The reason a lot of people are in credit card debt is because they don't ask the question- Can I afford it? They just pull out their credit card and say "Charge It"
Suze Orman does a great segment on her CNBC show called Can I afford it.
Some of the things that I have seen asked
Coach Bag for $500
I don't get the whole concept these high class pocket books. I don't think I have spent more than $50 a good bag and most of the time my mom gives me one for my birthday every other year. LOL
The 24 year old girl said she was debt-free but had a $5000 bill in collections and had over $400 on her credit card. She was going to use her work bonus on paying for the Coach bag. Suze denied her "Can I afford it?" No, no put that money towards your credit card debt-you have no business spending $500 on a pocketbook.
I thought for sure Suze was going to approve this one. The mid 40 guy makes good money-has $26,000 in personal savings/emergency fund and he was going to pay cash for the Harley. She said his 8,000 won't be 6-8 months of an emergency fund. She denied it! When you think about it good advice-bulk up more of the personal savings and he would do it once he gets the 6-8 months of an emergency fund.
She does approve every once in a while-she approved a 30 years for a $75k vacation home.
I have been enjoying Suze's money sass lately and really do need to pick up her newest book.