Are These Smart Guys Making Dumb Money Moves?
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CBS' No. 1 hit show, "The Big Bang Theory," has reached a stratosphere of popularity not many shows achieve. What originally began as a show about three California Institute of Technology physicists (and one engineer, Howard, who has his master's from the Massachusetts Institute of Technology) and a quirky "actress" neighbor, has progressed into a full cast surrounding a love of science and odd friendship. While the show has evolved, one thing is still a constant: None of the characters are very smart about their money.
Personal finance experts Ellie Kay and Steve Repak, who love the show and watch it regularly, agree. "These guys have grand plans and goals for their work, but they never have a money plan," says Kay, family finance expert and author of "The 60-Minute Money Workout." Repak, a professional speaker and author of "Dollars and Uncommon Sense" agrees, saying, "It doesn't take a Ph.D. to figure out that you'll have more money if you earn interest on it."
Our experts say the show would still be funny if the characters used their mathematical genius on their money, too. Here they weigh in on various scenes where the characters make less-than-brilliant money moves and what they should have done.
Sheldon Uses 46% of Income, Where's the Rest?
Sheldon: I don't see any large upcoming expenditures unless they develop an affordable technology to fuse my skeleton with adamantium like Wolverine.
Whatever the ratio of living expenses to income, most experts agree that a worthy savings goal should represent 10 percent of income. But Sheldon only has a "small savings account."
Kay: Because Sheldon shares the rent with Leonard and lives well below his means, without a car and its related expenses, he should save much more. His money should, at least, be in a bank (money market account) savings account or tied up in a (certificate of deposit) ladder to take advantage of any future rate changes. What if the guys invested their extra money in property and owned condos across the hall from each other or all pitched in together to buy a house instead of throwing away money on rent?
Repak: The guys never mention giving or sharing their wealth with anyone. I also advise allocating another 10% of income for giving because you help others and learn to spend less at the same time.
Does Penny Need Debt Counseling?
Penny: You know, sometimes when I'm feeling all stressed out about something, I go out and buy a cute top or a fun skirt, and I have a whole new outlook on life.
Sheldon: Don't you eventually realize you're just the same stressed-out person in a cute top or a fun skirt?
Penny: Yep, that's when I buy shoes.
According to The Shulman Center for Compulsive Theft, Spending and Hoarding, shopaholics buy to relieve anxiety, but over time the buying creates an increasingly dysfunctional lifestyle.
Kay: Penny should cut up her credit cards and go to her local National Foundation for Credit Counseling office (NFCC.org) to see a nonprofit consumer credit counselor to help get her finances on track and get on a repayment plan she can afford. The way she lives is so dangerous because she has zero emergency fund. (Remember when she couldn't pay her rent because her car broke down and she was hiding from the landlord, so she borrowed the money from Sheldon?)
Repak: Penny needs to get her priorities straight, which are paying her rent, electric bill and food before shoes and clothes. Period.
Let Bernadette be Bossy With Joint Account?
Howard: Yes, but we're married now. That means when you get sick, I take care of you, and when you make a bunch of money, I get to buy stuff. Sorry if you don't like it, but that's how love works.
Bernadette: No, here's how love works. You're gonna return the machine, or you can print out a working set of lady parts and sleep with those.
A recent study titled "The Role of Money Arguments in Marriage," published in the Journal of Family and Economic Issues, found that money arguments are an important indicator of relationship satisfaction -- but not divorce! -- and can be used to strengthen the relationship with financial or marriage counseling.
Kay: Bernadette was rightly frustrated, but it's condescending to get "punished" for spending by your spouse. I recommend meeting with a third party (such as a financial counselor) to teach them how to handle the joint checking account.
Repak: Just because one partner makes more money doesn't mean he or she gets to make all the rules. Howard needs a separate spending account that they budget for together or with a financial counselor. But then Bernadette can't be judgmental on his spending from that account.
How Much Should the Guys Spend on Comics?
Sheldon: You boys may have had gelato with Stan Lee and gotten autographed comics, but I saw the inside of his house and got an autographed application for a restraining order.
Howard (sarcastically): Sweet.
Sheldon: Plus, I get to hang out with him again -- at the hearing. This is going to look great hanging next to my restraining order from Leonard Nimoy.
The guys think their comic book collections are a valuable investment. Remember when Sheldon bet his "Flash of Two Worlds" and Howard bet his "Fantastic Four" No. 48 comic book on what species the cricket was? After Sheldon lost the bet, he went to his safe deposit box to get his comic because it held so much value to him.
Kay: The comic book collection is only as valuable as what the market pays cold hard cash for, and we've never seen them get cash for them. Instead, comic books are completely legit entertainment as long as it's factored into the travel and entertainment budget and they are not overspending on it.
Repak: I advise spending 5 (percent) to 10% of their income on their interests because they do work hard, and life should be fun, too.
Should Penny Keep Taking Those Acting Lessons?
Leonard: (Helping Penny cut expenses) $170 for acting classes?
Penny: Oh no, I can't give up my acting classes, I'm a professional actress.
Leonard: Oh, you've had an acting job where you got paid?
Penny: That is not the definition of professional.
Americans are digging out of the overspending habit, and so should Penny. In 2012, the Bureau of Economic Analysis reported that disposable personal income outpaced personal expenditures resulting in some savings.
Repak: People with financial problems have an entitlement attitude. If Penny can't pay for rent, food, electricity and Wi-Fi (Sheldon keeps changing the Wi-Fi password as a result. Currently it's: Penny already eats our food she can pay for Wi-Fi. No spaces, of course.), then she shouldn't spend on acting classes, takeout or shoes. People say they can't cut expenses, but they just won't change their priorities.
Kay: Penny is a minimum-wage earner living paycheck to paycheck. She's doesn't make much money and could qualify for financial aid, which would allow her to take community college certification classes. These could help get her earning better wages sooner. The guys would love to see her do something more than just waitressing. (Remember when she took a class, and Leonard was so thrilled, he wanted to rewrite her paper?)
How Big is the Guys' 'Latte Factor'?
Sheldon: (Sheldon drops into his couch spot) No. No, this isn't right. No, our food always comes in Szechuan Palace containers.
Leonard: Yeah, well before they went out of business, I bought 4,000 containers. I keep them in the trunk of my car.
Research from The Boston Consulting Group found that the guys are not alone in how they spend on takeout: Millennials (ages 16 to 34) eat out 3.4 times per week and are more likely than other groups to get food to go and eat with friends.
Repak: I think food should represent 10 (percent) to 15% of their income, so if they are overspending that on the takeout food, plus eating out, plus stocking the fridge, they should dial it back.
Kay: The guys don't even try to save money by using coupons to get discounts at their favorite restaurants since they go to the same places each week. It would be just as fun if they took turns pairing up to cook home dinners for everyone. (Remember when Pria and Raj cooked and invited everybody over for chili and margaritas?) This way, they could all easily cut what they are spending on food in half.
Should You Keep Money in a Snake Nut Can?
Sheldon:You know, it occurs to me you could solve all your problems by obtaining more money. (Opening a can of trick peanut brittle with popping snakes from which he pulls out a pile of money he holds out to Penny.) Here. Take some. Pay me back when you can.
Penny: That's a lot of money.
Sheldon: That's why it's guarded by snakes.
Penny needed the money from Sheldon because she'd loaned her money to her muscular ex-boyfriend Kurt, who didn't pay her back. When Leonard finds out why she needed the money, he visits Kurt to get her money back. Only instead of the money, Leonard returns with "I owe Penny $1,800, Kurt" written in permanent ink on his forehead.
Kay: Don't lend money you need within six months. Also, Sheldon set a precedent that he would lend money, pay for meals and pay for Wi-Fi, and a circle of friends or family can grow to expect that. But, as a fellow California resident, I do recommend keeping (fire- and thief-safe) cash as part of an emergency kit for earthquakes, fires, hurricanes and tornadoes.
Repak: While borrowing from friends or family is better than borrowing from a bank and especially those high-interest payday loans, only lend money if you're fine with never getting it back.