Suze Orman Warns It's the Little Things That Could Drain Your Savings -- Like These

Are you setting yourself up for financial ruin?

It's hardly a secret that inflation rates have been soaring since the start of the year. In June, the Consumer Price Index, which measures changes in the cost of consumer goods, rose 9.1% on an annual basis, representing the highest increase in roughly 40 years.

As such, it's not a wonder that many consumers are being forced to dip into their savings accounts in order to make ends meet. But financial expert Suze Orman warns that it's important to spend money cautiously at a time like this. Those who aren't careful with what they're spending could wind up in a dire financial situation.

It's time to preserve savings

Many Americans had no choice but to deplete or dip heavily into their savings at the start of the pandemic. At that point, unemployment was rampant and vaccines weren't available, forcing many people to hunker down at home and wait out the crisis. 

These days, many people are learning to coexist with COVID-19 and don't feel compelled to isolate themselves from society. And the labor market is in a very strong place after having recovered really well from the blow it took in early 2020. 

But still, a lot of people are still in financial recovery mode in the wake of the events of 2020. And as such, they can't afford to keep dipping into savings to keep up with their bills.

Plus, while jobs are abundant now, that could change if the U.S. economy takes a negative turn and winds up plunging into a recession. Some experts, including Orman, insist that a recession is a strong possibility given the way the Federal Reserve is aggressively hiking interest rates. And so it's important to preserve savings at a time when things have the potential to change for the worse.

Beware the little things

Some people are spending more money these days -- and tapping their savings accordingly -- due to inflation. But others may be raiding their savings because they haven't made a solid effort to cut back on non-essential spending at a time when living costs are up. And Orman says that's a dangerous approach to take. 

In fact, Orman insists that often, it's small expenses that drain consumers' savings. Those things include:

• Daily coffee purchases
• Takeout and restaurant meals
• Streaming services
• Subscription boxes
• Gym memberships
• Rideshares

This list could go on. And the reality is that many of us spend money on these things on a regular basis. But Orman warns that those who are dipping into savings to cover these costs should really reconsider. 

It's one thing to take money out of savings to pay for gas or medication. But Orman insists that those who can't afford their monthly bills should do their part to cut back on non-essentials rather than keep paying for them. And that's advice worth taking.

Right now is a scary time to go without savings. We don't know if a recession will soon hit and if the cost of essentials like gas and groceries will continue to climb. Plus, the Fed is making borrowing more expensive, so it's a bad time to have to take out a loan or run up a credit card tab.

At this stage of the game, it's really important to have money in the bank to fall back on. And consumers should really be mindful of the little things that could easily eat away at their cash reserves.