>> coming up on "the suze orman show"... how ycan avoid the holiday money trap. also... >> if i continue to spend this way, i'd be putting a burden on our family. >> so, you want me to help you stop lying to your -- [laughs] that's the word, isn't it? and you ask me, "can i afford it?" >> what i want to buy is, i want to spend $2,700 for a tank solo cartier watch. i feel like at this point in my career, it's something that i deserve. >> really?! hi, everybody. i'm suze orman, and you are watching "the suze orman show".

tonight, i want to talk to all of you about what i'm calling "the holiday money trap". now, i understand that it's just november 2nd, and we're still a month, almost two months away from all the holidays kicking in. but i'm really, really concerned, and let me tell you why. you know, over all the years that i've been doing this, we do so well starting in january. and we start saving money, we start getting out of credit-card debt, we're funding our retirement accounts. we're doing wonderful. and then every single year -- it's like clockwork -- starting in november, all of you fall into this trap that says, "i got to buy this gift. i have to get this for somebody. i can't just show up at this, you know, party and not have something for everybody." so, i want us to have an action plan so that we don't totally undo all the good that we have

done up until this point. now, here's what's really important to first understand -- most of the gifts that you give people, they do not want. i mean that. somebody always -- people tend to give me candles. people, i don't want any more candles. i have enough candles. so, why don't we start being smart. first of all, you need to plan how much money can you afford to give in total. then you need to make a list. how many people does this amount of money need to cover? you will divide that amount by the number of people you're gonna give gifts to. let's say it comes out to $25. so, you can spend $25 on each person you want to give a gift to. what i want you to do after that is i want you to go to that person, and i want you to

ask them to write down 5 things that they really, really want that are $25 or less. now, they'll have things that they really want. that is their wish list. and if you really want to be santa, then fulfill one of those items on that wish list, and give it to them. so, now, you're giving them a gift that they want, you're spending an amount of money that you can afford to spend, and that we haven't gotten trapped into spending money that we don't have. so, if we just did that with everything that we do this holiday seasoi'm hear to tell you, this could be a season that you really enjoy giving versus going, "why did i do that to myself?" we are going to laura in arizona. go for it! >> hi, suze. my husband received an

inheritance of about $80,000. and it's been over a year and a half, so that's money we have to play with now. there's no taxes or anything that we're gonna have to pay on it. we need some direction on how to best invest it without paying a fortune of fees. we have talked to a financial advisor, and he recommended that we put it in an annuity... >> i knew it. i always go -- before you said that, i was gonna say, "wait! wait, let me tell you. i can tell you what the financial advisor said -- either an annuity, a variable annuity, a variable life-insurance policy. i knew it. i knew it. did that advisor also say to you that, "if you put that $80,000 in there, i'm gonna make about $4,000 of commissions". did he or she happen to tell you that as well? >> he did not tell us that, but everything i've read online about annuities tells me that, and so i'm really hesitant to do that because it's annuity that guarantees 5% return, but the fees are 2%. >> for how long? yeah, 5% return. >> there's a 7-year term. >> 7-year term.

and i'm sure that that 5% return that it guarantees is only for the first year. >> oh, okay. >> and that every year thereafter, i'm sure it makes up for it 'cause nobody can guarantee you 5% right now as this phone call is taking place, when interest rates are so low. >> okay. >> i mean, where are you going to get 5% today on your money? people out there would loto do it. here's the first thing, and i'll try to make this quick for you. do you owe any money in credit-card debt? >> we do not. the only debt we have is our mortgage, and we're working on paying that off. >> all right, and how old are you right now? >> my husband and i are both 33. >> 33. and do you have children? >> we have two children. >> and do you have a 529 plan started for them? >> yes. >> you do. so, this really is extra money. because what i would tell you is that depending on what your mortgage -- what is your mortgage interest rate at? >> 3.75%. >> 3.75%.

and is it a 15-year mortgage? >> it's a 30-year mortgage. >> 30-year mortgage. and do you plan to stay in that house forever? >> we -- yes. >> yes. so, you might, if you don't quite know what to do with this money, you might want to put a majority of it towards the mortgage so you own it outright sooner than later. but again, if i were you and i was going to educate myself, i would absolutely look into exchange-traded funds, high-yielding, dividend-paying stocks, and no-load mutual funds. my favorite investment of all are high-yielding, dividend-paying stocks. i want to be paid at least 5% or 6% while i'm holding an investment. and if i need more diversification, then i do that with an exchange-traded fund. so, if you just start reading, you start listening, i'm telling you, you can learn what to do on your own. let's go to illinois. michelle, ask me your question. >> thank you for taking my call,

suze. my husband and i are really unhappy with where we live. in about 2008, we purchased a townhome in a neighborhood where we thought was an up-and-coming development. however, the builder pulled out and now we basically have vacant lots. we are under water by more than $90,000, and we were denied a short sale. we both do have good credit and about $30,000 to put down on a new house. how do we get out of this situation that we are currently in to move on? >> yeah, what's very sad is that the banks still -- and i don't care what anybody tells me, that the banks are more lenient, we have 2.0, and blah, blah, blah, blah -- that it still seems that many of the lenders, not all, but many of them, still aren't willing to work with people like you. and because they're not willing to work with people like you, it's almost forcing you into a situation where you have to stop paying your mortgage payment, you have to get in trouble, and

then finally the bank will say, "okay, now you can do a short sale." so, i have to say this -- here's what i would probably do. ready for this one? >> i'm ready. >> all right. if you were going to move 'cause you want to move into a better neighborhood, this didn't happen the way that it should have, i would probably purchase my new home and lock in these low interest rates here, and then i would probably stop making payments on the home that i did have -- your home that you're currently in -- and force the bank into a situation to allow you to do a short sale. that way, once you have done that, it will not ruin your credit for the house that you want to buy, because you already have purchased it. am i making sense to you? >> you are. >> all right. that's how i would do it. otherwise -- and people are probably out there, "suze, are you telling her she shouldn't make her payments, that duh-duh-duh..."

yeah, that's exactly what i'm doing if the bank refuses to let you out of a situation that you did not get yourself into. the economy got you into that situation. the developer that was developing that area got you into that situation. the bank should be willing to help you. and if they're not willing to help you, you have got to help yourself. let's go to new jersey. stacie, ask me your question. >> hi, suze. how are you? >> i'm pretty fabulous tonight, and, actually, i think i'm really fabulous. i don't know why, but i am. but anyway, what can i do for you? >> my husband and i have been separated for about a year and a half -- almost two years -- and i really, really, really want to file for divorce. >> yes. >> my problem is that when we were happy and together, he got a car in my name because his credit was awful and mine was really, really good. >> yes. >> he owes $30,000 on it, and he's continuously late. he's about 16 months

continuously late -- i mean, not past 30 days, but still late. and it's affecting my credit now, and i want it out of my name. i was thinking about a voluntary repo, but i didn't know how that would affect my credit, and i don't know of any other options. >> so, just let me be clear on what you said. is the title to the car in your name or his name? >> everything's in my name. >> the title to the car is in your name, the loan to the car is in your name. so, you own that car. by any chance -- >> and it's a car i've never driven... >> all right, but is that a car that you would like to own? is that a car that you would like to drive? >> no. it's about a $550 payment a month, which i cannot carry. >> all right, so, but you could, literally, because it's legally yours, you could take that car back, and you could sell it. and then whatever you owe, or whatever -- straighten it up

that way. 'cause otherwise, since it's all in your name, if, in fact, he has been late with payments, it's already, as you said, affected your credit score, and if the company repossesses it, it's realgoing to affect your credit score, because what will happen is, they will then sell it at auction, they'll get a small amount of money for it, and you still will legally owe the difference between what they got at auction and what you owe on that car. so, ywould be better off taking the car that you own, selling it yourself, and then paying off whatever is left on the loan. that may mean you have to come up with more money to do so, but that way the loan is over, you're over with him, and then you will be able to drive into the sunset without him in the back seat. so, what happened that, all of a sudden, you looked at this situation and going, "what am i doing sneaking around my

husband, buying things that he doesn't know?" >> just the constant betrayal was wrong. >> and later... been wanting something? ask me, "can i afford it?" louise, what do you want to buy? >> hi, suze. my husband and i want to run in the 2014 new york city marathon. as far as debt, we have three mortgages, we also have a $16,000 balance on a car loan, and we have $25,000 in credit-card debt.

>> welcome back, everybody. now, listen. do you need to spend less and save more? then you'll relate to my one-on-one guest tonight. nikki is coming to us from chicago. she's 33 and a hospital pharmacist. she's been married to ray for seven years. and they have a 3-year-old daughter and another due in about five months. nikki says her spending habits are out of control, and she's afraid it will ruin her marriage. so, she wants to stop shopping and start saving. nikki, listen. i hear that your husband never sees what you're buying. he just sees what's on the credit cards. walk me through how that works -- that he doesn't know what you are buying. >> okay. i often would shop at the mall on the way home. and i'll have the bags -- they'll be in the trunk -- and i generally will bring the bags in when he's asleep, or if he's

upstairs in the office and distracted, then i'll bring the bags in. and i do this to avoid conflict. >> uh-huh. and you do it to avoid the fact that you're buying something that you really can't afford and you don't want him to know about it. so, what happened that, all of a sudden, you looked at this situation and going, "what am i doing sneaking around my husband, buying things that he doesn't know?" what changed you to want to come on "the suze orman show"? >> well, my husband -- he's very loving and caring -- and i just felt that just the constant betrayal was wrong, and that we have a second baby on the way. and i just wanted to make sure that our financial future was where we both wanted it. and so, you want me to literally help you stop lying to your -- [laughs] that's the word, isn't it? >> it is. >> ...stop lying to yourself, mainly to your husband. >> exactly. >> do you feel that if this

behavior were to continue, that it is possible it could end up splitting the two of you up? >> it's possible. i mean, the biggest two things that i think of that ruin marriages are definitely financial and infidelity. and financial is something that, i mean, if i continue to spend this way, i'd be putting a burden on our family. >> you know, what's interesting, nikki, and you just kind of said it -- everybody always talks about infidelity -- when somebody cheats emotionally on somebody or they sleep with somebody or whatever it may be. but, to me, one of the biggest betrayals that there is in a marriage is, as well, is financial infidelity, where you don't share the truth about money and you lie about money and you cheat about money by hiding it. and the ramifications of that are equally as devastating as when you personally cheat on somebody. >> i agree. >> so, i love that you're here.

you know, we talked a little bit before you came on air tonight, and i did tell you what's so wonderful about your particular situation is that the hardest thing you're going to have to do is simply stand in your truth. >> right. >> you do have a about $7,800 a month of income coming in between you and your husband. you have expenses of about $7,600. so you just about are spending what you make. you have a little bit in excess, but very little. the real danger is, you have $7,100 of credit-card debt. approximately, and you have only $15,500 in an emergency fund. now, you have all other kinds of debt, but it's the credit-card debt, which is what we really need to deal with to get you back on the road. >> yes. >> so, i will be giving you an action plan, but this is not --

believe it or not -- a financial problem. something has happened in your life that you, all of a sudden, decided about a year ago -- 'cause this is not behavior that you grew up with. >> no. >> this is new behavior that started one year ago. >> right. >> so, we first have to uncover what happened that made you go haywire and cheat on your husband, financially speaking. so, what happened? >> i believe just moving to the area and being in a big city. i had lived in small town for, like, the last 10 years. so, being in the big city, i just want to be the part. i want to be in the big city -- enjoy being here, experience shopping and great shopping areas that i was unable to do so prior to being here. >> you know, when i see people moving, let's say, to a new situation, and it goes from a little town to a big city, when i see somebody displaying the behavior that you're displaying,

you're doing it -- and you almost touched on it there -- because you want to look the part. you don't want somebody to look at you and go, "that's a little-town girl." you want somebody to look at you and go, "that's a hot-shot, big-city woman." >> right. >> right? >> yeah. >> so, you wanted your friends, your neighbors -- all these new people around you who didn't know you -- you wanted to impress them with what you look like versus who you are. >> that's true. >> would you say that is true? >> i would say a lot of it is true. most of it is just wanting to impress myself. like, my family and friends, they know who i am, but i just wanted to look as if i lived in the big city. >> yeah, and you want to know what's so funny about most of the people that look like they live in a big city? they have credit-card debt. they don't have an emergency fund. they don't have anything like you. so, you have arrived, and you now look like everybody else who doesn't have a pot to pee in. so, let's start to do this correctly and stop caring about

anybody else. here, my dear nikki, is your action plan... >> okay. >> ...for the next 21 days -- 'cause dr. oz says to break a habit, you have to not do something for at least 21 days. for the next 21 days, you are not to spend one penny shopping. you are to then, immediately after this, you have $15,500 in your emergency fund. i want you to take $7,100 out of that emergency fund, and i want you to immediately pay off your credit-card debt. >> okay. >> you are currently paying about 16% interest on that -- 600-some-odd dollars a month. i want that to go away. i thenwant you to cut up every single credit card that you have. >> okay. >> i would like you then to get a debit card from your bank or wherever you're, you know, doing

your financial transactions -- credit union, wherever it may be -- and i want you to make sure that it has a text and/or e-mail -- every time you make a purchase, i want a text to come out to you and an e-mail to go to your husband. but i want you both to be notified immediately every time that card is used... >> okay. >> ...so that you no longer can cheat. >> next, we need to start saving money. you have kids on the way, you don't have enough money in savings, so i need you to cut a little bit in expenses. there's no reason, when you're cutting it this close, that you're spending $65 a month on a health club. you can easily walk around the city. you can walk around the lakes. next, i want you to cut $500 a month from your clothes. when you are able to buy things again, you are not to be spending the kind of money that you're spending on clothes.

$500 a month comes out. >> okay. >> also, you guys eat out a lot. so, you're gonna cut eating out by $400 a month. that comes to $965 -- right about there per month. you add that to the $650 a month that we're gonna save that you've been paying on your credit card -- 'cause now you've paid that off in full -- you're gonna be able to save $1,615 per month. now your expenses are only gonna be about $6,000 a month. you're still bringing in $7,800. so, of all of this money, i want yto take $458 a month and open up a roth ira for yourself. the rest of the money -- about $1,300, $1,400 a month, whatever it is -- i want it to go back into your emergency fund so that in approximately six months, your emergency fund will be back up to the $15,500 that it was at before we started

this. you and your husband should pay all bills together. it should not be just him or you. you have to do it together. and if you just do that simple thing, i'm telling you, financially speaking, your entire life will be turned around. that's what i would do, my dear nikki. up next... you can't afford to miss, "can i afford it?" >> not only are the bathrooms an ugly pink-and-green, but they are also showing a lot of wear-and-tear. >> that is ugly. i'm looking at your sink. that is an ugsink. also... >> i've worked really hard, and i feel like i've finally made it, and i love watches. >> you think you've worked hard now, you just wait till you see what's down the pipe for you.

bathrooms. >> tank solo cartier watch. >> run in the new york city marathon. >> all right. it is that time -- the

"can i afford it?" time. this is where you do call in, you tell me what it is that you want to buy, i ask you a few questions about your money -- it's not really hard, people -- and then i tell you if you can afford it or not. are you ready? let's begin. jennifer, what do you want to buy? >> hi, suze! my husband and i want to remodel both of our bathrooms for $25,000. our home is around 60 years old, and not only are the bathrooms an ugly pink-and-green, but they are also showing a lot of wear-and-tear, like chipped porcelain and rust. suze, would you please approve us? >> that is ugly. i'm looking at your sink. that is an ugsink. right? >> yes. >> but it's like 60 years. now, just out of curiosity, you sthat it's $25,000 to remodel. are you sure you're not gonna go over to $35,000, $45,000, $50,000? are you positive that that's your budget, that you're gonna be able to stick to it? >> well, we're planning to remodel one at a time, so i'm thinking if we remodel the first one and it goes over, then we

might delay or not do the second one. >> good, because i have yet to see a remodel job that came in on budget or on time. but, anyway, jennifer, show me the money. >> well, our take-home is $8,167 combined. our monthly expenses are $4,796. the only debt we have is our mortgage, which is $265,000 at 20-year fixed. and in savings we have $248,000 liquid, $500 in investments, and $233,000 in retirement. >> so, the $25,000, i imagine, is gonna come from the $248,000 that you have liquid, correct? >> yes. >> yes. approved! >> yay! >> sapproved i can't tell you. at 33, you're doing incredible. you know, i would just go for it and do both bathrooms at once. oh, why not? all right, kevin... what do you want to buy? >> hi, suze. well, i want to take a trip to cedar point's amusement park.

my boyfriend and i both love amusement parks, and cedar point's is supposed to be one of the greatest in the u.s. -- the most roller coasters. so it just really seems like a fun place to go. >> so, kevin, i have something i want to tell you, okay? >> uh-oh. >> just between you and me. so, back in the '70s, i had a girlfriend, and we loved roller coasters, so we got in my 1967 volvo station wagon, and we drove throughout the entire united states, and we hit every major roller coaster throughout the entire country! man, it was fun, so i can so relate to this. do you sit in the front seat or in the back seat? >> whatever has the shortest line. >> all right, so, anyway. we always did back seat. anyway, show me the money, boyfriend. >> well, suze, i take home just over $3,800 a month. >> yep. >> my expenses, currently, are $2,497, including $1,100 a month for rent. >> yep. >> i currently have no debt.

i have savings of $23,000 in liquid, $6,000 in investments, and $24,000 in retirement. >> and how are you gonna pay for this? >> i was gonna pay cash. >> you're gonna pay cash? so then that brings our little emergency fund down, so you know what i think about that. you have been approved. now, listen to me, kevin. if you were calling in and you were 36, rather than 26, boy, i would have denied you, but at 26, you're doing great. oh, go have fun with your boyfriend. doug, what do you want to buy? >> i want to take my wife on a surprise vacation this year for christmas, and i'd love to go to costa rica. >> mm. >> it'd cost between about $3,000 to $4,000. >> and how are you gonna surprise her? are you just gonna say -- one day, she's gonna wake up and you're gonna go to the airport with her or you're gonna surprise her by giving her this vacation in, like, a little gift box of something? >> probably a little gift box. >> oh, where is your adventuring

spirit? you should have put her in the car if i approve you, but that's besides the point. just show me the money, then. >> our combined income is $6,033. our monthly expenses are $3,830. our only debt is our mortgage at $111,000 for 30-year fixed. and savings -- we have $77,000, $14,000 investments, and $126,000 in retirement. >> and you're gonna pay for it from your savings, correct? >> that's correct. >> all right. approved! these are no fun. all of you have so much money. i can't even stand it. but take my advice. just tell her, "we're gonna go to a little hotel somewhere, so pack a bathing suit and pack a few things" and take her to the airport and get on the plane. oh, that would be so much better! jill, what do you want to buy? >> hi, suze. i've worked really hard, and i feel like i've finally made it, and i love watches. so, what i want to buy is, i

want to spend $2,700 for a tank solo cartier watch. i feel like at this point in my career, it's something that i deserve to buy myself. >> you're funny. you've worked so hard. how old are you, jill? >> i'm 28. >> you're 28. so that's what's so funny. it's like, "at this point in my career, when i am 28 years of age, i have worked so hard." this is what somebody says when they'68. you're just starting to work, girlfriend. if you think you've worked hard now, you just wait till you see what's down the pipe for you. i'm glad i'm this end of it versus where you are. but, anyway... show me the money. >> my monthly take-home is $3,800. my expenses are $2,355, which includes $1,005 a month for rent. >> yep. >> i have $5,000 left on a student loan. and in savings, i have $11,000 liquid, $7,000 in investments, and $38,000 in retirement. >> all right, so for a 28-year-old, you're doing great. how are you gonna pay for this?

>> i'm planning on using this year's bonus. >> this year's bonus for you? all right. so then you're not gonna take anything that you currently have. so, this one is easy, then. denied! so denied! you should have $17,000, at least, in an emergency fund. rather than buying this watch, you should be putting that towards your $5,000 of a student loan. it's like, "really?" no! you haven't even workclose to hard enough to deserve that watch. anyway, louise, what do you want to buy? >> hi, suze! my husband and i want to run in the 2014 new york city marathon. his application was accepted under the lottery system. however, mine was not. the total cost for the trip is $7,000. $3,000 of that expense is the minimum charity donation for a guaranteed entry into the marathon, which would be for me. and $4,000 is for airfare, hotel, and expenses for both of us. the $3,000 charity amount will probably not be an expense, as i'm trying to raise that money

from friends and family, and i've raised about $750 so far. >> have you run a marathon before? >> a couple. my husband's actually an avid marathon runner. he actually ran a 50-mile run. i'm not even close. i've done about eight marathons myself. >> i can't even run a mile. >> [ laughs ] >> i can't even believe it. >> i'm gonna have a hard time training for this one. it's been a few years since i did my last marathon, so maybe that's the hard part. i'm not sure whether it's raising the money or running the marathon, so we'll see. >> i'm telling you, anybody who runs a marathon, hats off to you. anyway... >> thank you. thank you. >> show me the money. >> let's see if we can afford it. our combined income is $14,644, which includes $7,200 a month in rental income. our expenses are $11,386. again, that includes the monthly expenses on the rental properties. as far as debt, we have three mortgages at $340,000, which is a 15-year fixed, $228,000 on a

30-year fixed, and another $160,000 on a 30-year fixed. we also have a $16,000 balance on a car loan, and we have $25,000 in credit-card debt. and that was some funds we used to do some upgrades and repairs on the rental houses. and, also, a little bit of that was used to start a new, small, hobby-type business. and then, in savings, we have $23,000 in cash, $144,000 in liquid investments, and $683,000 in retirement. >> denied. i want you to seriously listen to me now. you may have what it takes to run a marathon. your husband may have what it takes to run a marathon. should you be spending $7,000 at this point in your life to do so? you should not. why? you are $68,000 short of an emergency fund. you are way underinsured if you look all of your finances.

you have $25,000 of credit-card debt? are you kidding me? your husband can't even afford to be running this marathon, so i have to deny you. want to be part of the "can i afford it?" segment? i hope so. all you have to do is go to my website, suzeorman.com, and you'll find the information that you need to know there to come and play with me right here. and if we choose you to come on... hit it, boyfriend! you're up! so, anyway... you will get a t-shirt. now, you can't buy these. you can't get them anywhere unless you come on the "can i afford it?" segment here. and it will say the answer that i gave you. next, i tackle trending topics in "#asksuze." if you can't pay your credit-card bills off when you get the bill, in my opinion, you are already in credit-card trouble. and later... oh! look who's here!

>> welcome back, everybody. here we are in the control room at cnbc headquarters. so many ways -- just so many -- that you can be part of this show. take a look at your screen. you can join me on facebook, you can send in an e-mail, you can send in a tweet, or, if you want to -- if you put "#asksuze" in front of the tweet, it comes in here. if we choose it, your tweet will be on the air. let's see what's trending right now. we have @lingmlee... i'm glad to know that's what i make it sound like 'cause, in my opinion, thatexactly what it is if you invest correctly, so listen up. a roth ira is simply a retirement account named after

senator roth, who created it, where you are allowed to contribute, with after-tax dollars, into this account. because they're after-tax dollars, you can withdraw any amount that you put in, without taxes or penalties, regardless of how long that money has been in there or your age. that's a big advantage 'cause then you can use a roth ira as an emergency fund. it's the earnings, or the interest that your money earns, that has to stay in there for at least five years and until you're 59.5. if you take it out before then, then you'll pay penalty. so, earnings have to stay in. your contributions, you can take out. but here's what's great about it. at the age of 59.5 or older, you can take 100% of that money out absolutely tax-free. on a traditional ira, where you fund it with pre-tax dollars, when you take it out later on,

you're gonna pay ordinary income tax on it. so many things as to why i love a roth ira. if you qualify for one, you should absolutely do it. i love them! let's see what else is trending. listen, nancy, the reason that you're seeing all these car companies now, or lenders -- banks make it so that you can have a car loan for five years, six years, seven years, even eight years in some circumstance, is so that you think you can afford a more expensive car because the longer the payback period, the lesser you're going to have to make in payments. my idea of a wise financial move

is that you never buy a car that you have to finance for more than three years. is it gonna make a big difference in terms of interest rates? no, but you're spending too much money on a car. so if you can't afford the payments with a three-year loan, in my opinion, you can't afford it at all. now, let's go to webcam. lia in north carolina, ask me your question. >> hi, suze. when my girls turned 18, i got them each a credit card to start building their own credit, and i've had some banks tell me to pay their bill on time and to pay their balance off, and i've had other banks tell me to pay on time, but do not pay their balance off. what's the correct answer? >> so, chances are, the banks that are telling you not to pay their balance off are also the banks that have probably issued you that credit card. and they would like to have the interest that you have to pay on those unpaid balances so that they can have their fees continue to go up and up and up and they can show they're doing

great. it makes absolutely no sense on any level in any circumstance to ever carry a balance if you do not have to. so if you have the money, you should charge it, pay it off at the end of the month. because the truth of the matter is, if you can't pay your credit-card bills off when you get the bill, in my opinion, you are already in credit-card trouble. so teach the girls, they charge, they pay, they never carry a balance. all right, let's go back to the studios. here's what's coming up next. linda asks me, "suze..." >> how are we doing? >> now, i know you gave yourself a "c"-plus, so i hope you're prepared for the grade thi'm about to give you. >> i am.

>> welcome back to "the suze orman show." >> hi, suze! my husband and i are 57 and 55 years old. we've worked hard toward being debt-free and want to make sure that we're on the right track for a comfortable future. our goal is to retire at 62, possibly work part-time, but definitely slow down a bit. we'd like to maintain the lifestyle that we have now and include some travel and time for our other interests. suze, how are we doing? >> hey, little foxy lady linda. how are you tonight? >> hi, suze. i'm excellent. how are you? >> you know what? i'm pretty fabulous. thank you. so, you want to retire, do ya? >> eventually, yes. >> eventually. you betcha you do. you know, i have to tell you. i never thought i would get to the point where i was like, "retirement? really?" and it's like, "yeah, looks better every day as we get up here." so, if you were gonna look at your situation and really evaluate it, given that you want to retire in like, you know,

six, seven years from now 'cause you're gonna retire -- you're husband's a little bit older than you, so he's gonna be able to retire a year of two before you, correct? >> yes. >> all right. if you've looked at that entire situation, what grade would you give yourself as to the question, "can you meet your goals and retire anywhere from five to seven years from now?" >> a "c"-plus. >> a "c"-plus. let's show everybody your finances. so, linda's 55. tom is 57. they have about $567,000 in retirement. they have about $60,000 in an emergency fund. $41,000 in investments. their home is worth $186,000. and i always love when i see this. there is zero mortgage debt. their consumer debt -- they have about $21,000 there. so you now have a net worth, as you're looking at everything, of about $833,178.

but what really tells the story, believe it or not, is what is their income versus their expenses? so let's take a look at this. their monthly income is about $10,815 per month after taxes. they have monthly expenses of about $6,100 a month. currently, they're saving $1,700 a month, and that stileaves them $3,000 a month to do whatever they want with. so the question is, "does suze orman think, linda, that you have what it takes, financially speaking, to retire in seven years for you, five years for tom, when he is 62?" and here is the grade that i would give you. now, i know you gave yourself a "c"-plus. so i hope you're prepared for the grade that i'm about to give you. >> i am. >> yeah. i'm about to give you an "a." >> oh, my god. that's excellent!

>> not an "a"-minus, but a solid, solid "a." after looking at everything, i think your expenses five to seven years from now will still be about $6,000 a month, so we have to make sure that we have at least $6,000 a month of after-tax income to cover those expenses. when tom retires, he's going to get a pension. after taxes, he's gonna have about 2,031 left on his pension. that's what he's gonna get after taxes. you currently are bringing home about $5,000 a month after taxes, so that gives you $7,000 a month while he's retired, you're still working, which is $1,000 more a month than i think you're ever gonna need. now, two years go by, and you retire. your after-tax pension, along with his after-tax pension, will give you about $4,600 a month. if you look at your investments

that you have in retirement, that will give you about $3,488 a month after taxes, for a total of $8,120 per month, or $2,000 more per month than you need, and that doesn't even include the $200,000 that you have in savings and investments outside of retirement. so do you understand why you are doing so incredibly well? 'cause i also didn't include social security that, if you just wait till 67 or 70, will be about $5,500 a month. >> that's excellent. >> so you are doing great. now, here is your way, however, to an "a"-plus. the one thing that you are missing, is you do not have have long-term-care insurance, as far as i can see. so if you don't have long-term-care insurance, you have the money right now for you -- and hopefully the health -- for you and tom to be

able to look into that to get it, and if you do that, man, oh, man, linda, you're gonna have a great life. coming up next... one more thing i want you to know. say "hi" to everybody, lou. we've all missed you.

>> welcome back to "thee to the end of "the suze orman show." but before we go, there's still one more thing i want you to know. for years, we had a stage manager right here on the show by the name of "lou." hi, t-shirt boy. and he would come up here, and he would read e-mails to me, and i would answer them. and he was so, so cute.

and everybody loved lou, and then lou got a big job here at cnbc. he is in charge of some of the technology -- all this fancy stuff that you see going on air at cnbc -- and he was no longer here. but ykept writing in, going, "where's lou? how's lou? we miss lou!" i get it, people -- you miss lou. so i just want to show you, briefly, what happened just a few minutes ago. oh! look who's here! [ laughter ] hi! say "hi" to everybody, lou. we've all missed you. >> oh, i see them every day. what are you talking about? >> no, i'missed you. the people on tv have missed you. >> hi. >> so he's still around. we still love him. and the truth of the matter is, i still wish he read me e-mails. now you know. but, anyway... until next week, there's only one thing that i want you to remember when it comes to your

money, and it is this... people first, then money, then things. now ystay safe. bye-bye. >> coming up on "the suze orman show"... attack of the zombie debt! >> i have an unpaid zombie debt, and i'm getting my wages garnished every week 25%. >> also... there's something about my "1 on one" that seems familiar. look at you. >> girlfriend! >> girlfriend! and you ask me, "can i afford it for halloween?" >> i want to buy universal studios' "halloween horror nights" tickets. i have no debt. >> yeah, that's good. you shouldn't have debt. [ scary music plays ]