Author: Cheryl
•11:46 AM
I have been a big follower of Suzie Orman for quite a while. I have read some of her books, watch the show on Saturday night. But I have to say I don't do everything she says.

Yesterday, Suzie was on Oprah with her new advice with the recession. She completely reversed her decision on paying off your debt to building your savings first instead and just giving the minimum to all cards until that is done. I don't think I can completely go along with this. I understand her urgency to get people to build their savings. I just increased again our amount going to savings as we definitely are a long way from our fully funded emergency fund, but I am just not ready to give up on our credit card debt reduction.

I have come so far, and we have both worked hard to get it down. I am loving the results and still feel this is a good part of the process. I still feel we can do both. So as of today, I increase our savings but continue building the snowball.

How did her advice sit with you?
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1 comments:

On April 3, 2009 at 3:24 PM , Cin said...

I have followed Suzie for a while and I was shocked yesterday to hear her say NOT to pay more than the minimum on our credit cards. I thought about it and thought about it and then realized, I do think she is correct right now.

We need more cash in the bank. If we are paying more than the minimum on the cards and don't put the cash in the bank there could be a double whammy.

It is true, if you pay off the card the account could be and in most cases is being closed by the company. Credit card debt is unsecured. These companies need you to be in debt to keep you. If you lose your job, they won't give you any credit if you don't already have some available. Plus you won't have any cash if you put it all on the cards.

I think it is always in our best interest to get out of debt, however, this is a new world and a new recession. There are still many months and possibly scary years ahead and we all need a cash reserve AND a credit line.

I thought about it, cancelled my $257 payment to Macy's, made my payment for $57 which was still way above the $9 minimum and then put the other $200 in the bank.

It's a Suzie compromise and I feel ok about it.