Special Report: Suze Says

These days it costs so much to gas up your car and feed your family. Meantime the dollar is very weak, your house or condo is worth less every month it seems and the job picture can be uncertain.

Suze Orman, financial expert
"This is a financial hurricane, in my opinion, that has rolled on shore and you just don't know how long it's going to last."

Suze Orman, famous for her money smarts, says to ride out the storm follow her rules.

Suze Orman, financial expert
"Simply pay for everything in cash. You no longer have the cash? Guess what? You can not buy it."

Lesson one: stop building debt!

Suze Orman, financial expert
"We don't continually upgrade our homes, we don't continually upgrade our cars. We don't continually buy new clothes to impress people we don't even know or like."

And if you plan to make a quick getaway to relieve the financial stress, Suze says forget it.

Suze Orman, financial expert
"Now is not the time to be taking vacations. Go back to a very simple living style."

So what should we be doing right now? Suze says pay the bills, pay down credit cards, pay down down the mortgage or save for retirement.

Feed the family, pay the bills, but no frills.

Suze Orman, financial expert
"I want you to stash the cash."

And that includes the money millions of Americans are getting from the IRS, the so called economic stimulus checks.

Suze Orman, financial expert
"You are not to stimulate the economy with this money."

What if you've fallen behind on your variable rate mortgage?

Suze Orman, financial expert
"I would be refinancing if you can, if you can, and I would fix the interest rate right here and right now cause I think a year or two from now, I think you may see interest rates a lot higher."

And if you're facing foreclosure, and doing everything you can to save your home, Suze says there's one surprising thing you shouldn't do.

Suze Orman, financial expert
"You are not to take money from your 401K as a loan or a withdrawal."

Why? Suze says retirement funds are protected from bankruptcy proceedings. And months down the road, after you spend retirement money to catch up on housing payments, you may find you still fall behind on the mortgage.

Suze Orman, financial expert
"Now you're under water again. You're behind in payments again, now what are you going to do? Now you've lost the home, and you've lost the money in your 401K. Do not do it. Do not do it. Do not do it."

Suze says if you do have money to spend, continue to save and invest in high quality mutual funds.

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