Why We Should Judge People By Their Finances

A recent Saving Advice article called on all of us to pursue the path of kindness when confronted with people who are suffering as a result of our current economic crisis. I am very much in agreement with the author’s plea that we approach people in hardship without “anger” or “resentment” – those emotions are not going to help anyone – but I cannot agree that we should address people in financial distress without “judgment.”

We have to judge the mistakes of others and doing so is neither cruel nor hateful. It is merely a way of acknowledging that mistakes were made. Indeed, if we do not acknowledge the mistakes that are at the root of a problem, I do not believe that we can address the problem.

A colleague of mine who was laid off from his job at the same time that I was (about 15 months ago) mentioned in an e-mail that he has been able to weather the economic storm because he has been “saving, saving, saving” for the past several years. I have been doing the same and, although the depletion of our bank accounts is unsettling, I still have a cushion to see me through to a job later this year (I hope!).

While we were saving our money, and buying comparatively modest homes, our other colleagues were chiding us for not investing heavily in the stock market. They could not understand how we could be content owning only those things that we knew we could afford or how we could stay home and relax on our vacations, rather than travel the world. For that matter, I was often asked why I was driving such an old truck (a 2002 model with only 80,000 miles on it – so still young in my mind) when I could trade it in for a new vehicle.

When we look back on the past decade and more, we see a global culture that was engaged in hyper-spending based on theoretical money. Even after the dot com bubble burst, and people started to realize that the value of so many dot com success stories amounted to little more than vapor, people in the USA continued to believe that housing prices would continue to rise forever. As a result, homebuyers over spent for fear of being left out of the riches that could be gained from the appreciation of real property.

So where does that leave us now, when we have to deal with all of the millions who are suffering? Where does it leave us as individuals as we look at our own problems and our own mistakes?
It leaves us as judges.

And that is not a bad thing. For too long, Americans and people in other developed nations have lived with a sense of entitlement. A sense that success should come easy. A sense of “I’ve want what I’ve got coming to me.” The thing is, we have no entitlements. Success does not come easy. The only thing that is coming to us is what we earn. Someone needed to remind us of that a long time ago. We all should have had judges to tell us what we were doing wrong.

So I suggest, the next time you encounter someone with a problem, judge them. If they caused their own problem and they are not acknowledging it, tell them clearly, but without malice, that they screwed up. That is judgment.

But do not stop there. After you have judged, you need to go on to inform. Explain how the problem could have been avoided and what the person can do to remedy it going forward. If the problem cannot be remedied, be clear about that and then encourage the person to move on.

The problems arising in our economy today are of our own manufacture. We are all judged to be at blame and there is no harm in admitting it. In fact, if we did more consistently assess ourselves and those around us, and pass judgment on the merits and flaws of our collective behavior, we may find that we do not create another economic crisis a generation after the current crisis ends.

What do you think? Are we tough enough to give tough advice and to receive it? Shouldn’t we be strong enough to be judged? We all have flaws and failings. Is it time that we accepted them and were able to hear other people admit them to us.

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19 Responses to Why We Should Judge People By Their Finances

  1. Jeff says:

    I agree with you 100% David.

    I worked hard for what I have and have done without to be able weather storms and now I am called upon to to “help” others who were too sorry to prepare themselves. Pffft!

  2. Ann says:

    I agree and disagree with you.

    I agree in the sense that a number of people’s financial responsibility compasses have gotten way out of wack. These are the people who live for instant gratification at a cost of unreasonable debt levels and living paycheck to paycheck. These are the people who think that it’s more important to have “things” to impress other people than it is to feel safe and secure with money in the bank. These are the people who teach their children that they can have anything they want when they want it.

    I disagree, at least in some cases, because I had it pointed out to me a long time ago, that not everyone is as smart as you and I.

    There are people out there who really didn’t (and don’t) understand the math and believed their realtor and banker when those people told them that they could afford a bigger house. They were buying it to live in, not to turn in a handful of years, and, if they understood any of the math, thought that they could simply refinance to a fixed rate in a couple of years, when they got past the original expense of the move.

    There are whole generations younger than I am who were not raised understanding exactly what it costs to use a credit card. Chances are pretty good that these same people weren’t taught how great it feels to work and save and pay cash for something big, whether it’s a sofa or a car or a special vacation. No one ever told them about the time value of money in the saving sense and they were raised to think that social security and/or a pension would pay for everything they wanted in retirement. And, banks and society kept telling them “here’s another credit card”, “take out a home equity loan and use it for a vacation”, “don’t wait when you can have it now and just pay $____ a month!”

    These same people are naive enough that, at least until recently, they believed the government and the advertisements that told them spending is good for “everyone” and that it’s “necessary” to have the latest electronics, designer clothes, a new car every two years, etc., etc.

    The way I see it, individuals, parents, our educational system and our supposed leaders/role models are equally responsible for what has happened to a number of average americans. Of course, there are always the extremes — people who were beyond piggy in their spending and allowed their debt to REALLY get out of hand so they could “impress” other people or because they want to be their children’s friends instead of their parents/mentors/primary role models.

    When I look around me, I consider myself VERY lucky. Saving and planning ahead were so much a part of my childhood that they were lessons absorbed as blindly and silently as the nutrients in the food I ate. I’m also smart enough that, when I did something fiscally irresponsible (and when you’re young that’s likely to happen no matter what!), I recognized it, corrected it and considered it a lesson learned, not to be repeated.

    Like most things in life, this isn’t a black and white issue, so just be a bit careful about how much you judge.

  3. justme says:

    I do not care to make excuses for iresposible people they seem to be just fine doing that for themselves

    when people knock it off and say they were iresposible admit their mistakes they can really change their own lives

  4. EEinNJ says:

    Using judgment for yourself is one thing, judging someone else quite another. Certainly there has been greed and irresponsibility, from the people and corporations at the top on down. Like a casino, Capitalism thrives on winners and many more losers, sold on the illusion we can all be rich, or live that way on borrowed money. It’s in the best interest of the house to keep the losers ignorant, in debt, but hopeful.
    So you didn’t go into the casino- me neither. But I also know there are many more who got hit by the economic bus even when they were doing everything right. I would avoid being sanctimonious- you could be next.

  5. Dana says:

    Isn’t the way someone deals with their money a reflection of their upbringing, lifestyle and value system? It’s kind of hard to challenge people’s general view towards money if they are not open to the idea, because it’s so closely intertwined with who they are, isn’t it?

  6. Jill says:

    David, I couldn’t agree with you more. I am sick and tired of having to support people that were greedy and got in over their heads. I work very hard as did my husband for what we have and I do not feel like it is my responsiblity to take care of the people who DIDN’T want to work hard or plan ahead. You have hit the nail right on the head with this article. Thanks for bringing this side out of the darkness!

  7. mst says:

    This is a good point. I somewhat agree with you. However, this is general nature of people. Most of the times, people are careless with their finances till they are doing good. They realize the importance of money management only when they hit a rough patch

  8. RAJEEV TIPS says:

    Agree with you that we need to empathise with people who might not have done well in the past with their finances… Just help them set things .. the least we can do..

  9. Persephone says:

    I have to admit that I, other than with respect to my husband and children, have a hard time telling people what they don’t want to hear. I think that I am a people pleaser and, in part, at least in this context lazy. After all, it is emotionally and intellectually draining to spar with people. That said, I agree with David that some people need to know that they have caused their own problems. I feel strongly, however, that criticism must be construcive and doled out compassionately.

  10. Hilary says:

    But do not stop there. After you have judged, you need to go on to inform. Explain how the problem could have been avoided and what the person can do to remedy it going forward. If the problem cannot be remedied, be clear about that and then encourage the person to move on.

    You are going to leave a large trail of ex-friends if you do this. There is an appropriate time to give advice, and if the person does not ask for advice you shouldn’t be giving it. I make this mistake far too often (giving advice when it’s not wanted) and it is a huge strain on my family and friends. Also, did you ever consider the (shocking!) prospect that you could be wrong with your advice? Your decisions might be right for you but might be wrong for someone else.

    Also this made me chuckle.

    …that not everyone is as smart as you and I.

    You’d think she would at least use proper grammar when proclaiming how smart she is. And it rubs me the wrong way that somehow be financially savvy is supposed to be an indication of “smarts.” I disagree strongly.

  11. Ann says:

    Being financially savvy may not be an indication of “smarts” but taking responsibility for our own actions and learning from our mistakes are.

    There are all kinds of “smarts” but I’d be willing to bet that a common underlying factor is observing and learning and one thing we all learn along the way is that that there are consequences to our actions. I’m saddened that so many people are learning some of this the hard way. I believe that most people, offered the opportunity to be educated as to how to avoid in the future the financial quagmire they’re in now, would leap at the opportunity.

    I don’t have much sympathy for people who are in trouble now simply because of credit card debt. I do have a lot of sympathy for the everyday, hardworking person who foolishly fell for an adjustable rate mortgage and now can’t refinance at a fixed, lower rate because their current mortgage far exceeds current home values.

    I think that people who were bringing home a really nice paycheck, but insisted on a new car every two years and every new electronic gadget or closets stuffed with designer clothes, spending every cent of that paycheck and beyond, deserve to be faced with the consequences of their actions. That may be harsh, but, if they haven’t learned before how to take responsibility, it’s about time they did.

  12. Hilary says:

    I think I generally agree with you Ann, especially statements like, “The way I see it, individuals, parents, our educational system and our supposed leaders/role models are equally responsible for what has happened to a number of average americans.” I just think that the “smart” statement is almost inconsistent with this. Even though in theory I wouldn’t have sympathy for someone who was blindly overindulgent and irresponsible, I just can’t blame that person too much because of all these other factors that you yourself mentioned. Furthermore there is always more going on in a person’s life than you can see as an outsider, so even if it looks like a completely clean-cut case of overindulgence, that may not be the case.

    I do appreciate your statement earlier that you consider yourself lucky to have a good financial upbringing.

  13. Bill McCollam says:

    I think this is self evident. You can’t let people blame the system or the government or the companies. It’s about accountability.

  14. Beth says:

    Thought-provoking article. I’m probably not comfortable giving advice on financial matters to friends – rather I’d like to know tips and strategies from folks that are fiscally astute – whether it’s not living beyond their means or making solid financial decisions. Waxing a little philosophic – I believe some folks could benefit from a finanical “coach” who could offer advice (without selling a particular product or service) and before people get stuck with overwhelming debt or poor decisions.

  15. baselle says:

    I’m of the opinion, “judge not lest ye be judged.” That works reasonably well with people we first meet at savingadvice.com.

    However, the nut is how do you talk face to face with those family and acquaintances (I assume you’re not friends) who several years back judged you as being stupid, hokey, cheap-ass sticks in the mud because you didn’t take out the subprime loan, invested with Madoff, used the house as an ATM, or ran in hock with the credit cards?

    Do you hold your tongue and assume that they’ve learned their lesson or do you judge? Hate to say it, but if you judged me first, I get to judge you back.

  16. ThiNg says:

    I’m not a very religious guy (when it comes to visiting the house of god), but where is the compassion in these posts?!?

    If I see a ‘bum’ on the side of the road I don’t ‘judge’ him. I help him if I can.

    Your advice is FREE. It costs you nothing. In fact, I would argue that you learn more during the process of teaching others. Why would you hold back in a time of need??!!?!

    What happened to giving without thinking of what you get in return? They might be taking advantage of me, they might judge me in the future, or they may have judged me in the past, but, why would I stoop to their level?

    What about taking the high road? Put your anger and resentment aside (I resented being labelled all those years for being cheap and miserly) and help people with out any expectations?

    Give freely. That’s how I got here, people gave advice to me freely.

  17. IRG says:

    Why judge? (Who made you super righteous and all knowing, by the way?)

    Why not just help educate and inform, if people want help. And do it in a way that it will be heard.

    There’s an art to offering help. One of the reasons many do not take it is because it comes with heaps of judgment and shame and scolding. (Who needs that? Most people are beating themselves up already.)

    That will help no one.

    You assume that anyone who is smart could not possibly be in debt, have financial challenges of have screwed up. How far from the truth that is. Financial mistakes happen at all socio-economic levels and there are plenty of people who make plenty of money who have little savings and huge debts –AND are educated and “smart”. They just have way more resources to get out of debt than the average person. (And don’t think some of these folks don’t take advantage of others to get out of debt…)

    Most people fully accept responsibility for their financial errors. THEY do not ask for bailouts for the most part. Because most people are truly ashamed of themselves and are beating themselves up.

    You act as if everyone has had a lifetime of access to good role models (at home, in school, socially) and information to learn about how to handle finances. Really, what planet do you live on?

    But this is simply NOT the case.

    Get off your high horse. You can show compassion without having to help others out of the mess they’ve created.

    Compassion goes a long way in helping people to acknowledge their mistakes, learn from them and then fix them.

    It’s attitudes like yours that make life so unnecessarily difficult for many.

    What’s fascinating in the world of debt and finance blogs is how many judgmental folks there are, particularly those who have messed up their own lives. Once they “fix” them up they get all attitude about others.

    Take care of your own house. It’s really not your business to judge others.

  18. Charlotte says:

    Interesting commentary. It made me stop and realize that nine years ago I was judged and it was the best thing that could have happened to me.

    My husband and I had just sold a home in one state and were looking to buy a home in another. We *thought* we were financially fit. We had just sold a home and paid off our credit card debt and moved to a new state. I hadn’t worked for a few years because I was home with the kids. But, we thought everything was still fine with my husband’s income. As we tried to buy a moderate house for $75K, we were flat told no to our faces. The agent looked at us and said “you’re driving your house payment” as he motioned toward our new SUV sitting in the parking lot. He looked at me and said “you don’t count” because I hadn’t worked in a few years.

    We gulped and gasped for air. We were incredibly embarassed. Then, we got mad. After realizing our venting wasn’t going to make ends meet for our kids, we set about changing our lives. We rented an apartment. I kicked myself into gear, enrolling in the local university to finish my degree and found a good part-time job. We sacrificed for the new few years and got our financial situation straightened out.

    Today, we both have great careers (teaching/government), own a really nice modest home and our finances are in great shape. Our oldest child is in college and we’re not borrowing money to finance it. We feel relatively safe in this recession, although I’ve still planned and prepared for that possible “rainy day”.

    Nine years ago, we were judged and told what we should do regarding our money. Even though I hated him, that real estate agent was the only person who helped propel us to this financially safer place we are today.

    Truth hurts, David. And you’re right, sometimes it’s exactly what we need.

  19. Sharon says:

    You must be so much fun at parties.

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