Spending More Than You Make? Here's Some Advice

We are a nation stressed out by our lack of savings. I see a constant stream of surveys that deliver some version of the same message: Most American households don’t have a safety net when it comes to savings. An alarming number of households say they couldn’t afford to cover an unexpected expense of $500 or $1,000. Every week, it seems there's a new worrisome report about just how many of us are stressed out by what we haven’t yet managed to save for retirement.

I hear and feel the stress coming from so many women who want nothing more than to make sure that they, and their family, are safe and secure. A woman’s nurturing gene is so strong; wanting to take care of loved ones is paramount.

In order to protect and care for yourself and your family, being able to save is so important. For those “life happens” expenses that always seem to crop up at the wrong time. And for retirement. If you don’t save today, how will you be able to support your tomorrows?

That said, I know how hard it can seem to put money aside for an emergency or your future retirement, when the cost of taking care of yourself today is rising faster than your income.

But I bet you can manage to save something each month. Find $50 a month to save, and that’s a $600 emergency fund in just one year. Make it $100 a month and you will have $1,200 for a rainy day. That not only should bring you some peace of mind, but it can save you thousands. Having the cash to pay an unexpected bill — a medical copay, a car repair — rather than put it on a credit card that you will end up paying 15% or more interest on will save you plenty. Every dollar you save for retirement today has the potential to grow into more than a few dollars to support you later on.

It’s really quite simple to get into a habit of saving more. Any time you are about to make a purchase I want you to stop and ask yourself this question:

· A need is fixing the car so you can get to work. A want is leasing or buying a newer car, even though the one you have is perfectly reliable.

· A need is paying for groceries. A want is spending $50 for drinks and nibbles with friends a few times a week.

· A need is paying your health insurance premium. A want is paying for your kid to attend a private college, when an in-state public school will help your family avoid financial ruin.

For one month, I challenge you to challenge yourself. Every time you are about to buy something, stop and ask yourself if it is a need or a want.

If it is a want, don’t buy it. Or at the very least, don’t buy it for a few days. If you are shopping online, any purchase should remain in your cart – unpurchased – for at least two days. I bet you will often not even return to the cart. Or when you do, you will realize that you didn’t really need that item; it was just some in-the-moment retail therapy.

I also want you to print out your two most recent bank statements and credit card statement. Haul out the highlighter and circle everything that was a want. (Or if you prefer, track your spending in an online app such as Mint.) I think you will be shocked at how it all adds up. Take the total and multiply by 0.25. If you were to cut your wants spending by 25% each month, that’s how much you would save. If you are serious about taking control of your financial life, I challenge you to cut the wants by at least 75%. Try it for a few months. I think you will be amazed how easy it is to spend less, and how empowering it is to become a saver.

All of us have the power to take control of our financial life. Sometimes, we just need some inspiration to get started. That’s why I am so excited to bring my Women & Money financial empowerment message to a live audience at the Apollo Theater on September 15th. I’d love to see you there, or tune into The OWN Network on Oct 1 at 8 p.m. for a taped version.

An updated 2018 version of Suze Orman’s best-selling book, Women & Money is now available.