Guys, you may not be tempted by shoe clearance sales. But do you know your three money blind spots?
My husband is a pretty smart man. And not just because he picked me for a bride.
No, empirically, he is a smart guy.
But there’s one decision that sticks out to me. Not just for sheer intelligence, but for insight into the differences between men and women.
It was a spring day, and my husband — who was at that point just my love — decided to include me on a very special shopping trip. No, not to the jewelers. But to Best Buy.
He had worked diligently — hauling hay, engineering, you name it — to earn money for college. But he had some special money socked away, and it was time to spend it.
We entered the doors under the big blue sign. My love showed no hesitation. His homework was done. We headed straight to the Sony aisle.
There, with a smile, he methodically pointed out his purchases to the sales guy. CD player. Receiver. Components. Wires. Gadgets I’d never even heard of. The works.
As he handed over the cash at the checkout counter, I could tell he was buzzing from his electronic purchasing high. I felt nothing.
Don’t get me wrong: I was happy for him. But it just didn’t thrill me. For all the stereotypes that women are the musical ones, you’ll rarely see a group of girlfriends giggling over a subwoofer.
So where’s the smarts? Well, a few months later he proposed. Note that his purchase preceded the diamond.
He knew. He understood that Venus and Mars have different money priorities. As a newly engaged lady, visions of Noritake china were soon dancing in my head. The only electronic thing on my wedding registry was a blender.
He understood that and accepted it. And made the decision — not sneakily, but honestly — that the stereo was one thing he really wanted to do. And he probably ought to do it before he took on a bride. Brilliant. I still don’t get it, but brilliant.
Whether it’s nurture or nature, or a little of both, women and men see money differently. They spend differently; they have different priorities.
For all our posturing, it’s not that either one is empirically better. Sure, many a guy may cringe that his girlfriend plops down three figures for a purse. But, as the Bible says, Get the Panasonic out of your own eye before you remove the Dooney and Bourke from your sister’s. Or something like that.
God created us as complements, including our financial outlooks. We each have gifts — and blind spots. So, as a guy, what it is that you need to watch out for?
1. The Big-Ticket Item
Men and women actually spend about the same, says financial counselor Ruth Hayden in an article at Bankrate.com. But while women spend their money gradually over time, men spend it on a number of big things. You know, the car, the boat, the computer, the digital camera, the whatever.
Should men be exorcising these big ticket demons from their brains? Not necessarily, says Gordon Wadsworth, author of Cost Effective College. It’s just that guys need to be aware that big-ticket items come with their own unique pitfalls.
The glaring one being the “payment plan.”
Don’t worry about the price, coos the sales guy into your ear as you eye a 32-inch flat panel. I can put that in your car for only $100 a month.
Well, $100 doesn’t sound too awful. But the salesman fails to mention that by financing the TV and tax for 24 months, your $1,899 television just cost you closer to $2,500.
Then there’s what Wadsworth refers to as the “No, No, No” plans. You’ve seen them — no payments, no interest, no whatever for however long you want.
Those sound pretty nice. After all, if the store is going to let you have a year to pay off your computer without charging any interest, why not let them?
“It’s a trap,” Wadsworth told Boundless. “If you don’t pay it off, you get killed with interest. The No, No, No plan is very dangerous and very easy to get caught in. That’s why the companies are using it.”
Just check out the fine print. Yes, most retailers offer no interest for six, 12 or 18 months. But go one day past your time without paying off your balance (which most people haven’t), and they’ll charge between 19 and 22 percent interest. And not just from now on. Oh, no. It’s retroactive from the day you bought your item. Brutal.
As hard as it sounds, experts agree that if you can’t pay cash, you need to take a hard look at your purchase.
No one enjoys delaying gratification. But if you pay that “payment” to yourself and sock it away before purchasing, you’ll save yourself hundreds in interest charges. Plus, you’ll have the added bonus that your equipment won’t be obsolete before it’s even paid off.
“Men will say, ‘I need a new computer,’” says Ruth Hayden. “No, you want a new computer because it’s faster, it has more bells and whistles. Men move those things they want into an investment category, ‘This is a good investment.’”
By convincing yourself it’s a good investment, you rationalize away the guilt of an unnecessary purchase.
“It’s like me with my BMW,” Wadsworth says. “If I just got a BMW, I know I would impress more clients and get more business. And then with more business, I could actually afford the BMW.”
Wadsworth laughs, “But I still don’t have it.”
The problem is that saying something is a need doesn’t make it one. To be honest, there is very little we need. We need food, but not DSL. We need shelter, but not a smart phone.
So, before buying, ask yourself the first tough question: Do I really need this? The answer is probably no.
Since there’s very little that we actually need, if we stopped here we’d never purchase anything.
That question just provides a little clarity for the second tough question: Will purchasing this get in the way of my first financial priorities (such as tithing, paying taxes, providing for my family, keeping out of credit card debt, giving to God above my tithe)? If the answer is yes, hit the brakes.
“Guys like to outdo other guys,” Wadsworth says. “We’re always looking at the Joneses.”
At work, on the court and, often, with money — it’s easy to slip into competing with others rather than striving to be like Christ.
How to combat the urge?
First, remember whose praise really matters. No amount of envious looks from your buddies is going to equal the satisfaction of spending your money in a way pleasing to God.
Second, Wadsworth says, try the two-year rule.
During college, most guys don’t have a whole lot of disposable income, so the “toy temptation” isn’t as strong. But when graduation hits and the paychecks start coming, watch out.
“All of a sudden we think, Oh, we gotta have a nice apartment, we gotta have a car, we gotta have everything,” Wadsworth says. “So get an apartment — but don’t fill it up with new stuff. Need a car? Fine, but don’t buy a new one. Just be very conservative for the first two years until you get on your feet. After that, you’ll know more about what your income, expenses and life situations are.”
There’s another reason for staying conservative for those two years, Wadsworth says. You’re in training.
If you can’t keep yourself from spending now, you won’t be able to in the future. Practice prudence early — it will save you a financial headache down the road.
Copyright 2005 Heather Koerner. All rights reserved.