The morality of personal finance
I was running last Sunday night. I had waited too long to start my run, and it was dark. I’ve taken to using my iPhone to track my runs, because I’m very motivated by the additive nature of all my runs over time. (I’m over 900 miles!) But I don’t like to use the earbuds when running in the city, especially at night, because of the need to stay alert for those pesky fast cars; I want to make sure and come home to my kids. I had pulled the iPhone out of my pocket to see how many miles it had been when I went under a tree and over some roots and tripped over the dark, uneven sidewalk.
I went down, hard, and my iPhone flew out of my hand and facedown on the pavement, shattering the screen, bruising my hip, scraping my elbow and my hands. None of my injuries were bad, but I knew my iPhone would now need a total replacement (the backlight was already out, due to an encounter with a hornet near the edge of a lake this summer, so I have to tilt it toward the streetlights to see the numbers).
It would be $169, the Apple store representative had told me when I went in. I’d bought the iPhone outright, for work, so I could string together a very cheap pay-as-you-go plan based on my always-changing usage. I use it to sell magazine subscriptions and respond to last-minute editing questions and manage schedules when my children have those minor emergencies that children have. It’s a need, and I’m going to have to spend the money.
I thought to myself, in light of a string of comments on my last post about money anxiety, how irresponsible and immoral!
If check-bouncing is immoral, so is falling down and breaking your smart phone.
Someone had taken me to task for worrying that I might bounce a check I’d written. I didn’t get into the context, but here it is: I had promised to buy a pig from a farmer, sharing it with a bunch of friends. At the time, I didn’t know when exactly it would be ready, nor did I know exactly how much the total would be. I had an estimate: $600 to $800, after the deposit I’d paid. And I’d just finished a big extra project, for which I was billing almost $500; plus I was sharing the pork, so I’d collect money from my friends to cover $400 or so. And then, my husband transfers money to my account twice a month for groceries, when he gets his paychecks. I’d have way more than enough money.
The consulting project check didn’t come when promised. (In fact, it ended up being over a month late.) The pig needed to be picked up the day my husband usually transfers the money — otherwise she’d run out of freezer space. It ended up being $900, not $800 or $700 or $645. A couple of my friends were going to pay me afterward.
When I wrote the check, I had $900 in my account, but only just, and part of it wouldn’t clear until the next day. I had one of my friend’s checks depositing, but I wasn’t sure how quickly it would clear. I worried that some small monthly automatic payment (like $7.99 for Netflix) might hit in the meantime; if everything went wrong, it would be a nasty bounce.
I went into the pork transaction with my eyes open, knowing that it was theoretically possible things could go wrong, but thinking they wouldn’t, and meaning well all around.
Mistakes are not immoral, even if we are being headstrong.
Heck: I’m pretty headstrong. El Nerdo asked me if I might be ADHD (I laughed! I’d never thought of that before, for some reason, but that describes me pretty well). I rush into things that are good ideas without thinking about every last detail. I say “yes” too fast. I run under trees in the dark. I agree to buy some (very, very delicious and very reasonably-priced) pork from a small farmer who is living every ideal I believe in. So I end up making a lot of mistakes.
Accuse me of being irresponsible? Maybe, I do a lot of things that are irresponsible from many people’s perspectives, because I think they are worth the risk. But I think “immoral” is going a little too far.
If check-bouncing is immoral, then so are car accidents
A friend got into a car accident earlier today. The sun was in her eyes and she rear-ended someone. She was thoroughly shaken and called herself an “idiot,” several times. It’s probably going to make her insurance payments go up, and she’ll have some out-of-pocket expenses. She feels as awful as she can be. But, as we all told her, it was a mistake. We don’t say that people who make mistakes are bad people. They’re just … clumsy, or in the wrong place at the wrong time, or unlucky in sunlight.
Most of us are moral creatures. But we’re all human. And you know what they say about erring.
A statistic from some of Elizabeth Warren’s research about bankruptcy has impressed upon my mind; though bankruptcy is often seen as an easy way out taken by the careless overspenders, it’s far more likely to see people with high medical debts and those who have gotten into a trap of using credit cards to pay utilities and food bills. In fact, a large number of people who qualify for bankruptcy don’t choose that route, instead scraping and scrabbling to pay their debts. Most of us want to do the moral thing, even when the cards are stacked high against us.
Yet still, we end up in these holes of good intentions and bad timing. We get headed in the right direction financially, and then we have a spate of terrible luck. Because we’re embarrassed or ashamed or without bandwidth to find a better solution or even the victim of other people’s mistakes, we overdraw accounts and spend past our cushion and reach our credit card limit.
Spending time calling ourselves idiotic or immoral won’t fix the problem
Nothing is ever yielded by judging ourselves for our screw ups. And you’re surely not going to fix the world by judging me or anyone else for their financial missteps. Presenting ideas for solving these problems — like the establishment of a checking account cushion (I want one, and I’m going after it!) — is one idea. Remembering it the next time you get close to charging headlong into a decision is another (I’ll be waiting until I have the money in hand to order the next pig). Forgiving yourself is a third.
I’ll tell you that I break personal finance rules all the time. And I get so upset when I find myself doing it! I resolve to do better. And lots of the time, I do.
None of us is perfect; some of us have better discipline, or place more value on financial security, or simply have more income and better luck than others. We’d do well to give each other, and our own fool selves, the benefit of the doubt more often than not. And try, try again, to be a financially better person.
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There are 80 comments to "The morality of personal finance".
The key to judge morality has to lie in the element of choice. You don’t choose to fall over a tree trunk in the dark or have an accident. You may have been negligent, or careless perhaps, but not immoral.
Immoral somehow seems to include an element of knowingly making a choice you know is wrong. To categorize falling and breaking your iPhone as immoral therefore seems to be a reach.
People can moralize about writing a check without knowing for sure you have the money to back it, because that action involved a choice, a bad choice, a choice which you had 100% control over. You could just as easily not have written it and no harm would come to you. Some inconvenience or embarrassment, perhaps, but no bodily harm. That decision therefore just doesn’t seem to be in the same boat as tripping over a tree trunk.
There’s another element of distinction: morality is personal. Some think it’s wrong, others don’t. I know someone who kites checks all the time, and to him it’s not wrong. He’s a salesman and I get the idea he relishes the challenge of trying to sweet-talk the recipient and the bank to get out of the mess. He doesn’t see anything wrong with kiting checks, and so to him that’s not an immoral choice. My wife would die before doing something like that, because that would violate her sense of morality.
Morality, therefore, is a personal thing: some like it, some don’t. (In fact, some would argue that it’s for that very reason that society makes laws to establish a ground level of morality for that society.) Falling over a tree trunk, or having an accident, well, I can’t imagine anybody thinking those are good things.
To lump events involving choice and taste with others which are not might therefore not be wise.
I would disagree with your statement that “…we end up in these holes of good intentions and bad timing.” Not always. Situations are avoidable by exercising patience, others with planning, and others still with some renegotiation ahead of time.
Finally, whether we benefit from telling ourselves we screwed up or not depends on us. They key is: what will make me not do it again?
If I don’t beat myself up for screwing up, I often repeat the mistake. (I know, nobody has ever accused me of being the brightest bulb on the tree.) So I beat myself up. I don’t go overboard and assume the identity of an idiot, but I do hammer myself in order to get better and not make that mistake again.
If we let ourselves off the hook all the time, in the name of cutting ourselves slack, we often repeat our mistakes. If you’re good enough to not repeat without beating yourself up, good for you.
Not repeating a mistake: that is something of great value, and if my ego needs to suffer to get there, let it. Whether others or I inflict that pain doesn’t matter; what matters is getting better. And to me that matters a lot.
I’m with William on this one. I think that accidents are not moral because they lack the the element of choice. That said, your reaction to an accident may be a moral decision if you’re having to make a choice between owning up for your mistake and paying the price or lying about what happened to get a reduced cost repair or insurance coverage that you might not have had, or expect someone else to foot the bill for your accident. The choice between those options would be a moral choice, but the accident was just an event.
Yes, morality is VERY personal. And we all know it from watching the news and political stuff — a lot of things come down to morals and what peopel think on certain issues.
But mishaps could never be considered immoral. Ever. Car accident? It’s an accident. Dropping a phone? Accident. Not immoral, but accident.
Mishaps that are caused by negligence can certainly be immoral. Someone who rear-ends the car in front of them (probably) didn’t do it on purpose, but maybe they *did* make the choice to drive faster than was safe under conditions of limited visibility.
Exactly! The car accident scenario that Sarah wrote about is not analogus to her writing a check when she wasn’t sure if a deposit would get processed before the check was cashed. A better comparison would be if you see a red light ahead but decide not to hit your brakes and instead hope that the light will turn green before you reach the intersection. As it turns out, the light was still red and you ran into a car that was driving the cross-street through its green light. In that case, you knew and willingly took on the risk, so when it didn’t work out well it was your fault.
An entire article to defend yourself against one comment? Perhaps you’re being a tad sensitive?
Or possibly you feel the original comment was uncomfortably close to true.
I don’t think so. I think she’s probably not the only one who beats herself up for accidents. For instance, I’ve damaged THREE computer keyboards with liquid over the past five years, and I’m increasingly angry at myself every time. While I’m now more cautious about having liquids near a computer, the times in the past when I’ve tripped or dropped something were NOT premeditated, so there’s no guarantee that it won’t happen again, no matter how much I tell myself it’s a sign of a terrible character flaw. (Instead, I have insurance on my main work computer and have learned how to replace my netbook keyboard with cheap ones from ebay. And I don’t use Macs anymore, because the Apple store has a monopoly over repairs and won’t just replace a keyboard if they can do “diagnostics to look for internal damage and Tier III repairs” and charge you 4 figures for it.)
My point is that at some level, carelessness may be a choice, and we beat ourselves up for mistakes on that front. But saying “if I want to be a good person, I’d better stop being careless” is fairly useless – figuring out how to avoid being in similar circumstances where you are more likely to make a mistake is better, but it’s actually harder to take a logical set of precautions if you just think of it as an issue of personal will. And if there isn’t a set of precautions you can think of, might as well get over it and move on.
There’s a big difference between you and the author. Your “carelessness” doesn’t hurt anyone but you, and you’ve taken steps to insure yourself against future accidents. It’s the difference between having good car insurance and none at all. The author carelessly took a risk with someone else’s money, and took no steps to insure herself or the farmer against it. She’s damaged her phone twice, but don’t save up money for repairs. She essentially spends money she doesn’t have, then expects to be forgiven the consequences. You may act “carelessly” but you at least prepare.
Although the author may be being a tad sensitive, I think that she is addressing an important issue on many personal finance blogs: judgement and self-righteousness.
It’s such an easy thing to do, especially if we’ve been fortunate enough to avoid a similar mistake (I know it’s, unfortunately, almost a knee-jerk response for me). Apologies for highlighting this comment, but here you say:
“She’s damaged her phone twice, but doesn’t save up money for repairs. She essentially spends money she doesn’t have, then expects to be forgiven the consequences.”
I don’t think that’s a fair judgment. A judgment which, if it were made about me, would be pretty hurtful/insulting. Things break, people fall, life happens. Part of personal finance is trying to get to a secure place where we’ll always have the money for a replacement, but no one’s finances will ever be criticism-proof.
Forums like this become less productive/ helpful when filled with negativity. I’m not saying that no one should ever point out when an author isn’t taking responsibility (or that an author should be protected from all criticism), just that being polite or empathetic doesn’t have to take away from our message. There’s a lot of anger in many of these comments, especially given the fact that the check didn’t even bounce.
We all want the same thing here: to get rich slowly. Let’s try to be nice people along the way.
/steps off soapbox
This post makes me question all the advice I have received from this blog. Come on, how about some personal responsibility. Risking and losing your iphone…. Moral. Risking someone else’s money (even if it’s the banks) immoral
I have to agree with you Joseph.
The author originally wrote a blog in which she happened to mention she was worried that a check she wrote might bounce. She was taken to task by several readers who suggested some simple ways for her to never have that anxiety again; leave a cushion in her checking account or make sure her husband’s transfer has gone through before she writes checks.
Time passes. We assume she has learned a lesson from that situation. Au contraire, mon frere. It seems that she was waiting to let us know that writing a questionable check was just exactly the same as tripping over a tree root.
Seriously? This woman is being PAID to give financial advice?
I’m outta here.
I agree with Joseph and Edith. The name of this blog is ‘Get Rich Slowly’. I don’t want to read about so many other peoples mistakes and morality without useful information/ tips/ advice. If I wanted an article like this, I would happily subscribe to this person’s personal blog.
I agree. I hope GRS has a serious review about the appropriateness of this article.
I’m not buying the analogy between breaking your phone and writing a check you aren’t sure will clear. This just seems to be a long rambling justification for doing something that some GRS readers have given you grief about.
Are you sure you’re a grown woman and a mother of three? You sound like one of my brighter high school students trying to convince me that I shouldn’t penalize them for not doing their homework.
Ouch. Here’s a quote from the original article:
“I imagined what it would be like if that big check I wrote to a farmer bounced (it didn’t). They would be so upset! And it would cost them. And it would cost me. And I’d be obliged to pay their fees, too, and then I would be out a hundred bucks or something more than I planned and maybe I would have to pay my babysitter late and…
I had myself worked up, over what was unlikely to happen.”
Sounds like a thought experiment of a grown woman to me. I would argue the original article made a better connection between personal finance and difficult emotions like stress than this article attemps to make between PF and morality, however your mother comment was a real cheap shot.
The pig farmer is a small business man. I hope he didn’t pay his feed bill or buy piglets from a breeder and pay with a cheque thinking he would have money in his account because he trusted that your cheque would clear.
If his cheques then bounced he would be professionaly embarrased in his business circle, he would incur additional banking expenses and he may be asked to change the way he pays at the businesses he bounced cheques at.
I do not think it was immoral. More careless and rude. Did you expect to walk out of the Apple store with the new phone if your debit card or credit card were declined? You left the farm with a car load of pork that you didn’t pay for.
I really don’t understand the purpose of this rambling article
she has adhd as she said it describes her pretty well
But she also has an editor, right? It’s the editor’s job to make sure articles are ready for publication.
The editorial decisions here have been somewhat underwhelming of late. It certainly feels its less like a blog designed for talking about tips to get rich slowly and more a collection of personal stories and conundrums.
Sometimes I prefer not knowing how other people rationalize their decisions and this is one of those times…
Ditto other comments. “Nothing is ever yielded by judging ourselves for our screw ups.”
I disagree. Something IS gained through the process. But I would encourage you by offering that you don’t have to define it in harmful terms. You hate being thought of as “immoral.” When you evaluate your mistakes; when you seek to learn how they happened and how to prevent their future recurrence, use other language.
But I would further argue that this kind of pain can be useful, too. I live with the fact that I am a sinner (saved by grace). I make terrible choices and mistakes regularly. I strive to be better. You can, too. But you won’t get better by minimizing, dismissing, and rationalizing them away.
Embrace it. Drink deeply the medicine as you seek a cure. Bitter, sure, but helpful and worthwhile.
finally a new and interesting topic 🙂
You didn’t intend to bounce the check, and i think you were reasonable to think that you wouldn’t. There is risk in the world after all. You were not immoral.
What was the agreement between you and the farmer? The deposit must have been there for a reason. Would you forfeit it if you chose not to buy? Since there was no delivery date set, i think it is important whether or not you knew in advance that the seller was unable to store the product once it was ready for delivery.
The agreement you had with your friends is less formal, more vague, less enforcable, but certainly more problematic if you would have been unable to complete the purchase. Who would have lost the deposit, just you or all of you?
I’d love to read a lawyers interpretation of this situation.
I’m really not a fan of this article, and its a representation of the poor quality control that’s come to GRS.
Previous posts have pointed out that for something to be moral or immoral, it must be a decision. You must be the locus of control. Kant, Socrates and Bentham would all agree with that.
More subtly – morality generaly regards how your actions treat other people. (Sure, Socrates would say that you will treat people well by being a good dude, so it is a side effect — and Kant would say you treat people well as a moral principle because you could not, in principle, say that people should always not be treated well. I digress.)
Falling over has nothing to do with morality. Deciding to buy a phone you can’t afford and justify it as a “necessity” that wasn’t needed even in the 80s might be — it effect the economic long-term welfare of you, your kids, and any spouse.
Writing a bad check to a small businessman, and putting his continued business in danger such that YOU don’t suffer the embarrassment of asking your friends for their share of the money up front? That’s selfish.
Justifying your poor behavior in a blog thread, to get others to do similar behaviors? Immoral.
The check thing wasn’t entirely one-sided – the farmer said, “come get and pay for the pig earlier than you expected to have to be ready”! Yes, it’s a small business, but a large business could get a pretty bad reputation for, say, auto-deducting a payment a week early. I agree that she could’ve asked the friends for money up front (and you know? they might’ve said no), or said, “look, since this is early I’m waiting on some deposits, so please wait to cash the check if possible.” But it’s a weird situation that isn’t entirely her fault either.
So, in this case simply saying “i wasnt prepared to pay you until XX. Can I write you a check in a week?” would suffice nicely.
I fail to see how its a problem if a business delivers a product early. Early delivery shouldn’t justify bounced checks…
The more I think about it, the more I think moral problems happen when we don’t treat other people as, well, people.
As much as I hate to quote Kant, he does hold that in our actions we should treat others as ends in themselves, and not as mere means.
In the pig example, Sarah treated the farmer as a mere means to an end — getting a pig to impress her friends.
And so much of those violations seem to happen through a lack of honesty. If Sarah had been honest with the farmer, or her friends, or herself, she’d know not to write a bad check, be the one responsible for the pig, or post this on a blog about getting rich slowly.
There were a lot of options available that give more of Sarah’s privately held information to the people in the transaction — the farmer, her friends, her bank. If she’d done any of these, she wouldn’t need to rationalize writing a bad check.
Yes, get a cash cushion. It seems incredibly stressful to have to juggle all those balls and what-if scenarios.
You’re buying the pork from a farmer who is “living every ideal you believe in” (why this matters in this context, I don’t know). We’re reading an article written by someone who doesn’t have quite the same ideals that some of us have: patience, security…
The nice thing about embodying ideals is that you don’t really need “rules” to guide your behavior anymore, it comes naturally. But start with rules, and maybe the ideals will come in time.
I really liked the last section of the article. Possibly because lately I’ve been working on releasing negative emotions in my “personal work.” Not because the other person (say the driver who cut me off) inherently deserves forgiveness, but because holding on to that negative energy (that a@##$@#) is bad for ME (increases stress hormones)
And with how I read this post, it wasn’t about the morality of bouncing checks–the author is pretty sure it’s wrong. The article seems to be about admitting a mistake and moving on. After all, there seems an equal chance that the check would NOT bounce and that the stress she put herself through was pointless.
People think of writing a bad check as immoral not only because of the element of choice but because it affects someone else (unlike breaking your iPhone). Banks charge their customers fees when a check they deposit bounces, to say nothing of the fact that that farmer might have been depending on it to pay his bills that day. People we write checks to generally operate on smaller margins than other people we deal with.
Conversely, when you – say – overdraft your checking account with your debit card, the bank doesn’t have any trouble covering you and charge you a fee for their trouble. So dumb mistake, but not one that hurts anyone other than you. That’s the morality difference.
Don’t get me wrong – writing a check that bounces isn’t like slaughtering a puppy dog or anything. But it is something to avoid because it has the potential to screw other people over.
Seriously, this is a post on Get rich slowly? The way to get rich involves planing, wise decisions, and patience. Non of these things are involved when bouncing a check. Like others have said it is a decision, an accident is not a decision.
Shame exists for a reason and shouldn’t be avoided at all costs. You need to learn to balance shame (which is there to teach you to act differently in the future) with self-forgiveness. From your writing, I think you’re trying to avoid the former and not learn from it. Justifying shameful behaviour isn’t mature. Admitting to your mistake, feeling the shame and moving on is.
I don’t think everyone who reads and writes here shares the exact same values, though we more or less share some goals. The whole “do what works for you” is grounded on that premise.
However, I personally think giving the farmer a check you’re not 100% sure will clear is unfair because while you might be doing it with your eyes open, the farmer isn’t.
Not saying that you’re trying to scam the guy, or that if your check bounces you won’t compensate him for the annoyance and expense. I’m sure you would. But he didn’t agree to share the risk of an iffy check in the first place. Of course running a business is inherently risky–but why pile it on?
One immediate way to diminish that risk could be to give the farmer a post-dated check and say “hey, would you mind cashing that after tomorrow?” (or whenever the funds will be available). The farmer isn’t obligated to do that, he could try cashing the check that same day, but at least he’d have his eyes open too.
Another option would be to pay the farmer with cash, having collected said cash from the partaking friends, eliminating all that funds-clearing mess.
However, a cash cushion is the best way to generally avoid this type of close calls with bounced checks. Since setting up my emergency fund I’ve used it to float money into and out of checking whenever an unexpected situation comes up. Yes, it’s not in a glass frame like Dave Ramsey commands, but it’s my money and it works for me.
Lastly, putting the money aside in advance is my preferred way to deal with large purchases. Just like buying a big TV or a computer, a $900 pig is worth putting money aside in advance.
Now, I’ll just say– I’m neither in love with safety, nor a wise and prudent person, I don’t have a plan for 50 years from now and I’m terribly impatient due to my ADHD nature (you should see me going nuts whenever I have to wait in line, its like I’m being attacked by invisible fleas).
However: I originally came to read GRS because I got myself into a financial mess and I was trying to get out of it, so I’m not holier than anyone. I just have learned a few things, and knowing how I am, and what can happen with it, I try to set up systems that compensate for my seat-of-the-pants nature. This reduces the chances of hurting myself or others.
http://add.about.com/od/adhdinadults/a/add-risky-behav.htm
http://www.healthcentral.com/adhd/adult-adhd-251516-5.html
I beg to differ, Nerdo. I do think you are wise and I do think you are patient. Your management in the writing of your comment proves this. I wouldn’t have been as subtle or careful. Like I said, I have a husband with ADHD (Strattera is working well for him) and it is one of those things that I have appreciated your openness and honesty about. Now, if Sara would just look into it further, the benefits are there for her taking.
I was given a Strattera prescription and refused it, as I am prejudiced against amphetamines. That may be unwise, but I’m willing to own my stupidities.
What I did instead was get some ADHD coaching with a therapist though, plus my own research, and it works.
By the way– the iPhone is GREAT GREAT GREAT for my ADHD — it beeps and reminds me all day of what I have to do, where I have to be, things I need to bring to meetings, etc. This is not an ad, I own no Apple stock, but it’s the best PDA I’ve ever owned.
Ha! This isn’t a Strattera ad, I promise. It’s a non-stimulant. That’s why he decided to go in that direction. It’s a norepinephrine reuptake inhibitor. He also uses many strategies as I’m sure are akin to what you do. Regardless, I really appreciate your approach and am amazed with your self-directed will power! The side effects of these meds can be rather scary and many stop for those reasons alone. Anyway…enough on that. Have a good one.
Yea…I’m not sure where you’re going with this post. Sounds like you’re trying to justify fixing your iphone. Go fix it, try to be more careful. Then look up the definition of morality on your new iphone.
This article is nonsense. Next time pay for your pig in advance with a cashier’s check if you’re not sure you’ll have money when you need it. Bouncing a check to pay for a pig is the equivalent of taking money and promising a pig in exchange, but then not delivering a pig. Breaking your phone is not the same. Getting in a car accident is not the same *unless you don’t pay for the damage you caused*.
I don’t think bouncing a check would have made you an awful person. I do think the reasoning in this article is baseless.
I agree with previous posters in that the element of choice is the factor determining whether an action was immoral or simply an accident.
I’m confused about why the choice to write the $900 without confidence of funds to back it was necessary. It seems like the whole situation could be avoided with additional planning.
First, why not approach the friends who agreed to partner in the pig purchase. Explaining to them that the payment was due and because of the late payment of the contract work, the full amount was not available is one alternative.
Another option might be to ask the husband to transfer the grocery funds a few days earlier than usual. This might not work if the husband’s account operates on a tight margin. Or if the pig farmer gave short notice in the amount and pick up date.
Finally, the third choice that could have been made is be honest with the pig farmer. Tell the farmer that since the actual cost was higher than the estimate, you don’t have the funds available. Offer to pay what you have and make a second payment of the balance once you receive the balance. If this is not acceptable to the farmer, the farmer has the option to sell to another buyer or find a way to hold the meat until your payment is available. Putting the onus on the farmer for changing the terms of the agreement is more honest and moral than crossing your fingers and hoping the check clears.
With the number of alternative options, it seems that the logical reason for floating the check is to avoid admitting (to your friends or the farmer) that $900 is not in your pocket. In other word, my interpretation is that ego was the motivating factor for writing a potentially hot check.
In addition to the other comments, you really don’t need the iPhone if you can’t afford it. Sure it makes some things convenient, and you make a compelling case for enjoying a convenient life. But scheduling, selling, taking notes… people have successfully completed these tasks accurately and efficiently long before the advent of the iPhone.
Bad rationalization is bad rationalization, and failure to learn will lead to more trouble.
Kiting checks is against the law – just saying.
I had no idea what check kiting was so I looked it up and I believe that’s not what Sarah is doing– kiting involves purposefully circulating bad checks through multiple accounts in order to make it appear one has a higher balance. This article here makes the distinction:
http://www.bankersonline.com/articles/sfpv01n02/sfpv01n02a9.html
The article written by an FBI agent. It starts with this:
Yes, Sarah may be playing it close to the foul line, but she’s not a criminal maliciously attempting to defraud anyone. If that’s the line of criticism against her, I can’t possibly agree.
I think the criticism is that this article is a TERRIBLE personal finance advice and not really a good way of responding to a comment, and furthermore attracting negative attention from GRS audience, the majority of which didn’t really notice the previous comment about the checks like myself and NOW I do know about it and it has made no difference to my life and personal finance.
Hopefully we see less of these articles and more useful ones.
I haven’t had a chance to mull through all the comments yet, but am currious about the morality of letting your house go into forclosure. A planned forclosure due to being “underwater”. In my case I bought more than I could afford at the peak of the market and now find myself still owing more than 50k than what the house is worth. The house is a money pit and will take years before what I owe matches up to what I can sell it for. I can probably forget about getting what I paid for it. My orriginal plan is to be out of the house in the next year and am contiplating letting it go into forclosure, and banking the money. Any thoughts on this.
This is called “strategic default” and has been written about online to great lengths. Most of the GRS audience will think you are a bad person if you try it. Many other people have already done it and it essentially costs you nothing but your credit score. Whether you want to do it or not is up to you, you would be far from the first one to do it.
Here’s my take:
Accepting the agreed-upon consequences of breaking a contract is not immoral. It’s playing by the rules, not lying or cheating in any way.
But if you’re doing something deceitful to get out of the agreed-upon consequences – hiding assets to prevent the bank from coming after you for the balance of a recourse loan, for example – that would be immoral.
And the question of whether strategic default is moral or immoral is completely separate from the question of whether it’s a good idea. To figure out whether it’s a good idea in your case, you should talk to a lawyer.
I actually think car ‘accidents’ are immoral. One little mistake with your checkbook costs you and your victim fees and inconvenience. One little mistake jogging costs you a few bruises and an iphone. One little mistake in your 2 ton steel brick could cost someone their life. Sun in your eyes? SLOW DOWN.
Actually, I chuckle and shake my head at the people who scream about the ‘immorality’ of bounced checks and bankruptcy. Yeah, if someone does it on purpose they’re a jerk. Otherwise crap happens. Deal with it. (And get some bigger problems! jeez!)
You’re implying all car accidents are avoidable…which is simply not true. You must be the only one who stops at the closest walgreens when you forget your sunglasses, or motel 6 when you’re too sleepy to drive.
Well, Greg, I carry spare sunglasses in my cars. If I find that those are missing, I go home and get them or buy another pair. I don’t drive when I am tired. I slow down when it is called for. I pull over to make phone calls. Every single time I get in my car I stop and remind myself that I have my life, my passenger’s lives and the life and health of every single person I share the road with in my hands.
To do otherwise is indeed immoral. And I really hope to never share the road with you!
Wait until a deer jumps out in front of you.
I think that far too often, people mistake carelessness for accidents. While there are actual accidents, my experience has been that most “accidents” are actually preventable if people would just take a little care and responsibility beforehand. If I’m falling asleep at the wheel and I cause a car wreck, that was not an accident. I knew I was tired. I chose to keep driving anyway. I took the risk.
Everything in life comes with some inherent degree of risk. That doesn’t mean that when things go wrong, it wasn’t an accident.
Sure, it is more responsible to minimize risk, but even a slightly elevated risk may still be reasonably deemed acceptable. You don’t stay home from work every time it rains, do you? Even though that makes the roads slipperier? And you still drive at all, right? Wouldn’t it be safer to give it up entirely?
There is no hard-and-fast cutoff for when you’ve crossed the line from reasonable to unacceptable risk, and, “everything *I* do is reasonable, everyone riskier than I is unacceptable, everyone less risky than I is overly cautious,” is not a real metric, even though it’s how most people seem to operate.
Driving is much, much safer than thousands of different things people have done throughout the course of history, and those people all deemed their activities to be worth the risk. This includes everything from working in 19th century factories, to emigrating across oceans on wooden boats with no engines, to fishing in Alaska.
Things can always be safer than they are. That doesn’t mean you need to blame the victim if anything ever goes wrong because he wasn’t acting safely enough.
Is this really a post on a blog called “Get Rich Slowly”? Because I guarantee you that the way to get rich slowly is not to be living so close to the overdraft that you’re buying things you’re not 100% sure you can pay for. The morality of personal finance is exceptionally simple: live within your means, and be certain that you are not taking what isn’t yours. If you weren’t 110% sure you wrote a good check, then you took something that wasn’t yours. Not having enough in your account isn’t a mistake, it’s poor planning. If you’re having this much trouble with your money, then you shouldn’t be writing for this blog.
Your appeal to be compassionate and forgiving of financial mistakes in others does resonate with me–I can’t count how many times I heard my mom tell someone not to cash a check until the next day. However, comparing a potential check bounce to a running or car accident is a logical fallacy and obscures the issues here.
Can’t you just link a credit card to your checking account so that overages get billed to the card? This has got to be cheaper than bouncing a check. My first option would be the cash cushion in the account, but I realize that does not work for everyone. We all have our faults or weaknesses, it’s about knowing yourself, what works for you and having faults you can live with. (My weakness is being late for everything, I need a time cushion, but it never happens)
I just started subscribing to this blog and now I’m perplexed. How is an entire article justifying check kiting and carelessness anything but the OPPOSITE of financial responsibility? I want to give this blog a chance, but if this is what it’s about, that’s help I don’t need.
Have a good look through the archives, back when J.D. owned the blog. That’s where the most interesting stuff is. There are still some good writers on here, but the focus is not what it was. Maybe it will turn around and find itself again. Or maybe not.
Writing a check for an amount not yet in your account and hoping that money is there when it cashes is generally called ‘floating’ a check. While the morality of it can be up to you (some think that robbery is not immoral), the law is clear; check floating is illegal.
And an occasional accidental check bouncing is not the same as intentionally writing a check that may or may not go through.
For a blog that embraces personal responsibility, this piece is very disappointing. The responsible thing to do when you don’t have the funds is to work something out with the party whom you are paying or to ask a friend to cover an extra $50 of that pork. Most small businesses don’t want the extra fees that your bounced check incurs on them and would likely just allow you to pay the rest next week or paycheck if you only ask…
Talk about rationalizing bad choices. Until you take responsibility for your actions, rather than chocking something completely preventable to to an “accident”, you will likely never find yourself in a truly comfortable financial situation.
I’m disappointed the GRS even published an article that is so contrary to good fiscal discipline. If the author wants to continue to delude herself about how she’s just a victim of “accidents”, that’s her issue. But for the blog to offer this under the guise of fiscal advice? Wrong turn. I hope that the owners reconsider using Sarah for future pieces as she clearly isn’t a good fit for a blog about sound financial choices, or, at the very least they more carefully vet her pieces.
I see no valid analogy between writing bad checks and falling down and breaking your own phone.
THe difference here is that you intentionally and knowingly wrote checks with insufficient funds.
Sure, you didn’t mean to run out of money and you hoped they’d all clear. But you were fully aware that you couldn’t cover all your checks at the time they were written and you intentionally and purposefully wrote them taking the risk that they wouldn’t all clear.
You didn’t knowingly or intentionally fall down and break your phone, your friend didn’t intentionally get blinded by the sun.
Taking a risk and having it go wrong is not the same as having an accident.
Plus the impact of your check writing hurts someone else. Your accidental phone breakage hurts only you.
Plus society has already decided this via law:
Writing bad checks is illegal. Dropping your iphone isn’t illegal.
Oh, I get it! The joke’s on us – this is one of those ‘what not to do’ articles!
Yeah, I agree with the majority here. “Morality” can be a very vague term. But I think comparing writing a possibly bad check and tripping over a tree is not valid. If your check had bounced, you could have financially impacted the farmer (unless he made better decisions in his finances and had some cushion on his account to cover situations like this.) Just asking him when you gave him the check if he could hold onto it for a day or two would have made such a difference in my opinion.
Sarah, I appreciate your sentiments and it’s unfortunate that the criticism directed at you has affected how you see yourself. I think that’s where the problem lies. You’re letting the mean-spirited, negative, and sometimes vicious comments that some people make on this blog to affect your view of yourself.
It’s important to support your own opinion of what you do and what goes on in your life. It doesn’t mean you never change and grow and see the mistakes you may have made. But it does mean you don’t attack and blame yourself for what you feel is right.
This blog has been helpful for me. Some of the articles and posts have helped me in saving money. But virtually NONE of the nasty posts have helped me in the least, and I simply pass them over. Some people are truly troubled, and may use posts like yours to try to make you feel as worthless as possible. The point for them is not to ENLIGHTEN, it’s to ATTACK. It seems to make them feel better, especially when they do it as a group. Think of the worst clique in, say, high school–or even middle school. That’s the maturity level we’re often dealing with here. Extremely toxic. What is even sadder is that some of the same people are actually PARENTS, and I think, TEACHERS, which is frightening. What kind of example are they actually setting?
One of the best lessons I learned when my children were younq, was that compassion, caring, support and limits, were worth their weight in gold as far as they (and the friends they brought home) were concerned. It never helped to make them feel worse. NEVER.
My hope is that you’ll surround yourself with supportive people who offer CONSTRUCTIVE feedback. I like your posts and hope you’ll continue writing–if not here, then somewhere where I’ll get the chance to follow your journey. Wishing you the best!
The level of self-righteousness in many of these responses is breathtaking.
So, did the check actually bounce?
I’m sure we all have different comfort levels when it comes to financal risk, but for me, the idea of kiting a check, at its core, is one of the biggest, aka worst, risks I can think of… there’s the risk, no matter how small, that I might not have enough money to cover a promise to pay someone, AND there’s the risk that I’ll be considered untrustworthy (not immoral) by those I admire.
??!? I’m not really sure what the point of this article is? It feels more like the author should have simply commented back on her POV after the initial comment because this doesn’t have anything to do with personal finance and morality. I think we all agree that humans do err and make mistakes.
As to the original comment about being immoral, while the word choice may be off, the commentor was merely attempting to distinguish between accidents and intentional decisions where another person also bears the risk. In the decision to write a check to the pig farmer, knowing you may or may not be able to cover the check, you transferred the risk to the pig farmer and likely without telling the pig farmer. (Unless you said, “Here is my check, but give it 3 days to make sure it clears.”) The problem with this is IF it bounced, the pig farmer would think he had $900 in the bank and it takes 2 weeks or more to find out a check you deposited bounced. Thus, pig farmer may have suddenly had $900 less and had to go even longer before he actually the money back. That is completely different from an accident where you fall and damage your own stuff. And it is different from a car accident.
If you want a better analogy, the $900 check would be like a car accident where you loaded up you car so full that you can’t see out the rear window. And, although you know you have blind spots, especially with the rear window blocked, you back up onto a busy street anyway, not asking somebody to make sure you are clear. You know there are risks that another person will bear the cost of your decision but you act anyway because you figure it’s late and unlikely that somebody will be coming by at that exact time.
This article feels so self-serving, and so defensive. It is a whole article dedicated to responding to a commentor that said you messed up. If you don’t want to be judged, why do you publicly write? We judge and evaluate our own behavior, the behavior of others, the world we live in–what do we NOT judge and evaluate? If you ask people to stop judging and evaluating, people will stay static–which is the opposite goal of this site. We shouldn’t determine a person is evil because he or she made a decision that wasn’t right, but that’s a concept that we all get.
It really seems that you simply didn’t like the word choice of a person who commented and are attempting to convert that disagreement in terminology/vocabulary into an entire post about how you didn’t mess up at all.
Morality is a tricky subject. I might consider bouncing a check borderline depending on one’s intent and the harm caused to someone who did not agree to take the risk. If something like that happens, I think it can be a good learning experience for future planning. Money could be pooled from friends and the farmer could be paid in advance, for instance. But stuff does happen and most of us have been there at one time or another, if not with money, then with other resources.
I don’t consider bankruptcy immoral unless someone intentionally borrows a lot of money with the intent of going bankrupt. As a student of the Bible, I have read that when God created a government, all the people in the country were to go bankrupt every seven years and every forty-nine years, real estate was to revert back to the family to whom it was originally allotted.
Both things essentially reset the economy and kept things from getting too out of balance. I believe our bankruptcy laws were intended to do something similar and I don’t think that’s a bad thing.
Also, if a poor borrower left his cloak with a lender as collateral, it was the lender’s responsibility to return the borrower’s cloak to him every evening in case he did not have any other blankets and would be cold at night without it. People don’t talk much about that kind of thing, which I find curious.
Come again?
The responses on this site seem to get a little rowdy, “self-righteous and unforgiving”, I think, when many in the very astute audience sense something is amiss with the author’s self awareness or the way they present their sense of personal responsibility. The only other time I’ve seen these “crazy” outbursts from the audience is with the writer, Honey Smith.
While it’s not pleasant to read negative comments, I think these ganging-up-on comments happen as a red-flag that something doesn’t sound right in the article. In the end, I’m sure we all want the best for Sarah, even if our screaming tactic is quite annoying, rude and deafening– we could behave better.
Another great headline, another wasted opportunity.
If we’re talking morality and personal finance, let’s talk about walking out on a house that’s underwater, even though you can still afford it. Moral or not? If you think it’s immoral, and choose to do the moral thing, then how much are your morals costing you?
In the same lines, could talk about bankruptcy. Many well-off people have no problems filing bankruptcy on one of their businesses (which is always structured to lower the personal liability to virtually nil); so how much is the average joe’s morality costing him when he’s drowning in debt but chooses not to take the “easy” way out? What is it costing him in terms of providing for his family, helping his kids with college expenses, retirement?
Could touch on other things such as “borrowing” from Wal-Mart courtesy of their 90-day return policy, downloading movies/shows illegally, not trying to find the owner of the envelope with $10k in it, etc.
But instead, we get an article about how we either have to agree that writing a possibly bad check is NOT immoral, or that tripping on a tree root IS immoral. Um, what? I am curious if the writer had overdraft protection on her account, because if so…then technically the check could not have been bad (had the account become overdrawn, the bank would have “lent” the funds, possibly at a very usurious rate). Making the entire argument moot. Ooh, maybe that’ll be the next article? “All you haters, I had overdraft protection, so suck it!” Nah, surely GRS isn’t spiraling downward, where the new owners are only interested in a quick buck (and articles that get people riled up, and cause a brief spike in viewers, are the order of the day).
Making a mistake is simply making a mistake. I bounced a check once when I was younger and wasn’t smart or rich enough to keep a nice cash buffer in my account. I was late for a bill last year because the bill got lost in the mail. These were accidents. As soon as I realized what happened, I got on the phone and corrected the problem.
But there’s a lot of people out there who bounce checks intentionally. It’s not a one time occurrence. It’s a “lets see if I Can stick it to the man” mindset. This is indeed immoral.
And we can look though the world of personal finance to find lots of other immoral activities. Like a friend of mine who buys something, uses it once, and then returns it. Or people who intentionally default on their mortgage even though the can make the payments.
Isn’t it ironic that we just ourselves by our intentions and others by their actions. We need more people to be responsible for their actions.
I never thought of that before Ted. Nice distinction between intention and action.
I feel like I identify with you a lot… I love running, but I love it more when I have an extensive spreadsheet showing my mileage and my workouts.
People ask me if I am ADHD because I get super enthusiastic about new ideas.
I also break personal finance rules all the time, but I strive to have some sort of goal and guidance and route to take to make things better.
🙂
I have never met a person who has never made a mistake in their life.
We all make mistakes and screw up, it’s natural. But sometimes we’re even better off than before making the mistake if we learn something substantial in the process.
Alice
Clearly, the tripping and breaking your phone is not a moral issue. It was an accident and we all have them.
I can see how someone might make the argument that the potentially bounced check could be a moral issue. But, it sounds like there were a lot of variables in the situation which makes it more of an accident in my opinion. No set amount of money needed, no specific time frame …. but, I also assume you gave little or no reason to the farmer to think you couldn’t pay on commmand. Eh, I think you’re fine here but it’s definitely a good object lesson about keeping more padding in your account and getting more details on transactions.
As for bankruptcies. Well, the devil is in the details. One of my good friends declared bankruptcy – almost entirely because of consumer debt and an ex-husband who would not pay the bills post divorce. On one hand, it’s not her fault he was tanking her credit at the same time he wasn’t paying his court-ordered share of the debt. On the other hand, why the heck did they rack up so much consumer debt in the first place (vehicles, motorcycles, four wheelers, leather furniture, home renovations, trips, clothes, etc)? So …. kind of immoral to get so far into debt, KNOWING that you can’t pay it all back. And, the kicker – once the bankruptcy and all the debt was discharged, she continued to buy more bikes and stuff. SMH Is that immoral? Eh, I suppose so. I can’t blame a person for thinking their debt was under control with 2 incomes, because you make decisions based on current intel but it was still irresponsible.
But, I agree with Liz Pulliam Weston. If it takes you longer to repay your debt than your credit score would be impacted by a bankruptcy, then file. If it takes less, then pay.
Well, I could replace the screen on your phone for $95 and you would save $75, making the phone drop a little less immoral! 🙂