This Week in Your Wallet: September 25, 2012
During my regular Monday-morning perusal of the financial news, a headline in the Wall Street Journal caught my eye: “It’s Really OK to Say, ‘I Can’t Afford That.’” The introduction to the piece went on to say, “Many people would rather struggle to pay off a large credit card bill than utter the phrase, ‘I can’t afford that.’”
There weren’t any statistics associated with this claim, so I have to wonder: is this true? While I know that the “keeping up with the Joneses” effect is a real cause of overspending (just ask any two neighbors with matching SUVs), I think this gets at something different. Flipping the statement on its head, being incapable of saying, “I can’t afford that” is like being unable to say, “sorry, that’s out of my price range.” And how many of us out there haven’t uttered those words while shopping with a friend or family member? It’s how we stick to our budgets — and there’s absolutely nothing shameful about that.
However, as comfortable as I might be when it comes to asserting the limits of my budget, I know that sometimes — whether because of a pushy salesperson or a slightly judgmental friend — it’s easier to seem like the sky is our credit limit. That is why I was happy to see the Journal article provide some alternative ways to convey that no, you can’t afford that:
- Blame your advisor. Remember when you were a kid, and you didn’t want to go to a friend’s sleepover but you pretended like your parents said you couldn’t so you wouldn’t hurt yourfriend? This is the grownup version. If a group of friends is pressuring you to go on a pricey vacation, or your siblings want to give Mom and Dad a lavish gift for their 40th wedding anniversary, put the onus on your financial adviser. “Oh, my advisor has me on a new saving strategy,” you could say. “I have to check with her first.”
- Give advance notice. If you see a lot of expenditures piling up for one month — birthdays on top of birthdays, or a pricier-than-usual car inspection — there’s no harm in saying to yourfoodie friends, “Yikes. I overdid it a little with gifts for the twins’ birthdays this month. Maybe we could have a homemade dinner party instead!”
The Journal article, linked above, has some other good tips for excusing your unwillingness to spend. I recommend taking a look, but I also want to remind you that there’s no shame in saying that something is out of your price range. In fact, I bet your friends (if not the salesperson) will appreciate your honesty — and might even feel compelled to save some money themselves!
And now, here are the other headlines for the week:
Help For Stay-at-Home Moms
On Friday, the Consumer Financial Protection Bureau announced it will propose a big change to the CARD Act of 2009, one that will help stay-at-home moms get credit cards. Under the current CARD regulations, lenders evaluate a consumer’s “ability to pay” based on personal income, not family income. As you would imagine, this has inhibited stay-at-home spouses (many of whom are in fact moms) from establishing their own credit.
“The rule was originally intended to protect college students and to prevent them from getting into too much credit card debt,” Adrian Nazari, CEO of the free consumer financial resource website, CreditSesame.com, said in a statement. “Unfortunately, it also hindered stay-at-home parents from obtaining their own credit card and developing an individual credit history. With Congress updating the law, stay-at-home parents will have regained their financial freedom.”
The Latest and Greatest in Financial Apps
All you technology lovers out there will like this item: this Friday, I’m serving as a judge in the MyMoneyAppUp Design Challenge. All the apps in the challenge were designed to help improve personal finance habits and financial decision making, and there are some really great contenders. You can view them all here, and if you have some time on Friday morning at 9am, you can tune into the live webcast of the winners here. Who knows — you might get a sneak peek at the next app to revolutionizeyour financial life!
A Special Announcement…
I’ve been waiting to tell you until I was sure I could actually do it, but I’m going to run the New York City Marathon at the beginning of November. This weekend I ran 17 miles. It took me about 3 hours, but I did it without stopping. So now I feel confident enough to share. Truth be told, running a marathon has been on my list for about two decades. I’ve run a few halves. But always backed away when it came to the whole enchilada. Not this time. This time, I’m running for a reason. Along with Top Chef’s Richard Blais, I’m one of the captains of the team for the Alliance for a Healthier Generation, which is working to combat childhood obesity. I am so excited to be working with the Alliance, part of the William J. Clinton foundation, on this effort. If you’d like to support me — and the team — in my race, you can do it here. And thanks!
Have a great week!
Jean
