Suze Orman: This Is the Smartest Move You Could Make With Your Money This Year
Suze Orman has several suggestions for improving your finances in 2026. But if you don’t have enough money saved for unplanned events, her top takeaway is that building an emergency fund needs to come first.
The personal finance expert recommends keeping at least eight months of living expenses in a savings account. Here’s why and how to get started.
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Emergency Savings Goals: What’s Right for You?
Saving eight months of expenses can sound overwhelming. It’s also more than what some expert sources suggest. For example, Fidelity recommends starting with $1,000 and eventually saving enough to cover three to six months of expenses.
Orman acknowledged that someone with only one or two months of emergency funds saved may not be able to reach her recommended goal anytime soon. If that’s the case, she suggested focusing on saving more when you can rather than taking no action at all.
The right amount for an emergency savings fund can depend on your job, income and family responsibilities. Three months may be enough for someone with a stable job, a paid-off home and another earner in the household. A self-employed worker or someone supporting a family on one income may feel more comfortable with six to eight months saved.
Why You Should Set up an Emergency Fund
Without savings, a car repair or medical bill may cause you to reach for a credit card or take out a loan. Additionally, a larger emergency fund can be helpful after a job loss because regular expenses don’t stop while you look for work.
It can also keep you from withdrawing money from your retirement account, which the IRS warns can result in taxes and penalties depending on the type of withdrawal and your age.
How To Get Started
Start by adding up the expenses you would still have to pay if your income stopped. Focus on necessary expenses, such as housing, food and utilities, rather than everything you normally spend money on.
If your necessary expenses are $4,000 per month, an eight-month goal would be to save $32,000. If that amount seems daunting, a smaller first goal may be more manageable.
For example, start by saving $1,000 and then work toward covering one month of essential expenses. Once you’ve saved that amount, set another savings goal, such as three months’ worth of expenses and so on.
To make things easier, set up automatic transfers from your checking account to your savings account on each payday. Also, to reach your goal faster, deposit any tax refunds, bonuses or other extra income into your savings.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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