If you watch the Suze Orman show, you've probably seen the new segment Can I Afford It, where somebody basically asks, given my financial situation, do you think I can afford this item? I've seen it several times now and I'm starting to see a pattern..
Basically, Suze doesn't think anybody can afford expensive TVs, watches, jewelry, cars, anything that you might classify as a luxury item. She doesn't approve much though - on the last show, she told a single mom she couldn't afford daycare for her twins. Well, what is this lady supposed to do then? Quit her job and not be able to afford anything? I saw two instances of her telling someone not to get a fancy TV - one was a college student for whom this would have essentially been two months of income, and that was reasonable, but the other was a 50 year old lady with over $550k in the bank whose TV was on its last legs. Seriously, if someone with half a million dollars can't afford a $2,000 TV, what hope is there for the rest of us? She did eventually OK the purchase of a TV for this lady, but asked her to spend as little as possible on it.
Overall it seems not to actually matter how much money you have, when it comes to a luxury item - Suze doesn't think you can ever afford it. Another caller I remember wanted to buy a thousand-dollar watch, for of course the wrong reasons (she thought it would help her look good compared to her wealthy bosses) but she could easily afford it. Suze said she wasn't allowed to buy it though - she is really blurring the line between what can these people afford, and whether it's a good idea to spend the money. She also told a woman with over a million that she couldn't afford a $4,000 purse.
Of course, then there are just some people with no clue. One woman called in asking if she could afford a 30 foot sailboat - she had the $30k for the boat in savings, but would have to pay $420 a month for the marina fees. But this lady only brought home $1600 a month! I think she definitely would regret paying a quarter of her money for this boat. And there was another woman who wanted to buy a Quizno's franchise - but didn't have enough in savings to do it, or any idea where the money to pay the employees or keep the lights on would come from. She also said she'd never worked in the food business, so she probably has no idea what kind of costs go into running one. Clearly this woman cannot afford it from a financial perspective, as she doesn't have the money to pay even the startup fees, but she also can't afford to try to run this business even if she got a loan because she'd run through all the money immediately and have no plan. Who knows where she got the idea to buy a Quizno's franchise - wouldn't be surprised if she did some research on the costs and decided on it because the upfront cost was lower or something - but clearly she thought that it would start raking in the bucks immediately and she wouldn't have to front anything.
Wednesday, December 13, 2006
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11 comments:
I usually smile at the fact that Suze denies most of the "requests" the come before her.
However, I think it's an important lesson for most Americans. Most people can't afford as much as they think they can. Hopefully, if one person sees that someone with a half-million dollars in savings can't buy a $2K television, perhaps it will give pause to others who have even less in their savings accounts.
Great post.
Hmmm - even the boat would make sense if the woman was intending to live on it. It would be like paying $420 a month for rent and utilities.
I'm not a big Suze fan myself. I agree more with Dave Ramsey's principles.
http://debtfighters.blogspot.com/
I think Suze is helping people understand the difference between "needs" and "wants". Just because you can afford something, question why you want or need it first. I do a lot of things Suze reccomends and value her opinion. :)
I totally believe in Suze's money management. I give tightwad a whole new meaning!! I never buy anything on impulse and buy my clothes at thrift stores. I own two homes which are both paid for, and have 500,000.00 in certificates of deposit and iras, I also own other properties all paid for. I check prices on everything I purchase, and try to always buy sale items if needed. I would never dream of buying a Coach handbag or designer clothes. My mom and dad are both tightwads, but they have always been able to pay their bills, have a good life and save money for retirement, and may I add they were dirt poor, and still managed to retire with 25 acres of land, which I grew up on. They saved every penny they could squirrel away, and it paid off. My dad is 82 and my mom is 80, and now they are financially well off, and need no financial help from anyone. My dad always told us not to let our standard of living get in the way of our having a life, and I listened. Things and purchases do not bring happiness. Peace of mind and no stress is what I feel when I lay down to sleep at night. I have everything I need and I am very thankful. My husband and I are both retired with about $6000.00 a month in income. We feel blessed. We are both tightwads, and know the value of a dollar. I see people living way above their means and I feel sad for them. People seem to have a need to feed their ego. I don't worry if anyone thinks if I am rich or poor. I am just going to keep on going to the thrift store and bargain shopping and laugh all the way to the bank!!!!!
How could you possibly think that two months of income (1/6th of your yearly income!) is REASONABLE?? Idiots like you are the reason this country is in the financial mess it's in!!!
Riiight.. you'll notice, if you re-read carefully instead of jumping to conclusions, that I said it was reasonable to say he shouldn't buy it. Thanks for playing!
here's what makes me mad: people call up saying they bring home $8,000/month, with $20k in savings, then ask if they can buy a $350 xbox. wtf?! of course you can afford it!!!
honestly, though, who the hell has that kind of money just sitting around?! i swear, half of these people call us just to show off how much money they have.
By reading the comments you can see why Suze Orman has a show. People still do not have a concept of what is alot of money. 8k a month income with 20 k in the bank is not alot of money. You barely have 2x your monthly income saved. Most people spend what they make regardless of their income. How can we expect our government to be responsible with our tax dollars when we ourselves can't control our spending.
There are two reasons the people call into this segment on Suze's show:
1) They have a feeling they can't really afford something, and often times they can't, so it makes sense that Suze denies many callers.
2) People who just want to show off how much money they have or make. Sad, but if you watch the show enough you recognize these calls.
Looking at Suze's website where viewers can request to be on the show, it says "the more unique the item the better" - so crazy items like a Hummer, sail boat, or Quizno's franchise all make sense - that's what the Producers of the show are looking for!
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