SUZE ORMAN ON OPRAH: RECESSION RESCUE ADVICE

Did you see financial expert, Suze Orman on Oprah today, April 2nd/09? Pretty sobering. The recession is affecting more and more people all the time. Due to this financial crisis 4.4 million jobs have been lost or in numbers we can get our head around; 15 jobs a minute. People declaring personal bankruptcy rose 31% in 2007-08. Bankruptcy filings are expected to rise another 35% in 2009.

Do you know what your family would do if you lost your job—or worse, your home? This is a tough question but it needs to be addressed.

Jobs are being lost at a staggering rate. 10,000 homes daily are being foreclosed on. With no where to go families turn to shelters and tent cities are springing up all over.

Suze Orman has a 5 step plan to help people take control of their financial futures. She calls it “your own personal financial stimulus plan” Reminds me of the quote: “It it’s going to be; it’s up to me”

It's time to take this recession seriously and be as fiscally responsible as possible.

Suzie Orman divided the audience in 1/2; on one side were the 2 income families and on the other side single income earners.

Her advice to these two groups?

Live on half of their income.

Practice living on what you would have to live on if you or your spouse lost their job. Unemployment will only pay half of your salary.

This was not new advice to me. Back in the 70s I worked with a man who's wife stayed home with the kids and he banked every other pay check! I remember the gal that I worked with at the time and I were both shocked that anyone could do that. Looking back now, if I had taken that advice my life would look very different now.

Suzie Orman recommended that the audience do this for 6 months. Most of the audience looked like they might be willing to try it for a month but were shocked at the idea of 6 months.

Recession reality is that if you do lose your job you will be out of work for 8 to 12 months. Best to prepare in advance and build up an emergency fund.

I lost my job in 1999 and I can tell you it is a major shock not only to your finances but to your psyche. The tendency is to keep living the same lifestyle because you truly don't believe you will be out of work for long. The reality today is that you will be out of work for several months. I never did get another j.o.b. I became self-employed which was only a partial solution. Learning to have an online business was a much better choice.

The get out of debt queen is changing her advice. Suzie Orman has always advised people to pay off their debt first.

Now she says that when the economy changes good financial advice must change with the economy.

So Suzie Ormans new recession advice is advice that we never thought we would hear:

Pay the minimum on your credit card and stash your cash.

Orman informs us that in times of recession credit card companies are afraid people aren't going to pay their bills. Credit card debit is unsecured debt which means they can't take your car or your house. Companies close accounts with zero balances. They reduce credit limits on those paying only small amounts and increase interest rates.

So if you don't have credit cards and you lose your job; what can you do?

Suze also cautions that you don't rack up any more credit card debt! The ideas is to pay the minimum and stash the cash until you have at least an 8 month cushion in your emergency fund.

The economic stimulus package was not only designed to create jobs. It was also designed to help those out of work.

Many laid off employees qualify for COBRA health coverage. Your company has to cover you for 18 months with health insurance. This coverage is available to anyone laid off between Sept 1st 2008 until the end of 2009. Even if you said no to your employers offer previously you now have 60 days to enroll. Instead of paying 100% of your benefits you need only pay 35%. So if you are currently paying $470/mo your new amount is $164.50 which is a savings of almost $3000 per year. Learn more at the Department of Labor's website.

Helping the housing market is another aim of the economic stimulus package. For homes purchased in 2009 you can qualify for an $8000 tax credit which means if you owe $10,000 in taxes you would only pay $2000. Another qualifier is that your income must be $75,000 or less per year.

The Homeowner Affordability and Stability Plan is designed to help almost 9 million families stay in their home. There is a Home Affordable Modification program for those close to foreclosure. The government estimates that 3-4 million could keep their homes by reducing their monthly mortgage payments.

According to Suze there are two qualifiers:

Go to MakingHomeAffordable.gov to answer a series of questions to assess eligiblity and then go to your bank to see if they will give you a modification.

This for those who aren't in danger of losing their homes but want to lower their mortgage payments. This is only for those who's mortgage is backed by Fannie Mae or Freddie Mac.

If we're honest with ourselves I don't think we need Suzie Orman to tell us that it is going to get worse before it gets better. Suzie predicts that it could be 2015 before this recession really turns around.

Her advice is to be grateful for what you do have whether its a savings account or helpful family members. "If you continuously look in the rearview mirror while you're going forward, you're going to get in an accident. And the victim of that accident is going to be you," she says.

Suze says, "When you are grateful--when you can see what you have--you unlock blessings to flow in your life." This is the law of attraction at work here.

To put this recession in perspective I have posted an article on my blog: Recession Fear Fueled by Suze Orman? The Bull (& The Bear) Of It All Check out a diagram which shows the bull and bear markets over the past 60 years. Note how often they occur and how long they each last!

In conclusion, Suzie Orman offers 5 tips to plan your own personal stimulus package for this recession. Learn to live on half your income whether single or married.Instead of paying off your credit cared debt; stash your cash. COBRA health insurance has to cover you for 18 months.Take steps to lower your mortgage payments. First time home purchasers can reduce their taxes substantially. Finally have a grateful heart and move forward with courage.

If expanding your income circle is what is really necessary check out:

Winning The Recession Job War! Powerful Job Hunting Help. Ten Chapters Of Ideas To Make Your Search Successful. Just Released (March 2009), By Top Job Coach, Charles Moldenhauer. Resume, Attitude, Cover Letters, Age Bias, And Much More.

Recession Job Search Strategies: 7 Steps To Getting Hired. Not Just Another Job Book! Truly Original Career Advice That Works in the Global Crisis. This Book Is So Topical And Hot Right Now! Global Market For This Book With 190 Million Unemployed Worldwide!

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