Suzy Orman Changes Strategy - Suzy Orman, the world renowned personal finance consultant has recently changed her stance on paying off credit cards as fast as possible. On a recent Oprah Winfrey show, Orman mentioned that Americans need to focus more on contributing money to an emergency savings fund, as opposed to larger payments to your credit card balances.
Orman’s change in strategy is a result of the current unemployment rate in the United States, which is at the highest level since 1983, 8.5% nationally. Even though many Americans plan it, an emergency savings fund is only in place with about 15% of adults in the U.S.A. An emergency savings fund is defined as having enough cash to pay your current living expenses for a minimum of 4 months, preferably 6 months.
In the interview, Suzy Orman did reiterate the importance of paying down high interest credit cards, but said in the interim people need to allocate more to savings and pay the minimum payments on your credit cards. |
