I love Suze Orman. I think her show is lots of fun to watch. She’s smart, engaging, and who doesn’t love her ‘Can I Afford It?’ segment? I just saw an ad for the Halloween episode, and I remember watching last year’s ‘financial ghosts’ episode one year ago.
The being said, I was watching her most recent show and she told a couple in their late 20s not to spend $400 a month on going out and $500 a month on saving for a vacation. Instead, she told them that $400 a month would turn into $1.3 million by the time they retired and if they had saved that money for the past 6 years instead of spent, they would have an additional $1 million by retirement age.
Way to make them feel bad, Suze, without actually solving the problem.
What annoys me is that instead of saying how much they should save, she attacked their spending.
You know my take: After you make sure you’re saving enough, spend whatever you want on whatever makes you happy.
Suze could have empowered this couple to set goals for themselves, but the only goal she had them set was not to go out until they were able to eliminate credit card debt by $2,000.
These people will resent the new plan (or Suze!) because they’re being forced to cut back on the things they enjoy.
They probably are spending too much on these things. That’s why they have $10,000 in credit card debt. But telling them to stop having fun altogether is just plain wrong.
A better idea would have been to have them set goals to pay off the credit card debt while setting reasonable limits for how much they should spend on activities they enjoy. But once they get it under control and once they are able to save that $400 a month that she suggests (or however ever much they should be saving for retirement), they should be free to do whatever they want with their money.
These people make over $125,000 per year, so there should be enough to pay the bills, invest in their long-term savings, and still have some extra so that they can enjoy themselves, too.
After all, what’s the point of working hard for your money if you’re not allowed to spend it?
Right now these people are slaves to their debt. Under Suze’s plan, they’ll be slaves to their savings.