Don’t Buy Stuff You Cannot Afford

For some reason, some continue to not pay off their credit card bills every month.  Can you believe this nonsense? Who willingly buys something they cannot afford, and then pays massive interest on something for months, if not years?  That’s just silly.  Let’s get that 30 pound dumbbell and drop it on your toes.  After your metatarsals are broken, get a really long needle and start ramming them into your eyeballs.  Maybe after a while, you’ll realize how stupid it is to live beyond your means.

We have proposed creating government restrictions on what you can and cannot buy, and how much credit you can get based on your high school and college transcripts.  If you’re stubborn enough not to see the value of doing well in school, then you are likely stubborn enough to buy things you can’t afford.  The government can be a helpful big brother to save consumers from over-consumption.  Listen here, this is only one solution to help protect people from themselves.  You are welcome to offer up another novel solution too.

The classic video below will help teach you how to manage your money better.  It’s only a couple minutes long, yet it is so powerful and straightforward.  Hope you guys enjoy, an have a fantastic weekend!

Readers, seriously, there can’t be people out there who don’t understand the concept of not buying stuff they can’t afford right?  Why don’t people just make more money if they want to buy more stuff??

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

You can sign up to receive his articles via email or by RSS. Sam also sends out a private quarterly newsletter with information on where he's investing his money and more sensitive information.

Subscribe To Private Newsletter

Comments

  1. Patrick says

    If it wasn’t a problem then Congress wouldn’t have passed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act signed by President Obama.

    Unlike you the vast majority of American’s don’t even make $35,000 a year, let alone have that much in savings. So if you make $20,000 a year you may qualify for anywhere from $2-$7,000 in credit card limit. This doesn’t mean they are financially equipped to pay off that debt if they use it, but the credit card companies aren’t ready to have you pay a small amount each money for that privilege.

    I think credit card companies make far more money off people who make less than $50,000 a year than they do from people who make $150,000 a year. You should never underestimate the poor decisions of the material “poor”.

    • Financial Samurai says

      The $35,000 credit limit is an illustration and can’t be arbitrarily compared to someone else’s income. Like you said, if you only make $20,000, you probably will qualify for very little. There is no way someone only making $20,000 will qualify for a $7,000 line btw. And even if they do, they wouldn’t max it out.

      I strongly believe in the intelligence of people. The poor aren’t stupid, they just don’t have as much money as others.

      • Canadian Doomer says

        I can’t watch the video from Canada, but “Don’t buy stuff you can’t afford” seems like obvious – but sadly very necessary – advice.

        The problem, though, is that many people have a skewed idea about what they can “afford” or even what the word means. If there’s room on the plastic, if the bank will approve it, if the money is in the account long enough to spend, then they can “afford” it.

      • igotadose says

        Sorry, Sam. Look into most ‘poor people’ and you’ll find bad decisions about starting
        families, poor educational performance, and in the US, way too many ways to
        stay this way. Just look at the folks that are poor and win the lotto – boom! money gone.

        It’s a liberal myth that by just giving out gobs of $$ to ‘the poor’ (however those are
        defined), they’ll magically become un-poor, stronger contributors to society, yadda yadda.

        Other than those folks that were disabled their way into poverty, most what you see
        are due to the preceding problems.

        Give the poor more money, and they’ll just spend it.

        And, as we’ve discussed on other threads here, a college education is just another
        commercialized product in the US of low quality like so many. Look at all the law school grads
        who are in debt up to their kiesters, and aren’t earning minimum wage. Law grads! Who’ve
        passed the bar! Earning less than min wage!

        Until we gain control of the burgeoning population in the US, the only westernized country
        with a birth rate over 2 per woman, we’ll continue down the path to the 3d worldification
        of the US. Sad, really, but not unexpected esp. when Reagan was elected. Fell off
        the cliff then and we won’t recover.

  2. Aspiring Millionaire says

    Unfortunately there is an insane amount of people I know who do this. My husband and I bought doors last year on an interest free card, as it was better to keep our money earning interest and because we knew we would not spend anymore on the card. I normally loathe the things.

    When we got it we had a $14,000 limit!! We could not believe we had that much ‘spare’ on the card. We rang up and had it reduced of course. I mentioned this to a few friends and 90% responded with “I would have gone on a shopping spree!” And they were serious. They have done it before.

    So sad, yet so true.

  3. MacroCheese says

    I think you’re mistaken – were you not aware of the credit card booths set up at a every major university in the country?

    I assure you, the vast majority of those students given a credit line had no business receiving it.

    The best kind of customer for the big CC companies is exactly the kind of person you’re saying doesn’t exist.

    They love to tether someone to their past purchases.

    “Only $15 a month for the rest of my life! Wow!”

  4. Curt says

    Was wondering what the name of the video was, it is not available to be streamed in Canada, was going to try and look it up on Youtube

    Thanks

  5. Sustainable PF says

    Thanks for including us Sam! We prefer to use our own personal mobile devices – our legs – to get around. To and from work every day by foot or bicycle wheel.

  6. JT McGee says

    There’s too much emphasis on credit when the story is debt. IF I carry a balance, it’s usually funded by a BT offer for minuscule amounts of interest. An offer came in the mail just last week to give me 18 months of use of the bank’s money for a 3% charge.

    That’s 2% per year, uncompounded. Inflation is higher than that. No brainer. On paper, I’ll have more debt, but on the balance I’ll have more (cheap) cash. Spending more than you can afford will make you broke 100% of the time, whereas using credit wisely won’t.

    Thanks for the link, Sam. I really appreciate it.

  7. Jon says

    Unfortunately, we live in a society where we are all “ENTITLED.” Parents treat their kids like best friends and they give them whatever their littles hearts desire. In turn, kids lack the skills needed to enter the workforce and function as an adult. Consequently, they rack up credit card debt they cannot afford while incurring even more debt due to the high interest rates. Parents do not understand that they are raising adults and not children. Need and want are synonymous in this day and age. It will take apparently a larger catastrophe to make people wake up and smell the roses (as if the foreclosures and this recession wasn’t a wake-up call enough).

  8. Jeff @ Sustainable Life Blog says

    I think that people just dont seem to understand where they are headed if they continue to spend. A lot of stories you read in the papers about people going through bankrupcy have a whole crapload of things wrong with them – lost job, health, etc and many people think that if they dont let that stuff happen to them, they are ok. NEWS FLASH – everyone starts somewhere, and most start with the credit cards.
    Jon also has a good point – many people my age (and older) are still bailed out by their parents all the time.

  9. Untemplater says

    That’s a hilarious video! Thanks for the mention Sam :). I learned so much trying a vegan diet for a week. I found some great chocolate “ice cream” sandwiches made with soy milk last week that have been a yummy substitute for dairy ones. I’m doing pretty good at keeping to my post challenge goal of one day a week vegan and 4 days vegetarian. Have a great weekend everybody! -Sydney

  10. krantcents says

    Such a simple message, but it ignored daily by millions of people! There are alternatives for the things you actually need such as shelter and food. There are many programs through the government, religious and other organizations to help people with basic needs.

  11. Roy | cruisesurfingz says

    I think the problem is people are addicted to stuff. So rather than “don’t buy stuff you cannot afford” people need to realize that they don’t need as much stuff as they think they do.

  12. Daniel Rosenhaus says

    When people look around all they see are others with new or nicer things, and in turn, they want to keep up or surpass them. However, what you can’t see is their savings account, credit card debt or state of financial security. Just because someone looks richer than you, doesn’t mean they are. Lots of people need to learn to not try to look more well off, but actually be more well off.

  13. Forest says

    I don’t think credit should be based on how well you did at school, way too many factors as to why you may have not done good.

    Also people living beyond their means, it’s not always stupidity so I think the assumption there is a bit harsh but I do agree people need to learn how better to organise their finances.

    My high school transcript was about as good as they get, definitely top 3 in the school, yet I still managed to pile on huge debt and am only just getting to really dealing with the mess.

    I was stupid for the way my debt piled up but I don’t think everyone is.

  14. Money Reasons says

    Great video, but I have to wonder, what if I want to buy something and someone else has the money to pay for it, but I don’t… should I buy it then? (lol)

Leave a Reply

Your email address will not be published. Required fields are marked *