March 15, 2010

Suze Orman Blames Womans Financial Dishonesty on Husband

So my wife and I are watching the Suze Orman show this weekend and she gets a call from a woman named Jennifer in Indiana.  [edit, I found a video of the segment with Jennifer on CNBC's site]  Jennifer had secretly ran up $65,000 in credit card debt over three or four years without her husband knowing about it.   One would expect that Suze would admonish this woman for her reckless debt accumulation and dishonesty to her husband, right?    Well no thats not what happened.   Suze puts on her quack psychologist / fortune teller hat to handle this one.   Suze asks the woman what she spent the money on and more or less pushes her to answer how Suze wants.  Suze asks the woman if she spent the money on necessities like groceries and gas for the car.  She uses a lot of "isn't it true that" prompts and only asks what she wants to hear yes to.   But then when the Jennifer says she also bought clothes Suze brushes that off and categorizes clothing as a necessity.   After Suze has basically pushed Jennifer into agreeing that she spent the money on food, gas and clothing Suze then basically absolves the woman of it.  Suze lays the blame on the husband for not bringing home enough money.   Let me repeat that.  The woman secretly charged $65,000 on credit cards and Suze blames the husband.  Suze even gets sarcastic about how the woman is lucky the husband is staying with her.   While Suze is on a roll in her psychic quack psychologist gig she also decides the woman has put on weight and asks her about that with a leading question.   The woman says her weight is up and down and she's gained 10 pounds over the 3-4 year period.   Suze then declares that the weight gain is also due to the financial issues.   She didn't outright blame the husband for the weight gain too but she may as well have.

So to sum up the segment:   Jennifer charges $65k in secrecy without telling her husband.   Suze's judgment: its the fault of Jennifer's loser husband who apparently isn't man enough to bring home enough money for her and he probably also made her get fat.

I was frankly astonished that Suze could argue that spending $65,000 and deceiving your spouse about it was justified in any way.   Well honestly I wasn't all that astonished.  Suze seems to like to play quack psychologist fortune teller fairly often.  Its not unusual for Suze to make a virtually baseless assumption about someones circumstances and then push her assumption on the person to explain the situation.  In this case the assumption seemed completely unwarranted and was unjustified.   Suze's assumptions and conclusions were wrong for a number of reasons:

Jennifer spent too much for just food and gasoline.   The woman spent $65,000 in 3-4 years.   $65,000 is a lot of money even spread over 3-4 years.   Thats $16,250 to $21,667 per year or $1,354 to $1,805 per month.   Thats a pretty large amount of money to be spending on necessities to supplement an income.  The average household in USA spent $3,465 on food at home, $1,881 on clothing and $2,384 on gasoline.    For a family of four the equivalent spending would be $5,544 on food $3,009 on clothes and $2,384 on gas which adds up to $10,937.   The woman spent 50-100% more than the average household spends on food, gas and clothes.    Furthermore the amount spent by the average household was a household with income of over $63,000.   I don't think you're struggling if you have that average income.   So either the woman spent way more than typical on necessities or she bought things other than necessities.

We don't know how much her husband brought home.   The biggest flaw in Suze's logic is that she didn't know how much the husband made from his job.  If he made a relatively small amount like $25,000 a year then Suze's conclusion might make sense.  But we didn't know that.  For all we know the husband may have been bringing home a large income north of $100,000 a year.   Or its just as likely that he made a middle income in the $40,000 to $60,000 range.  The conclusion that he didn't bring home enough money was totally baseless and unverified.   All Suze had to do was ask how much the husband made but she didn't do so.  She just assumed he didn't make much and then ran with it.

They live in relatively inexpensive Indiana.   They live in Indiana where cost of living isn't very high.  The median home price in Indianapolis was about $111k at the end of 2009.   If they have a median priced home then their mortgage payments would be around $800 level.   Since the cost of living where they live is relatively low I find it even harder to believe that she spent all that money on simple necessities.  Its a lot easier to stretch a dollar in Indiana than many places.

No matter the reasons, secret debts and financial dishonesty with your spouse is just plain WRONG.   Keeping secrets about your finances from your spouse is not OK.  Even if your reasons for spending money aren't the worst ones, keeping the spending secret is not all right.  Lying to your spouse is bad.  Turning around and blaming them for the dishonesty is plain stupid.

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