Suze Orman offers blunt advice on crushing credit card debt

The Street

Financial guru expert offers practical advice on erasing debt.

Transcript

00:00You have to face it to erase it.

00:02You need to tell every single person you know

00:04how much credit card debt you have.

00:06Because if you have credit card debt,

00:09you have been paying for your present day desires,

00:13but your costs are going to be your future day needs.

00:17And everybody thinks that you have money

00:19because you go out and you put it on a credit card

00:21and you treat your friends and you've just leased a car

00:24and you've done all these things.

00:25If you have credit card debt

00:28and people don't know you have credit card debt,

00:30you are a financial liar.

00:33So the way that you turn debt around

00:36is to first stand in your truth

00:39and tell everybody that you have debt.

00:41So they'll stop asking you to go out to eat

00:43and do all these things because you cannot afford it.

00:46I think your number one priority

00:48really should be getting out of debt,

00:50especially with interest rates as high as they are.

00:54So it's ridiculous right now

00:55to have money in a savings account,

00:58maybe giving you 4% if it's a money market fund

01:01or something like that.

01:02And be paying 15, 16, 17% non-tax deductible

01:06on credit cards.

01:08You would be far better off getting rid

01:10of your credit cards than saving.

01:12And if all of a sudden you need some money

01:14and you've been bringing down your credit

01:16or your debt on your credit cards,

01:18you can always use your credit cards again

01:20to make up for that.

01:22You have to get more pleasure out of saving

01:24than you do spending.

01:26So what I would tell you to do is,

01:28number one, you need to live below your means,

01:32not within your means, but below your means,

01:35but within your needs.

01:37What is a need?

01:38A need is medicine.

01:40A need is food at a grocery store.

01:42A need is gasoline in your car so you can get to work.

01:47So you live below your means, but within your needs.

01:52If you don't need it, just don't buy it.

01:55It's just that simple.

01:56And if you were to do that for at least six months,

02:00you would be surprised at how your entire

02:02financial situation has turned around.

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