Saturday, October 18, 2008

Channeling Suze

There are many reasons why Suze Orman is one of our favorite financial advisers. Her famous quote "First People, Then Money, Then Things" is a great reminder of what is really important in life. It is easy for the people to put them in reverse order. That is evident with debt causing divorce - things first and people last. Sometimes there are things that can bring people together - that can be a wise investment even in troubling times. This brings us to an article in the New York Times titled Some Purchases May Still Be Worth The Price.

Although the story is about a family making $250,000 and buying a boat that really brought the family together, some of the advice can be good for everyone on any budget. Lets take a look -

Homeowners had already been feeling poorer, and the devastating investment losses have made thrift a necessity for many people. Saving every extra dollar now seems the most sensible course of action, given predictions of rising unemployment and daily mentions of the Great Depression.

But it’s easy to forget a couple of important things. First of all, the vast majority of people in the United States are not going to lose their jobs. Second, most of us work not merely for subsistence but so we can spend money on things and experiences that bring us some form of contentment.

This is not a call to consumer patriotism, a suggestion that we all go shopping for the good of the economy. Instead, I’m merely suggesting that if you’re feeling undeserving of anything special at this particular moment, or think you should help perform some sort of collective penance for our national overspending, you may want to cut yourself some slack.

Perhaps it’s buying a better bicycle and taking daylong rides with others (or commuting to work to get in shape and save money on gas). Or it’s the fanciest paella pan or pizza stone you can find, which keeps you out of expensive restaurants and at home with friends and family who will appreciate your new skills, the free meal and the conversation.

A sports car probably doesn’t qualify here. Nor does a tummy tuck. Instead, it’s about investing money tactically in our relationships with one another, building bonds that last beyond ones to any particular employer or a house that we may no longer be able to afford.

The key to the article is figuring out what purchases will bring the people in your life together and what are frivolous. For someone who liked to go out to dinner an investment on some great cookware may be well worth the price - can save money and bring people together.

If you go back and read books from the Great Depression one of the hardest aspects was the isolation due to lack of money. People had no money for activities and/or proper clothes so they isolated themselves. The isolation pushed them into a further despair.

In her book The Invisible Scar: The Great Depression and What It Did To People, From Then Until Now, Caroline Bird documented the long-lasting cultural problems that arose from that dark period in American history. The preservation for historical purposes is important so we can learn from the past and not make the same mistakes. She wrote the book so people would not forget, so lets make sure we do not. Now is the time to embrace Caroline Bird's and Suze Orman's advice.

No comments: