As the country emerges from the pandemic and people make their plans for the summer, it’s the perfect time for some financial advice from Suze Orman.
The New York Times best-selling author and personal finance expert shared some of her wisdom on TODAY with Hoda & Jenna Tuesday with a segment titled, “Can I afford it?”
A pair of TODAY fans gave Orman their personal spending scenarios, and she let them know in her trademark style whether it was a good idea to make the expenditure.
Orman, who celebrated her 70th birthday last week, answered the following questions:
Can I afford a car payment of $350 a month?
This question came from a 37-year-old divorced mother of two who wants to buy a reliable car. She has $4,000 in monthly income, $3,500 in monthly expenses, $5,000 in debt, $7,000 in cash savings and zero dollars of retirement money.
The mom plans to sell her current car, use some money from savings and ask for some financial help from her family.
The verdict? Denied.
Orman cited the $5,000 in debt, the lack of a 12-month emergency fund, and the reliance on family for extra money.
“What happens if your family gets in trouble and they can’t help you any more and you have payment?” Orman said.
Her advice was for the woman to look at a more affordable payment like $150-$200 a month for a car.
Can I afford to take off a year from work to travel?
The second caller was a 46-year-old woman who wants to take a year off from work to travel on a budget of $40,000.
She has a monthly income of $3,583 with no debt, $40,000 in liquid cash and $720,000 in her retirement fund. She also plans on selling some stocks and using her home as a short-term rental while she’s traveling to raise extra money.
Orman approved her trip as smart planning, although she did remind the woman that $40,000 now is half a million dollars in 30 years if she had put it into retirement planning.
“You should be so ecstatic and thrilled because look at the money you have,” Orman said. “Girlfriend, have the best time of your life!”
What is the best financial advice for this summer?
Orman’s advice for the current moment is the same as always, except with a pandemic-influenced reminder.
“One thing you can do really is to spend less and save more,” she said. “To remember how it was when you weren’t going out to eat during the Covid times and that you weren’t spending money just driving around.
“So really the one thing that you really can do is stick to your financial habits that you created during that year when we weren’t able to spend money. That’s a great place to start.”
How do I claim Orman’s free financial advice for TODAY viewers in honor of her birthday?
You can go to the Hoda & Jenna page and find Orman’s birthday free gift of her “3-Step Rest” online course to change how you think, feel and act with your finances.
The course is available for free for 70 hours until Friday at 11 a.m. EST.
Scott Stump is a New Jersey-based freelancer who has been a regular contributor for TODAY.com since 2011, producing news stories and features across the trending, pop culture, sports, parents, pets, health, style, food and TMRW verticals. He has tackled every assignment from interviewing astronauts on the International Space Station to prison inmates training service dogs for military veterans.