SNL Teaches The Secret To Staying Debt Free

With the economy in the pooper, it’s time to repost this classic Saturday Night Live sketch which contains the most important secret to staying out of debt and living happily. Starring Steve Martin, Amy Poehler and Chris Parnell, this gem distills the one essential trick to just one single phrase…

For our readers outside the US, here’s another version of the clip.

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  1. Consumeristing says:

    They should update it with inclusion of a menagerie of “evil” characters stopping this couple from staying debt-free: the Chinese, Obama, Republicans, Democrats, Countrywide, Citibank, Jews, Bildherburger, Greenspan, Geithner, Unions, Greeks/Spanish, Illegals, Legals, Krugman and the Japanese. They all forced these two to take up debt more than they can handle.

  2. Platypi {Redacted} says:

    I don’t understand, if I REALLY want something, can I buy it? Even if I don’t have the money?

    This is good stuff!

  3. tedyc03 says:

    These jerks! Don’t they understand the whole economy is based on spending money you don’t have? How are CEOs supposed to increase their profits quarter over quarter without it? How are we supposed to boost sales tax revenues? How are we supposed to keep tourist destinations in the money for Christ’s sake?!

    Spending more than we have is the American way! It’s how we all got those nice houses, nice cars, and wonderful luxury goods we all came to love! Who can imagine a society in which people spend within their means? I sure can’t.

    This can’t possibly end poorly!

  4. FredKlein says:

    Yeaahhh… Let me know when you have $300,000 + saved in order to buy a house.

    • TalKeaton: Every Puzzle Has an Answer! says:

      If you’re already in enough debt where this video becomes applicable, you probably shouldn’t be buying a house in the first place. It’s a good tactic for getting OUT of debt.

    • Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

      Yeaaahhh one of the FEW exceptions to the rule.

    • tedyc03 says:

      If you can tell me what your number will be in 15 years, I’ll give you a ring.

    • Alvis says:

      If you can’t save $300,000, you don’t deserve a house. That’s what renting is for – there shouldn’t be an expectation that most people can afford home ownership.

      • castlecraver says:

        Careful bro, *I* know you’re not serious, but sometimes sarcasm doesn’t transmit well over teh intarwebs.

      • craptastico says:

        maybe the dumbest thing i’ve read all day. if you can’t save $300k you don’t deserve a house? first of all most houses are below that price, secondly, i’d guess that fewer than 10% of buyers pay cash. in the meantime you’d have them throwing money away on rent

        • Alvis says:

          You say “throwing money away on rent”, I say “living within the constraints of your income”

          • Bativac says:

            That’s fine except my mortgage payment is lower than my rent payment was (including monthly homeowners insurance, property taxes, etc), and I can repaint and otherwise renovate my home to suit my personal tastes.

            Granted I may be in one of the few areas of the country where it is cheaper to buy than rent…

            • Azzizzi says:

              Where I live, it would cost me about double to get a house that’s about 3/4 the size of the place I rent.

            • erinpac says:

              My mortgage is less than 1/3 my previous rent price, for several times the space.

              I don’t think it’s that abnormal – after all, most landlords probably price to pay the mortgage, maintenance, etc… they aren’t usually charities.

          • Eyeheartpie says:

            I have a 2400 sqft house (4/2.5) for the same price I used to drop on renting a 1 bedroom 1 bathroom 900 sqft apartment.

            It’s all about managing your money and living within your means. I did not buy a house until I saved up enough money for the 20% downpayment and 1 years worth of mortgage in case I lost my job. I made sure the monthly mortgage would be less than 2/3rds of 1 paycheck, which I get every 2 weeks, so that I am still saving money every month. That means I can afford to buy my house. Buying a house is different than most other things, simply because of the sheer amount of money required.

          • craptastico says:

            from my experience as an adult, i’ve generally found rent to be only slightly less than my mortgage. after figuring the tax break for my mortgage, my mortgage is costing me about the same as rent would. granted rents are high where i live

            • HogwartsProfessor says:

              My mortgage payment is LESS than rent around here. Of course, I bought my house in 2002, when you could get a house even if you walked in wearing a barrel. If I tried it now, I bet renting WOULD be cheaper.

      • pecan 3.14159265 says:

        I’ve heard this from you before. You’re also the person that thinks people shouldn’t own dogs if they don’t have yards for them to run around in because you don’t like them walking on your property – nevermind that dogs need to be walked, instead of let loose on a patch of fenced-in land. Ridiculous all around.

        • Alvis says:

          That one really stuck with you, huh?

          I don’t find it unreasonable to expect animal owners to have proper accommodations for their pets: you shouldn’t get a lion if you don’t have a cage, shouldn’t get a panda if you don’t have any bamboo, and shouldn’t get a dog if you don’t have room to exercise it.

          • pecan 3.14159265 says:

            But you’re ignoring the entire premise that there are many different ways that dogs can get exercise – unless your idea of walking a dog involves just leaving it outside in the yard for an hour, it’s just plain weird to suggest that you shouldn’t have a dog because you happen to have a sidewalk and a leash or a dog park instead of your own personal yard.

            You keep harping on home ownership and how it isn’t always a good thing – why should I own my own yard, then? Why can’t I take my dog out for a walk in the neighborhood, which isn’t owned by a particular person, or to the public park? Same thing.

            • mandy_Reeves says:

              I have a small dog, and live in a studio apartment. She is tiny and gets exercise just by running like a maniac all over the couch and chasing her toys around. We walk her once a day or so unless it is raining…but she has a loving home…how dare you Alvis, how dare you say that people like myself don’t deserve a dog? She is my life, my daughter, one of my reasons I am not locked up in a loony bin.

          • aloria says:

            You must not have a lot of experience with different kinds of dogs. While certain kinds of dogs will take advantage of a yard to exercise and play, many will just sit at the door until you let them back in. Even though my condo has a courtyard in which my dogs can roam free, one of them wouldn’t get a minute of exercise unless I put him on a leash and run around the block with him.

            Heck, my mom has three acres of back yard to play in, but her pug and shih tzu will just sit at the door and whimper while the dachshunds and golden retriever run and explore.

        • MauriceCallidice says:

          “because you don’t like them walking on your property”

          I can’t tell if you’re trolling or serious. Are you actually objecting to person A not wanting Person B to walk Person B’s dog on Person A’s private property?

      • kalaratri says:

        Rent – $1,700 for a 1 bedroom.
        House – $1,600 for a nice detached house with 4 bedrooms for our growing family.
        Hmmm… you’re right, renting is a better idea!

        • huadpe says:

          Where do you live? Because I live in a high rent area, and I can tell you, a 4 br house by me costs almost $1000/month just in taxes, before the mortgage at all, and $1700 is expensive for a 1br here.

        • aloria says:

          Exactly. When you’re renting, you’re more often than not paying a mortgage, except it’s in your landlord’s name with extra thrown on top for maintenance and profit.

        • NeverLetMeDown says:

          For me, rent for a one-bedroom, $2400/month. Buying that same one-bedroom (identical apartment, 1 floor down), $800k. Monthly cost of buying, including condo fees and after the tax benefit of mortgage interest: ~$4k.

      • aloria says:

        The mortgage on my condo is less than the rents I was paying for smaller, worse quality/neighborhood apartments.

      • runswithscissors says:

        What’s it like being a chronic OP blamer and contrarian? Does it feel like being an iconoclast?

    • YamiNoSenshi says:

      It’s not affording the $300,000 house. It’s affording the mortgage payments.

    • Necoras says:

      Either:

      A) Rent a house for half what your mortgage payment on a $300,000 house would be and then put the same amount you’re paying for rent into a high yield savings account, (or stocks, bonds, or CDs depending on your risk tolerance). The money should grow over 5-10 years to where you can afford your house.

      OR

      B) Buy a house for $150,000 and get a 15 year mortgage. Don’t move. Once the mortgage is paid off, continue making those payments into savings (see above). That money should grow over 5-10 years and you can then buy your fancy house free and clear.

      I know that B works because I have family members who have done it, and I’m on the same track. I’ll have house 1 paid for before I’m 40, and house 2 will be built and I’ll own it and the land it’s on before I’m 50.

      Also, note that I don’t have any car loans, and am quickly paying off student loan debt. That doesn’t always make sense, but considering savings accounts are at 1.5% or less and my student loans are at 4.25%, it certainly does right now.

      • Kate says:

        B only works if you don’t live somewhere where the house prices don’t double every 7 to 10 years. Wait too long, and there’s no way you can get into a house on your pay. We can’t afford to buy our house now on our pay if we had waited to build up money.

        Granted, since the housing market went off a cliff, that’s no longer that much of an issue. Now the problem is you just probably will get laid off if you wait long enough.

      • Bsamm09 says:

        In response to B – Why make those payments into a savings account? Buy another house to rent out with a mtg pmt about the same as the house you live in but paid off. With interest rates what they are now mtg should be less than what you charge for rent.

        Also as long as you hold it out for rent, the mtg int, taxes, insurance, maintenance, depreciation etc is deductible on Schedule E. Which is a lot better than itemized. It should also save a great deal on your taxes every year.

        With the tax savings and real income (cash in – expenses excluding depreciation) from the rental, put into account to save for dream house. When you have enough for a down pmt, buy your dream house and let your rental income pay your mtg.

        • MaxH42 thinks RecordStoreToughGuy got a raw deal says:

          That’s a good plan…as long as you’re never stranded without a renter. To avoid losing your rental property and possibly your residence (which most people use as collateral), you need to have a very healthy cash reserve.

    • misterfweem says:

      Hee heee heeee. Or $96,000. That’s all we paid for our 4 bedroom, 2 bath house. I LOVE living in the sticks.

      • catastrophegirl chooses not to fly says:

        yeah, i was just at a friend’s two towns over talking about prices. she’s a realtor living in a much more expensive area. i have a 3BR 2 BA on half an acre. she was my realtor for the sale and remarked on the low prices in the area. in her area, my house and land would be worth $360k instead of the $126k i paid.

    • Hi_Hello says:

      i dunno… my mom has two houses… paid for … in cash. one she rents out.

      I never understood why some people buy big gaint houses they can’t afford or is barely home.
      my mom’s house has a driveway were you can park 4 cars. 2 garages. and two land where she plants stuff.

      and she makes a lot less money than most people.

    • evnmorlo says:

      Who needs a house when you can get a double-wide?

    • tinmanx says:

      Can’t get one that cheap in NYC.

      • aloria says:

        Try going across a river. I live right on the Hudson with a 20 minute commute to midtown and a beautiful view of the skyline from my street, and my condo only cost me $190k.

    • Bodger says:

      Let me know when you have enough sense to select a house that you _can_ afford rather that that McMansion meant to feed your ego. If you are not mature enough to know what you _can_ afford then perhaps you are better off renting for the duration.

  5. El Sabor Asiatico says:

    I’ve been using the “Don’t Buy Stuff You Can Not Afford” system for years now. Granted, I have almost no stuff, but on the other hand, I…uh…

    Damn, I wish I had some stuff.

    • Buckus says:

      Stuff can be good and bad. In fact, even the good stuff can be bad stuff. Case in point: I bought a 20-pack of toilet paper. Then my father-in law brought over one of those 50-packs from Costco. Now I have to find a place to store the TP, which means it takes up space I could have used for something else that is also useful, and It will probably be 9 months to a year before it’s all used up.

      Try living with less Stuff. It will probably be liberating on some level. Less stuff to find room for, to worry about getting stolen or breaking, less stuff to use electricity or water or other resources. Give away or sell stuff you don’t use or need.

  6. Harmodios says:

    If people would do this, than Consumerist would have 50% less to write about.

  7. framitz says:

    If only we had paid attention and taken this more seriously back then we might be better off now.
    I started purchasing only what I could pay for a few years ago.

    I may not have all the stuff I want, but I don’t have dept either.

  8. Buckus says:

    “What if I don’t have the money? Can I still buy it?”

  9. ArgusRun says:

    Yeah… Of course 60% of bankruptcies in this country are medical bankruptcies. Stop buying chemo if you can’t afford it!

    • GrayMatter says:

      and 45.21% of the statistics on the interweb are made up on the spur of the moment.

      • DirkWander says:
        • pz says:

          Medical laser burn!

        • NeverLetMeDown says:

          No, it wasn’t. Read the actual study.

          1. They’re conflating “went bankrupt because had very high medical bills” with “got sick, couldn’t work, went bankrupt.” The loss of income due to illness is something very different from having medical bills that can’t be paid.

          2. They also deemed anyone who had more than $5k in medical bills to be a “medical bankruptcy,” which is a pretty low threshhold.

          An honest summary of the report would be “60% of people filing for bankruptcy have either lost income because of illness of have amassed at least $5k in medical bills.”

        • Bsamm09 says:

          Did you read the article? Here is part –

          They concluded that 62.1 percent of the bankruptcies were medically related because the individuals either had more than $5,000 (or 10 percent of their pretax income) in medical bills, mortgaged their home to pay for medical bills, or lost significant income due to an illness. On average, medically bankrupt families had $17,943 in out-of-pocket expenses, including $26,971 for those who lacked insurance and $17,749 who had insurance at some point.

          Overall, three-quarters of the people with a medically-related bankruptcy had health insurance, they say.
          ———————————————————————————————————————

          This means they were in real financial trouble before the medical bills. If you had $30,000 in unpaid medical bills you should not be in danger of bankruptcy. This is not solely a “medical bankruptcy” I bet 100% had credit card debt.

          So Dirk, the OP was incorrect as well as you. It may be a contributing factor but the study does not suggest that medical bills were the cause of the bankruptcy. I would agree that if you were injured and could not work, that would be a bankruptcy caused by medical reasons.

          • DirkWander says:

            Merely a retort to the rather glib remark that suggested this statistic was made up when in fact it wasn’t. Google everything before saying anything people!

            Based purely on where my own finances stand, you have no idea how bad some people have it if you think that $30,000 in unpaid medical bills wouldn’t put somebody at risk of bankruptcy.

            Leave it to a troll to second guess researchers who put years of their lives into studies like this.

    • E. Zachary Knight says:

      So if people stopped buy “stuff” they cannot afford, we would be able to eliminate 40% of bankruptcies? That sounds good to me.

  10. Quake 'n' Shake says:

    This is great. I remember watching it and loving it.
    It does bring up a point though: Our economic growth over the last generation has been driven primarily due to Americans buying cheap shit they don’t need. Don’t get me wrong, I like my PS3, DVD Players, Home Theaters, iPods, etc… But in the end, none of that is necessary.

  11. sjgarg says:

    Ahhh geoblocking at its finest.

    Thanks Consumerist for no video!

    • AI says:

      In the State’s it’s called Hulu. In Canada it’s called Fffffffuuuuuuuuuuu-lu.

    • MercutioGeek says:

      <sarcasm>Pffft, why would people outside of the states care, certainly Americans are the only consumers in the world.</sarcasm>

  12. DirkWander says:

    Works pretty well for everything except education, medical care, food, shelter, and clothing.

  13. ScandalMgr says:

    See the story of stuff at http://www.storyofstuff.com for the impacts of your stuff, whether thrown away, sold or abandoned at your death.

  14. sopmodm14 says:

    you can’t goto jail/prison for bad credit right /?

    gonna go buy me some money now !

  15. sweetgreenthing says:

    Classic! No matter how many times I see this clip, I still laugh. Took me til I was 24 to actually put it into practice, and I’m glad to say it still works! Imagine that!

  16. WeirdJedi says:

    I’ve seen this video clip before and thought “How can people not know how to follow this?” Then I realized something. Many people get thrown into debt. It is better to pick up some medical debt than to be dead. It is better to pay for things required for a job than to not have one. It is better to pay attention to how the system works, than to simply ignore it.

    My family wanted me to go to college. They told me they would pay for my education. Scholarships helped out and the first couple years went great. Then they told me they were running short and I would have to get a student loan. Afterwards, they told me that I would be able to find a nice job and be able to pay off whatever accumulated through the loan. What job? I barely can get $600 a month. Won’t see me moving out anytime soon.

  17. DENelson83 says:

    Fuck Hulu!

  18. kittylauper says:

    Does anyone else think this is a little patronizing coming from someone like Steven Martin? People have debt from school, housing, medical bills, etc. When people can’t make ends meet they use credit cards to buy things like food and clothing. I guess the rich writers at SNL probably understand that?