Personal-Finance Guru Suze Orman

Personal-finance guru Suze Orman knows what it's like to live paycheck to paycheck. In an earlier life — before her No. 1 best sellers and Emmy Awards — she was a waitress at a Berkeley, Calif., bakery. Perhaps that's why Suze O, as she's sometimes called, is so impassioned on the subject of women's taking charge of their finances. Her million-copy best seller Women & Money: Owning the Power to Control Your Destiny (Spiegel & Grau) is now available in paperback. TIME senior reporter Andrea Sachs got through a whole interview with Orman without confessing to the author what her checkbook looks like. (See the five big questions about retirement.)

Do you think women have been particularly hard hit by the recession?
Stats now say that women make up 50% of the workforce — that in many cases, women are the primary breadwinners of the family. This isn't because women are working more. I think that corporations decided to lay off the men, whom they were paying more — men who consistently ask for raises, men who are more aggressive in business negotiating because God forbid a woman should be equally as great a worker as a man. Women make up 50% of the workforce, in my opinion, because they do not ask for what they're worth, and the corporate world knows it. (See the best business books of 2009.)

If a woman finds herself newly unemployed, what should she do?
If she's been following what I've been saying, hopefully she has at least an eight-month emergency fund. If she loses her job, she should immediately reduce her expenses to the necessities. The problem that many people create for themselves is that they continue to live the same lifestyle while they no longer have an income, and they go through that emergency fund, and they still haven't gotten themselves a job. If you cut back spending immediately to bare-minimum survival level, that eight-month emergency fund could turn into a 16-month emergency fund, and then you will definitely get through this somehow.

What should women who have lost their health insurance do?
You have to understand how COBRA works and if it makes sense for you to continue on COBRA or to find your own individual health-insurance policy. Your eight-month emergency fund should be absolutely made up on the probability of you having to pay for your own health insurance.

Many people are looking at 401(k)s that have plummeted. Are they helpless in that situation?
Actually, the truth of the matter is this: if you had a 401(k) and you were contributing to that 401(k) and you did not stop contributing, you may be even today or down about 10%. Over time you should be just fine. You cannot look at your 401(k) in a vacuum. I was working out with my trainer — she's 27 — and she said, "I did what you told me to do last week. I finally invested in the stock market, and now I can't wait for it to go up." I said, "No, you want it to go down, down, down." That way, every month you put your money in, you buy more shares, and in 40 years when you need this money, the more money you will have. You don't want the money to go up now. Those who were hurt are people who lost 50% on their 401(k)s and needed to take their money out to live on because they lost their job or were retiring or whatever.

Let's say my brother-in-law lost his job and wants to borrow money from my husband and me, and we're afraid he'll never pay it back. What do we say?
You say no. You say no out of love vs. yes out of fear. Men do not have a problem saying "No, you're not going to pay me back. I'm not giving you money." Women, on the other hand, are afraid of what other people will think of them. If you don't want to do it because you can't afford to or he exhibits such behavior that it just won't work, you say no.

What if we are having trouble paying for our daughter's Ivy League university. Should we ask her to transfer to a cheaper school?
She has got to make a decision [whether] she is going to stay at that school and take on all the loans in her own name and be responsible for them herself. Before she does that, you owe it to her to sit down with her and explain to her that these loans, if she takes them out, will cost her most likely $1,000 to $2,000 a month in repayments, which you are not going to be able to help her with. Could she afford the student-loan payment along with her apartment, her utilities, her car payment and whatever else she may want? She may look at you and say, "You know what, Mom, let's go to a community college, because I can't afford this, and I do not want to graduate with this kind of pressure on me."

Do you have any hope the recession may end soon?
They're all saying that the recession is already over. They're all saying the economy is doing great. I'm saying, I don't care. I'm still looking at people who are seriously underwater in their homes. I'm looking at people who are still not able to get a job. I'm looking at credit-card companies that are consistently increasing their interest rates. I'm looking at older people who are trying to live off their fixed income, and they don't know what the hell they're going to do. I'm looking at an economy that is on financial steroids because of the amount of money that we pumped into it and that nobody knows how we are going to pay back. And they're talking about the recession being over? I'm like, "O.K. Whatever you think."

See "Suze Orman: Queen of the Crisis."

See pictures of teen unemployment.