the same page. This way, you’re more likely to avoid surprises and reach your goals faster.
9. Skipping Life Insurance When You Have Dependents
Life insurance may not seem essential, but Suze stresses that it’s a must if you have people who depend on your income. Without it, your family could be left without financial support during an already challenging time.
Life insurance isn’t just a “nice to have,” it’s about protecting the people you love. Suze recommends a policy that covers at least 10 times your income to give your family a secure safety net.
10. Not Diversifying Your Investments
Putting all your money into a single type of investment can be risky. Suze warns that a lack of diversification means your entire investment could suffer if that one sector goes down.
A diversified portfolio, stocks, bonds, real estate, etc, reduces risk because not all assets are affected by market changes in the same way. Think of it as giving your money a bit of a safety cushion, helping it grow steadily.
11. Neglecting Home Maintenance
It’s easy to put off that leaky faucet or peeling paint, but Suze says skipping home maintenance can lead to even more expensive problems down the line. Neglecting small repairs can result in bigger (and pricier) fixes later.
Keeping up with regular home maintenance not only keeps your living space pleasant but also preserves its value. A well-maintained home is an asset, while a neglected one can quickly become a financial liability.
12. Borrowing from Your Retirement Savings
Tapping into your retirement fund might seem like a quick fix, but Suze stresses it should be a last resort. Every dollar you take out now is a dollar that can’t grow for your future.
Instead, explore other ways to cover your short-term needs. Letting your retirement funds stay untouched allows them to continue growing, helping you secure a more comfortable retirement.
13. Underinsuring Your Assets
Being underinsured can lead to financial nightmares if something goes wrong. Suze stresses reviewing your insurance policies regularly to ensure they provide enough coverage for your home, car, and valuables.
A small monthly premium can save you from huge out-of-pocket expenses if disaster strikes. Review your policies regularly and adjust as needed to protect your investments.
14. Rushing into a Mortgage
Buying a home is a major decision, and Suze warns against rushing into a mortgage without considering the full financial picture. A mortgage payment might seem manageable until you add in maintenance and unexpected repairs.
Take your time and ensure that your mortgage fits comfortably within your budget. Homeownership should enhance your financial security, not create additional stress.
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With an honors degree in financial engineering, Omega Ukama deeply understands finance. Before pursuing journalism, he honed his skills at a private equity firm, giving him invaluable real-world experience. This combination of financial literacy and journalistic flair allows him to translate complex financial matters into clear and concise insights for his readers.
With an honors degree in financial engineering, Omega Ukama deeply understands finance. Before pursuing journalism, he honed his skills at a private equity firm, giving him invaluable real-world experience. This combination of financial literacy and journalistic flair allows him to translate complex financial matters into clear and concise insights for his readers.
