Don't Buy Stuff You Can't Afford.

People that can't get this baffle me. My wife is the same way and I have to pound it into her head with a 2x4 most days.

I love it, I'm still laughing. This seems to be a concept that few have learned from their grandparents. The "I want it now, I deserve it now!" mentality is really hurting our economy.

I have a another book title: The best place to go when you are broke; to work.

wait, its snl?! but its funny .....now i'm REALLY confused!

The difference is that our grandparents weren't marketed to incessantly and they were offered credit at every turn of the corner.

Bankruptcy 75 years ago was almost impossible to recover from.

There is an economic benefit to being able to borrow to invest (leverage) but borrowing to buy essentially dispsable appliances and electronics is hurting our economy in the long run.

The rules for consumer debt should be tightened.

Actually, it is terribly good advice.

Because as credit card debt mounts, and your credit card payments increase, you have less money to buy stuff with. So you end up putting more stuff on the card. Which makes you have even less money to buy stuff with. So you put more stuff on the card...

so what if someone can't afford the book? :)

You can always hang out at the bookstore and get it from your local library for free.

you know, i bet i can actually produce this one page book and make money off of it because people will buy it for friends as a gag gift.

The precious irony of this smarmy little skit is that there are very few things that the actors involved cannot afford.

"Those dumb poor people with all their debts. When will they ever learn!? Muffy, pass the remote and the caviar. I want to snort some fish eggs while channel surfing on my brand new 110" Plasma TV."

I'm looking forward to next week's skit, 'Eliminate the ruling class and afford groceries again.'

@ShadeWalker: I was thinking the exact same thing.:)

Also, do any of you have cable channels where they play the same 30-60 second commercial over & over again for an hour? I'm thinking this skit would be perfect advice for those channels.

The funny/sad thing about this is that this concept is that we've gotten to a level of thinking where this is so absurd that it is funny.

@str1cken: The precious irony of this smarmy little skit is that there are very few things that the actors involved cannot afford.

I wouldn't go that far. A lot of them get into the same sort of traps by trying to create an appearance for themselves. Like spending $35,000 on a Vertu cell phone because they don't want to be photographed talking on a RAZR that common people use.

@str1cken: What the actors have or don't have has nothing to do with the truthfulness of the skit. That "victimhood" language doesn't help me. I'm not rich but I still subscribe to the "Don't buy stuff you cannot afford" program. It's free and it works. The problem is not the rich, it's those who live like they're rich when they're not. As for your ruling class jibe, communism died a horrible flaming death, please don't try and resuscitate it.

Most SNL players make 80-120k and live in NYC. These aren't millionaire celebrities. That said, none of that changes the message.

"Don't Buy Thing's You Can't Afford" is something that most of can adhere to. Don't confuse that with rich people telling you not to buy a car unless you can pay cash for it.

Good to see that again. I've had debt all through my 20s and having been debt free for 3 years (except a nice equity filled home) it's the most liberating feeling ever.

My partner and I share a car, are selective about what we spend money on, save, and still travel and have a nice dinner out once a week. You don't have to be a miser to save and be debt free, just selective.

I find it awesome, and incredibly funny.

Which is why I:

1. Do not ever have or plan to have a credit card
2. Use a debit card/check card which acts like a Visa but if the money's not there, i can't spend it
3. Save money, and do not ever touch the savings unless for big spending like taxes, or emergencies.

@crosenblum: I'm with you on step #1, unfortunately I was called out by Blockbuster video and they won't allow me to rent a video using my check card (with the VISA logo). Supposedly they "require" a major credit card. Bogus.

#1 also hurts me on car rentals.

correction: Blockbuster will allow you to rent a video with your check card, just not sign up for a membership.

@crosenblum:

I think you will ultimately need to succumb to #1. You don't necessarily have to use them. I have recently seen my credit score go from 520 to 785 (a LOT of bad stuff dropped off this year). And even with my 785 score, I had a tough time getting a car lease because I only had 1 credit card (from my bank... which I never use). You'll need credit cards to have open lines of credit.

I've never been a person who would be irresponsible, but all of my early credit woes came from being unemployed frequently (IT contractor). Since then, I have become used to never using a credit card, but keeping one around.

(I posted this accidentally under the botulism thingy so if you see it twice, sorry and yes, I am an idiot.)

Yeah, I know! It's kinda like how I had to use my credit card to buy food for my family and stuff because well, housing cost doubled, my income was stagnant and I was one minor emergency away from the pavement. Yep. Now that was funny!

You should see all those fabulous hand-me-downs that I can't afford that decorate my overpriced wreck of a house!

Really, the skit is funny. I am now a little more financially secure but unless you've been there (in debt up to your eyeballs for necessities because food, electricity and gas to go to work are required) it's hard not to feel a little victimized.

And yeah, don't buy stuff if you can afford.

This would be another great skit: "Don't purchase a home using a shuck-and-jive mortgage that can reset and leave you out on the street"

I love people who resolutely refuse to get a credit card - ever - because of some irrational fear that they, oh, I don't even know, use themselves? Just because you're buying on credit doesn't mean you're spending money you don't have, people. Behave yourselves. There's no difference between giving the grocery store cashier a check for $80 today and giving Visa a check for $80 in two weeks. None at all. Oh, wait. One builds your credit score.

I have 4 credit cards, use cash, maybe, once or twice a month and I haven't the faintest idea where my check book is. Shocking as it may seem, I'm never in debt more than month at a time, at which point, I pay my bill in full.

Short version? Credit cards are not evil. Don't distrust them. Distrust you.

"At Eastern Motors, your job's you're credit."

Coming from Sweden, I really cannot relate to this skit, or the comments here. As far as I know, there is no such thing as 'building credit'. To me, that just sounds like some artificial bank thing that keeps you paying interest? I dont know. Here, the banks give out loans to people who are in a position to pay the interest (steady job/income, no bad credit history).

Building credit? Jesus, does the banks have you guys by the balls :P

I need to get this into my head. I'm so impulsive it isn't funny. Usually, though, I can afford what I want...

Perhaps the best way to keep people from getting into debt, is when their young let them buy something that's fairly expensive, about $150. Let them earn about...$10-14 a week doing chores around the house, and refuse to let them buy anything else until they pay you back.
Then they'll learn.

An old trick I use to help prevent impulse buying is to "sleep on" major purchases. If I absolutely fall in love with a handbag or designer sunglasses or some other relatively expensive but totally unecessary item, I tell myself to sleep on it for a few days. A few days later I usually find that I don't want it as bad as I thought.

I knew someone that was on SNL. I'd say he was probably the first person that should have watched this video. Was that way before, during and after.

But there's one thing that hasn't been brought up yet, and that's using a credit card for an investment. All investments carry some risk but if you feel your purchase has the potential to be more valuable than the cost incurred in paying it off, this can be a smart move. Not talking about gucci handbags or a $1500 barbeque, but a piece of equipment that increases productivity, or inventory for a lucrative project. Smart purchases that you may not have the cash to cover otherwise.

Re: the actors and the money they're making...

Steve Martin is a bona-fide success, but how many people leave SNL and are never heard from again?

Anyone seen Chris Parnell lately?

@ John--- um, Chris Parnell is Dr. Spaceman. you need to start watching 30 rock!

agreed sardaukar, 90% comment threads like this completely baffle me, being european. as far as i can make out, they have a system over there that makes being in debt beneficial. or something. whatever it is doesnt seem to work, since these posts crop up regularly.

me, i dont buy stuff i cant afford. i got no shiny shit to show off, but never been in debt either.

Have whatever you want, over time, using a budget.

@something_amazing

I work for the buster, and the first time my manager told someone they couldn't use a debit card to secure their account I asked her why that was. Apparently Blockbuster got sued for overdrawing people's checking accounts on debit cards when they didn't return their movies.

But yeah, some stores are stricter than others. I don't even ask people if its a credit card or not. It asks for a credit card on the app, I'll give them the benefit of the doubt.

@golgiapparatus: oh, sorry I suck at realizing there's a reply button. My bad.

@PBH: HAHAHA! An Eastern Motors reference!!! I am going to have that jingle stuck in my head all day now.

For those of you who are European and don't understand the U.S. credit-scoring system, please don't make silly assumptions that it's categorically different from your system (it's just better, nah nah nah nah nah). Our credit worthiness is assessed by using a myriad of factors, such as length of credit history, types of debt (or "revolving debt" such as credit cards, which you do NOT need to carry a balance on), timeliness of payment, etc. One will have a lower score if one has never had an open line of credit or a loan because they have no (or a limited) history. Therefore, it is beneficial to hold a credit card or three to have a record that you can maturely manage debt.

I have never been in debt, and always pay my credit card balances in full at the end of the period. After 10+ years of doing this, I have a nifty score, and a long history that I can point to when I want a loan.

"Building credit" is shorthand for "building credit history," which one of you even mentioned. I can't believe anyone would be obtuse enough not to figure that out.

well kimsama, our 'obtuse' position is that outside of america, you dont have to jump through those hoops or get forced to own multiple credit cards.

and you say yours is better? i agree with sardaukar even more now; the banks really do have you by the balls. this is up there with the way the telecom industry convinces you youve got to pay to take calls.

@aestheticity: Your obtuse position is in being outside of our system, having no experience with our system, not understanding our system, and still thinking you can comment on it with any accuracy. Haha, actually, wait, that's what we Americans do, so welcome to the fold ^_^.

Anyway, I'd love to know how having a few reward cards that I never pay fees or finance charges on, that reward me with about $150 each per year, and that I use for convenience is the banks "having me by the balls." (Maybe if I weren't a girl that would make more sense, since I currently don't have balls by which to be had).

And yes, our system is better because, hey, if you can make silly snap judgments, so can I (and how obtuse do you have to be not to catch the sarcasm in my post on that point?).

@sardaukar: Pretty much. Maybe not the banks themselves, but the "system" here is pretty bogus.

@lindyman77: But Socialism is alive and well in many countries!

A few months ago I read a story in the paper about a Baltimore woman and her 3 kids who had been evicted from their apartment and put out on the street. The story was meant to be a tear jerker and follwed the family until they eventually got another apartment.

There was a large photo of their old apartment on the night they were going to be ejected by police.
In this one photo I saw: An Xbox-360 ($300.00), what appeared to be a leather Brookstone massage chair ($1500.00), a 35 inch TV ($500.00) and several pairs of very new, very expensive looking sneakers. The woman was wearing a leather jacket and several pieces of gold jewelery (at least one of the kids was also wearing a gold chain).

The new apartment was subsidized by the government (me and you).

I believe that the vast majority of the "poor" people in this country that we all send a chunk of our paychecks to every month are actually just stupid, lazy or both.

@jeffj-nj:
"There's no difference between giving the grocery store cashier a check for $80 today and giving Visa a check for $80 in two weeks. None at all."

There is a big difference. It is this thing called risk. Credit card holders like to negate it as they "pay it off every month", but its still there. There are also many many studies showing that you'll spend more when you use plastic as opposed to cash. But I'm sure that doesn't apply to you... just like the risk thing.

@sardaukar:
"As far as I know, there is no such thing as 'building credit'. To me, that just sounds like some artificial bank thing that keeps you paying interest? I dont know."

No, you've pretty much got it.

@jeffj-nj: You're not spending money you don't have, you're borrowing someone else's and that can be just as bad if not worse.

There are plenty of stories of people getting screwed by credit card companies or of people getting in over their heads with credit. Whether someone don't trust the companies or theirselves doesn't it make sense to not get the card? If you can't trust what you or the company's going to do why get it?

@kimsama:

You have a valid point in that if you pay off your card each month, it's not a bad thing. Unfortunately most people do not for one reason or another. There are plenty of people who don't use their credit for fancy extravagances, but rather for medical bills because they are under insured, or other emergencies. When I was younger I remember maxing out my first credit card because the brake-lines on my car burst on me.

Sometimes a little humility goes a long way, that's something most of us Americans can use. Sometimes the best answers come from those on the outside looking in as they can sometimes see things we can't.

There's a bit of hue and cry going on about how some people get into credit trouble because of emergencies, medical expenses, etc. I still don't think you can blame this on the existence of credit cards! What would you prefer, debtors' prison?

When people need medical attention, they should seek it. Most often, they don't have to pay for it all right there (unless they go to the little commercial doc-in-a-box) but they're definitely going to get a bill, and may have to choose between paying that and buying a few Big Macs or paying the electric bill. It's definitely not a fun position to be in, but IT'S NOT THE FAULT OF CREDIT CARDS. You can put yourself in crappy financial positions without any help from credit cards, and irresponsible use of credit can put you way deep on the hole, but as someone said higher up in the thread, they don't use themselves (and if someone else uses it without your consent, you don't have to pay for that anyway.)

I'm one of those guys who puts all the bills I can on a credit card that gives me a little rebate, so I essentially get a couple % off those bills. Yeah, I pay the bill in full every month, and I watch what I've been spending all month so I don't get rude surprises (these interweb tube thingies are so HANDY for that!) Yes, if in the middle of the month my car's engine explodes I'll be spending way more than I've budgeted, but that would be no different if I were paying cash for things as I go along. The trick is to PAY IT OFF and not spend more than your budget (you all have budgets you follow, right? Sure you do.)

People, credit is a tool, and like any tool it can be mishandled or used in the wrong way. The basic concepts behind credit are also in use by systems that are 'outside' the United States' system, only the particulars and circumstances vary. Our American system has problems, but what economic system does not?
As for those who vilify the poor--it's easy to lump all poor people into a single class, but the fact is poverty covers several conditions and circumstances. There are people who use poverty stats and statistics to abuse the system, and there are people who legitimately need help. There is no one cure for all that ails you...

This was done on a show called "look around you"
Back in 2002 or 2005 (I cannnot remember which series)
The episodes exist on youtube, they are very funny
The concept and words in this version are extremely similar to the words from look around you.

www.daveramsey.com

Debt isn't a tool. It's a product that is being marketed to the middle class and the poor as a way for them to feel like they are rich without having to go through the hard work of saving and investing like most rich people do.

To those who think credit cards are a smart move: smart people question the assumptions of "conventional wisdom". Think about it - do you really think you are putting one over banks and credit card companies when you pay off your card every month. Why would they let you do that if it was a money losing position for them? The answer: most people overspend when they use a credit card because it's a painless way to spend. There's no emotional connection to the plastic as there is to cash. Why do you think businesses are willing to pay a 3% kickback fee on every credit card transaction? Because the amount of money spend on every transaction goes up on average with plastic.
You likely aren't smarter and more crafty than the average consumer - most people aren't, that's why it's the average. You are likely spending more than you realize and whatever "rewards points" you get are probably not making up for that - that's why the banks are willing to give rewards points in the first place. They aren't losing anything - they are multibillion dollar organizations with very sophisticated market research tools and analysts from Ivy League graduate schools. You - the average consumer - are not going to win at that game. Just like Las Vegas isn't built on winners, the credit card industry isn't built on winners either. Most consumers are losers in the deal.

You don't need a credit score if you don't borrow money. If you absolutely need to buy a house with a loan, find a manual underwriter who uses your income to make the decision, not a credit score.

Guys, I go to a Top 20 law school and I'm paying cash for it. I'm debt free, and always will be. I pray that you stop trying to be clever with credit - you're not going to win. Instead, work hard, get 2 or 3 jobs if you have to for a short time to reach financial goals, save your money, and invest it wisely. You'll never regret the feeling of freedom that you will have.

Dear Christianlawyer09, I'm pretty sure you are joking. Or you may have good intentions but you don't understand finance. To those that know how to use them, credit cards are extremely smart. I don't spend any more money then I would have spent with cash, but I get 2% to 5% back. I will be getting $400 cash back on a work purchase this week, I expensed it today. On my purchases I pay no financing charges, and since I was able to keep the money for an extra month, I earned some decent interest at the same time. I enjoy the convenience of rarely going to an ATM to get cash.

There is such a thing as good debt. In business, a company will take a loan to make more profit than they pay in interest. As a consumer, we'll be buying my wife a car this year. I could pay in cash, but the car is actual cheaper if I finance with the manufacturer due to a rebate. I've had car loans before where the interest being charged me was less then I was making keeping that money in a high interest bearing account. I qualified for the great rate by developing my credit history. So you go ahead to that manual underwriter to get a mortgage, I'll be happy with a lower rate than you. And that is what financial freedom is about.

~smart and crafty ChristianSysAdmin

It seems that a lot people here like to say "Credit cards will eventually victimize you." Which really misses the point of the video above. You can just as easily spend yourself into debt with cash. You know, buying things you don't need, or cannot afford instead of paying the rent and/or gas bill. Credit cards are not the problem. Irresponsible and unnecessary spending is the problem.

Man, that shit is hilarious.