Suze Orman, a well-known finance personality, has issued a warning about a looming financial “pandemic” in the United States. Despite the country avoiding a deep recession, many Americans are still burdened with debt due to rising costs. Orman made these remarks during an interview on Max’s “Who’s Talking to Chris Wallace?” hosted by CNN anchor Chris Wallace.
During the discussion, Wallace highlighted that credit card debt has surpassed $1 trillion for the first time ever, household debt is at record levels, and interest rates on that debt continue to rise. However, Orman emphasized that Americans cannot rely on the government or the economy to save them this time. She believes that individuals must take responsibility for their financial well-being and act as their own “financial vaccine.”
Orman explained that during the initial years of the COVID-19 pandemic, many Americans saved substantial amounts of money. Stimulus checks, paused student loan repayments, and reduced spending on commuting, coffee, travel, and dining out contributed to these savings. However, once restrictions were lifted, people splurged on luxury items, concert tickets, and travel, depleting their savings. As a result, 80% of Americans now have less cash on hand than they did at the beginning of the pandemic.
Orman expressed concern that if Americans do not regain control of their finances soon, they may struggle to pay off their credit card balances, leading to an increase in bankruptcies. To avoid this, she advised individuals to closely examine their spending habits, keep track of their income and expenses, and stick to a budget. Experts recommend using the avalanche method to pay off debts, where the focus is on the balance with the highest interest rate. Consolidating debts and establishing an emergency fund are also recommended. Orman suggests saving between $1,000 to $2,000 as a starting point for an emergency fund. Seeking guidance from a financial adviser may also be beneficial in achieving savings goals.
It is important to note that this article provides information and should not be considered as financial advice.
