Suze Orman - Can I Afford It?

[disneysteve]

Have you ever seen this part of her show? There is a special 1-hour edition of it on right now. It is amazing how many people call in who are thinking about some big purchase when they basically have no money. What the heck are these people thinking? No wonder we have a negative national savings rate. One woman was thinking about buying an Italian ice cart to start a business. Problem is she is currently unemployed, collecting unemployment and has several thousand in credit card debt and a personal loan. Another caller wanted to build a $25,000 addition on their home but they owe $42,000 on a car loan with an income of about $94,000. Another guy wanted to buy an XBox 360 for about $460 including a game, but owed $5,000 on his CCs. Gee, I wonder why he is in CC debt.

To be fair, several callers wanted to make luxury purchases but have all of their financial ducks lined up and Suze told them to go ahead and enjoy themselves, so not everyone is clueless, nor is she against splurges that one can afford.

[greedy4chips]

I personally cannot handle most of the advice she gives. I have however watched that part of her show for the laughs and ridiculous purchase questions some people have.

[Broken Arrow]

My ex and I were like that. We didn't barely make 50k combined when we bought our house for 170k or so. Our credit history were not that good, so our fixed rate wasn't stellar either. Oh, and just when we purchased it, we were already both talking about leaving the jobs that we were at... and did just that within a few short years after.

For the people who knew of our financial situation, you can just hear them whisper to each other just what in the world we were thinking.

The truth? I'm not so sure either. To be frank, I do not believe I was even thinking at all. I wasn't all that interested in money at the time, and generally went along with whatever my ex wanted to do at the time. My ex, well, she's been in debt all her life, and was convinced that we can make it work, no matter what.

There were plenty of seemingly perfectly sounding reasons as to why we should have bought that house. The housing market was in a slump, and it was a buyer's market (which was very true). The house we saw was in a high value neighborhood, and to get it for a mere 170k was a bargain (which was also very true). Finally, she was pregnant with our 3rd child at the time, so we would need the space to grow anyway....

Of course, all that turned out to be nothing more than rationalizations to the house of lies and denial upon which we've built for ourselves.

As we struggled on, it did dawn on me that we've made a terrible mistake. Somehow though, it still seemed better than the rundown apartment upon which we came from. Still, I knew that we faced a real danger of foreclosure... and I became scared.

I was ready to make whatever sacrifices it took, stripping to the bare minimums while accelerating my schooling to finish my degree while continuing my full time job to make ends meet. Better yet, I brought up the suggestion to sell it and move into more affordable housing. My ex was... not too happy about such prospects. Eventually, that friction would turn into a nuclear meltdown.

We still ended up selling that house of course. She wanted all of it, but with the help of the best legal team in town, I got her to agree to splitting the proceeds evenly. I think I only got about 12k out of it. Half of which went into returning the money I used to pay for the lawyers. The other half, I divvied up between my student loans and my emergency fund.

Now that it's all behind me, I must say that I am glad to have rid of that house. Besides the bad memories, it was a bad financial move for us. But, yeah, I can't say that I know what we were thinking either... but I guarantee you I'll personally never make that mistake again.

[disneysteve]

So BA, do you think that if back when you were in that situation, one of you would have called in to Suze's show and been told you couldn't afford the house, it would have made any difference in your decision?

I'd love to know how many of the people Suze denies go out and make the purchase anyway.

[MonkeyMama]

I like her segment but I did not enjoy watching a whole hour of it last night - LOL. Too much.

Yes, you wonder what these people are thinking. What is funny sometimes is people call in for like a $400 purchase and they have $100k in savings and a mil in retirement - LOL. Rarer, but kind of funny. You are like, duh, of course you can afford it - but the other end of the spectrum...

[disneysteve]

I like her segment but I did not enjoy watching a whole hour of it last night - LOL. Too much.

I didn't watch it for an hour either. Just caught it while flipping channels. I watched a bit of it with my daughter. I thought it was very educational.

[MonkeyMama]

Yeah - she did an hour special last night and it was really bugging me for some reason. Usually it is like a 10-minute segment and I do enjoy it.

[Ima saver]

I am always telling my girlfriend that I can't afford it, and she is like, sure you can, you have hundreds of thousands in the bank.
I guess I should say, I chose not to afford it.

[Aleta]

I like the segment where the little seven year old girl called in and said that she wanted to buy I think she said 2 gold fish and accesories and it was upwards past $100. Suze took her throught the usual questions about her finances and the little girl was able to tell her exactly how much she had in the bank and that she had $12,000.00 for college saved up. I know that she was probably coached, but she was so cute. Suze told her she could buy the goldfish if she really wanted them.

I think that she is trying to do a lot of different things to keep her show current. She really does serve a large population of people out there.

[scfr]

I saw the segment once and enjoyed it. I think she said no 4 times and yes once.

I imagine there might be situations where spouses disagree on a purchase, and they agree to let Suze decide!

[Ariadne]

BA, I'm sorry to hear that you had to live through that experience.

I've watched Suze's show before, not so often anymore. I even read her first book when I was in my late teens.

I understand and I don't understand the purchasing habits and logic of people's wants. There are many people in my new neighbourhood that buy things, and you can see them swimming in financial difficulties, but that doesn't stop them.

It's not as simple as keeping up with the Jones', but it's also keeping up with their own expectations of what they 'deserve'. As mentioned before, some people would rather have Suze make up their minds for them. Give the responsibility of decision-making to the "expert", and don't worry about having to think through your own decisions.

[Aleta]

I personally think that most of those people know the answer before they ever ask her, but she becomes their definitive word. Each author that you read can teach you something new that you didn't think about. I think that Suze has opened up people's thinking about what causes them to do the things they do and purchase items they know they can't afford.

[simpleyme]

my advice for the little girl who wanted fish would have been to go to a yardsale and get the whole set up for or a bowl for a few dollars and buy cheap fish ,I once bought my som little fish they cost ten cents each LOL

why teach kids early to spend more than they need to on things?fish are just fish to a child ,any fish would do

[cschin4]

I think it is a good question. When I first started working and was young I really had no idea how much I could "afford" to spend on my first apartment, how much I should spend on a car, etc. I knew very little about credit as well. It is easy to see how people can get into big trouble in a short time. The cc companies bank on it!

[Hot dog]

What network does Suze O come on? I don't have cable am I out of luck?