View Full Version : Another brilliant display of financial responsibility
ZERO THEORY
01-16-2014, 22:39
http://finance.yahoo.com/blogs/daily-ticker/i-earn-six-figures-and-still-feel-broke-215546862.html
It was 2010, three years after he and his wife bought their first home in the San Francisco Bay area and had just welcomed their first son. Omega was taking home close to $6,000 a month (after taxes), and yet they were still overdrafting their bank accounts. Debt collectors were constantly calling. Each month, his $3,000 mortgage bill brought another wave of terror and yet their loan servicer told them they earned too much to qualify for a loan modification. He felt poorer now that he was earning six figures than he had scraping by on the $33,000 he was making out of college.
“Something just didn’t click,” Omega told us. “[My wife and I] felt that our income should be OK but we didn’t feel comfortable. It was like panic mode all the time.”
Grudgingly, they sat down together and brought out the calculator. Even before factoring in their mortgage, the couple owed nearly $190,000 – $168,000 worth of student, home equity, and 401(k) loans, plus another $20,000 on credit cards.Yeah.
It's not hard.....don't spend more than you bring in!
ChunkyMonkey
01-16-2014, 22:47
Sadly, the education system in this country is lack of real financial literacy. Hech even those who understands still gives in to costly impulse decision.
Sharpienads
01-16-2014, 22:55
Mrs. Sharpienads and I just started our total money makeover this month. I have to say, having a written budget and using the envelope system feels good. We're not hurting for money by any means, and it is absolutely frustrating how much money we've wasted over the years, especially when we were both working.
nathan0259
01-16-2014, 22:56
It's not hard.....don't spend more than you bring in!
Its hard cause everyone else has nice things and I deserve them to... and be for you ask Hellllll Nooo I'm not going to work hard or save for them.
[Sarcasm2]
Sadly, the education system in this country is lack of real financial literacy. Hech even those who understands still gives in to costly impulse decision.
This is what gets me all the time.
Aloha_Shooter
01-16-2014, 23:39
Why should the educational system have to teach financial literacy? How fscking hard is it to understand, don't spend more than you take in, don't take out extraneous loans, especially just to feed a "lifestyle"? What really pisses me off is that those of us brought up with and practicing stereotypical Scot/Jewish/Yankee/Chinese/whatever thriftiness are having to pay to bail out those who lived the high life on credit.
I feel really sorry for them....NOT
Great-Kazoo
01-17-2014, 00:07
It's part entitlement mentality and fiscal responsibility. A shit load of people believe any and everything they are told. I see you have a 790 credit score, factor in the 15% down payment you have , yep you can afford a $500 monthly car payment. OR $1500 house payment.
They want to believe it because they don't want to accept the reality of living beyond their means. No cash, no problem, i'll use my credit card. I only pay the $25 a month the cc company says is due. I mean REALLY who has an extra $300 laying around.
People use their debit or cc to buy a gallon of milk!. Then fill the tank up, hit some over priced place for a $1.00 coffee that cost $3-4.?? Grab coke or pepsi while there. By the time they get home $30-75 has been spent, without even breaking a sweat.
funkymonkey1111
01-17-2014, 07:49
http://www.youtube.com/watch?v=QzE76nUSjL8&noredirect=1
blacklabel
01-17-2014, 07:54
Mrs. Sharpienads and I just started our total money makeover this month. I have to say, having a written budget and using the envelope system feels good. We're not hurting for money by any means, and it is absolutely frustrating how much money we've wasted over the years, especially when we were both working.
We really need to do this. We're comfortable but we leak so much discretionary income, its disgusting.
osok-308
01-17-2014, 08:09
You'll never go broke living meagerly. Instead of spending money like an idiot, these people should have put stuff in savings (I know, I know, I'm monday morning quarterbacking). I just don't have pity on people like this!
American society consistently preaches immediate gratification and the need for people to have the latest thing. We have a thread on this very forum that encourages people to post a photo of the latest thing they've purchased.
New iPhone coming out? -well, get in line and be one of the first to buy because if you don't have the latest one, you simply cannot survive!
New keymod rails coming out from BCM? by all means, scramble to get one, your quad-rail won't work once the key mods are released.
New new new, buy buy buy.
We live in a consumer-driven society, it'd actually be rather surprising if a whole lot of people didn't dig a financial hole in their lives and get behind - the credit card companies and mortgage brokers depend on that mentality being acceptable.
American society consistently preaches immediate gratification and the need for people to have the latest thing. We have a thread on this very forum that encourages people to post a photo of the latest thing they've purchased.
New iPhone coming out? -well, get in line and be one of the first to buy because if you don't have the latest one, you simply cannot survive!
New keymod rails coming out from BCM? by all means, scramble to get one, your quad-rail won't work once the key mods are released.
New new new, buy buy buy.
We live in a consumer-driven society, it'd actually be rather surprising if a whole lot of people didn't dig a financial hole in their lives and get behind - the credit card companies and mortgage brokers depend on that mentality being acceptable.
First thing I did when medically discharged from the air force is pay off all debt. Then throw away the credit cards. All major purchases will be made with savings, and I calculate a payment and pay myself back into the savings with interest. If I don't have enough to buy the item I won't. Credit cards are bad, real bad. REALLY really bad.
Credit cards are bad, real bad. REALLY really bad.
if you carry a balance.
I think the magic number is around $70k per year. That was the amount where people were the "most happy" or something. More than that and it just brought on more problems. That's a gross generalization though. If you make more and are smart with it, you'll be even more comfortable. Most people that make more than that feel like they don't have to watch their money so they end up over spending trying to have the best and nicest thing in the neighborhood...all the time.
RblDiver
01-17-2014, 11:07
Heck, I know I spend too much and should save more, but at least I'm only spending money that I actually have!
tmleadr03
01-17-2014, 11:19
if you carry a balance.
I don't want to talk about my debt load with the business. Fucking addicted to tools...
So pretty and shiny and new... Damn you tool truck!!!!
I don't want to talk about my debt load with the business. Fucking addicted to tools...
So pretty and shiny and new... Damn you tool truck!!!!
hehe
Business is a little different from consumer, one hopes you are getting some return on your investment in tooling.
ChunkyMonkey
01-17-2014, 12:31
I think the magic number is around $70k per year. That was the amount where people were the "most happy" or something. More than that and it just brought on more problems. That's a gross generalization though. If you make more and are smart with it, you'll be even more comfortable. Most people that make more than that feel like they don't have to watch their money so they end up over spending trying to have the best and nicest thing in the neighborhood...all the time.
Maybe if you are single. 6k a month now a days won't get you into a decent home or save up for a car especially if you have a family.
$180k a year for 20 years is the average needed to send 2 kids to any real education plus to retire comfortably.
The ironic part is that the easiest way to reach financial freedom is by leveraging yourself with good debt against money making property/business.
So it's not really that debts are bad.. It's how you use the debt for.
Sent from my iPhone using Tapatalk
New iPhone coming out? -well, get in line and be one of the first to buy because if you don't have the latest one, you simply cannot survive!
New keymod rails coming out from BCM? by all means, scramble to get one, your quad-rail won't work once the key mods are released.
New new new, buy buy buy.
Hey I have to be the first to own tante BCM key mod! Get off my case...
I know a lot of people that feel that an education is a must. How many people have 100k in students loans and don't even make 40k?
Budget your money is the way I was taught. You have $20 a week on food. You want something, spend lunch money and don't eat lunch. I'm not saying use cash 100% because there are benefits of using a CC. I plan to be debt free this year. .
Budget your money is the way I was taught. You have $20 a week on food. You want something, spend lunch money and don't eat lunch. I'm not saying use cash 100% because there are benefits of using a CC. I plan to be debt free this year. .
When I use cash, I am a lot more frugal with my money. When you can actually see the money leaving your wallet, you really decide what you want and what you need. Invisible (Credit/debit card) money spends quickly and easily.
ChunkyMonkey
01-17-2014, 13:02
Hey I have to be the first to own tante BCM key mod! Get off my case...
I know a lot of people that feel that an education is a must. How many people have 100k in students loans and don't even make 40k?
Budget your money is the way I was taught. You have $20 a week on food. You want something, spend lunch money and don't eat lunch. I'm not saying use cash 100% because there are benefits of using a CC. I plan to be debt free this year. .
Paying off your mortgage early is always a great feeling!
I know people that take a credit card to pay another card!! Facepalm
They live paycheck to paycheck, have no savings and eat out everyday.
What about gf/wives that pay for nails/tanning every two weeks. Fuck sake you have nails that grow, let that shit grow out. Lay out in the sun!
Taking one card to pay off another is actually a good idea if you move to a card with for example 1 year no interest. Sure does beat 18% on the other card.
As to the problem. Well we get at the root of one of the truths in America, even when you make 100K a year, you are still a slave if the area you live in costs too much to live. Example - San Fran. Look at the average price of a meager house out there. There is a reason why I never wanted to live in NYC or San Fran. Because the cost of living is just stupid.
Circuits
01-17-2014, 13:21
As to the problem. Well we get at the root of one of the truths in America, even when you make 100K a year, you are still a slave if the area you live in costs too much to live. Example - San Fran. Look at the average price of a meager house out there. There is a reason why I never wanted to live in NYC or San Fran. Because the cost of living is just stupid.
Agreed, though the pay scale in those areas tend to be stupid, too. Best of both worlds is to work in stupidtown and live in cheapsville. Commute as a compromise or telecommute FTW!!
tanning every two weeks. Fuck sake you have nails that grow, let that shit grow out. Lay out in the sun!
Having been to the dermatologist 48 hours ago, and still having a fresh wound on the side of my face as a result thereof, I'd strongly suggest not doing either of the highlighted activities above.
Jeffrey Lebowski
01-18-2014, 07:57
Why should the educational system have to teach financial literacy?
It really should just be part of "math" growing up, but FOUR times last week I had this exact same thought that financial literacy is a huge, huge problem.
In my case, it was watching corporate behavior, and my own complaint was that I wish I could run my household accounting the way they were behaving. (I really could not and do not really wish this).
It is scary. People take their cues from others, and corporations are just as bad as individuals in too many cases. At some point, this comes to a head.
DireWolf
01-18-2014, 10:44
It really should just be part of "math" growing up...
I agree that most of it is just basic math, but I think there are two other big parts as well, since I've had to educate myself on these topics - one is visibility, and just seeing where everything is going (cash, card transactions, scheduled EFT., etc.) in near/real-time, which can be more difficult/time-consuming than one might assume, especially with multiple family members in aggregate... I think the other is just figuring out how the system is set up to game you and using their own dirty tricks against them - for example, if you don't use any credit cards at all that causes a credit hit which makes any major bill more expensive than it would be otherwise, likewise if you use one to near capacity, even if always paid on time (this particularly sucks if you have to routinely make large work-related purchases on personal cards which are expensed later), so my plan to counter this is to use multiple credit cards with relatively high limits, then use each individual card to automatically pay one monthly recurring bill, with automatic payment in full each month from the bank. I'm still testing this to see what the net-effect over time is, but I figure it's a good way to use a messed up system of rules to my benefit with minimal additional effort/risk.....
Circuits
01-18-2014, 12:41
for example, if you don't use any credit cards at all that causes a credit hit which makes any major bill more expensive than it would be otherwise, likewise if you use one to near capacity, even if always paid on time
This - two huge factors in credit rating are the number of open accounts in good standing, and the ratio of debt to credit limit. Closing down cards you don't use can actually drop your FICO score, because the formulas used by the system presume people with fewer credit accounts are less credit worthy.
The other side of the equation is having no late pays, no collections and no defaults.
Even if you're not using a card, as long it's open and in good standing, and doesn't charge you a yearly fee, it's generally a good thing for your credit score, up to a certain point.
KestrelBike
01-18-2014, 13:49
It really should just be part of "math" growing up, but FOUR times last week I had this exact same thought that financial literacy is a huge, huge problem.
In my case, it was watching corporate behavior, and my own complaint was that I wish I could run my household accounting the way they were behaving. (I really could not and do not really wish this).
It is scary. People take their cues from others, and corporations are just as bad as individuals in too many cases. At some point, this comes to a head.
If people were/had-been financially literate, our current government leaders would all be in jail, or would never have been elected.
Financial literacy really should be one of the most important things taught in schools today. But of course, Corporate America will have none of that. It seems that more emphasis is placed on training young Americans on how to go INTO debt, rather than STAY OUT of debt. Wonder why.....
I also want to:
get a g-damn PhD with a student loan which I do not want to pay it off.
get a Ferrari 458 Italia Nikki Lauda edition.
go on a vacation every year.
go out to eat a fancy food every other day.
go to starbucks every day.
buy a $2.5mil house on a damn MARGIN, south of Orchard Mall around 144th and I25, and seek government mortgage bailout.
buy myself a $3000 suit every quarter.
have my wife shop at LVMH store and buy a $4000 purse every other month.
buy my kid $500 clothes every month.
buy a $1.8 mil condo on a full 100% loan at Westwood/Beverly Hill area.
max my credit card to fulfill my impulse purchase.
be a member of a high end sports fitness club and play racquetball every day to lose weight. (This is one that I might bite my tongue and do. After taking hypertension meds, i am getting obese).
......however, i decide to save and invest.
Moral Hazard is a bitch.
screagle2
01-18-2014, 16:41
[QUOTE=rondog;1483993]Financial literacy really should be one of the most important things taught in schools today. But of course, Corporate America will have none of that. It seems that more emphasis is placed on training young Americans on how to go INTO debt, rather than STAY OUT of debt. Wonder why.....[
i will probably get flamed again, and can stand that.......Where does parental and personal and personal responsibility come in at?
I've never had any business, Mom & Pop, or corporate, force me to buy from them.....the gov't. ....well that's different.
blacklabel
01-18-2014, 16:47
[QUOTE=rondog;1483993]Financial literacy really should be one of the most important things taught in schools today. But of course, Corporate America will have none of that. It seems that more emphasis is placed on training young Americans on how to go INTO debt, rather than STAY OUT of debt. Wonder why.....[
i will probably get flamed again, and can stand that.......Where does parental and personal and personal responsibility come in at?
I've never had any business, Mom & Pop, or corporate, force me to buy from them.....the gov't. ....well that's different.
I'm with you. Then again I think most societal problems stem back to crappy parenting.
[QUOTE=screagle2;1484029]
I'm with you. Then again I think most societal problems stem back to crappy parenting.
[QUOTE=rondog;1483993]Financial literacy really should be one of the most important things taught in schools today. But of course, Corporate America will have none of that. It seems that more emphasis is placed on training young Americans on how to go INTO debt, rather than STAY OUT of debt. Wonder why.....[
i will probably get flamed again, and can stand that.......Where does parental and personal and personal responsibility come in at?
I've never had any business, Mom & Pop, or corporate, force me to buy from them.....the gov't. ....well that's different.
We don't even need to go as far as parental/parenting issue.
It is more of a common sense.
Wage-Consumption= Disposable
C>W= Negative #
C<W= Positive #
My parents are totally opposite. I really don't want to say anything bad, but they spend and spend. Barely have any cash. No house, barely running car.
My dad received at least 3-5 bailout from my aunts, but still failed by overspending. Gambling was another factor.
My mom spends not as much as my dad, but does spend C=W (which makes it no $ to save a dime).
If I followed my parent's footstep , I would've probably gone bankrupted.
I would probably blame more on "out of means" friends who influence them. However , it is still their dumbass fault for overspending the $.
Friends who are so welthy, that they spend lots of $$ compare to average median income. Then average median income friends wants to belong to stupid little circle that they overspend and match the spending.
They buy lavishing car, clothes, watches, electronic and etc on a margin/credit. When they get laid off, they are basically F'ed.
Moral of the story: Live within your means. If you don't like that, get more means. A larger and larger amount of people just get those means the wrong way. Debt.
I read somewhere about a study on in the early days it took one income for a blue collar worker to support wife and two kids.
few decades later, it is necessary for both adults to work to make ends meet.
Nowadays people are living off credit.
I wish I would have saved it.
ChunkyMonkey
01-18-2014, 20:17
Moral of the story: Live within your means. If you don't like that, get more means. A larger and larger amount of people just get those means the wrong way. Debt.
I read somewhere about a study on in the early days it took one income for a blue collar worker to support wife and two kids.
few decades later, it is necessary for both adults to work to make ends meet.
Nowadays people are living off credit.
I wish I would have saved it.
http://www.stanford.edu/class/polisci120a/immigration/Median%20Household%20Income.pdf
I know where you going, but single income back in the days doesn't mean to support 100% loan to value mortgage, 2 cars, 4 cellphones, 2 tablets, 2 PC/laptops and so on per household. In fact, inflation adjusted income per household, we are still not too far off. It's the financial literacy aka personal responsibility imho.
I think I was misunderstood. Kids need to be taught financial stuff like how to save, how to invest, how to establish credit and keep it, how to and how NOT to borrow money, use credit wisely, buy houses/property, etc. etc.
I was never taught these things, not in depth anyway, and I've suffered from the lack of knowledge. Corporate America seems to want nothing more than to enslave people financially. You can't expect parents to teach their kids this stuff, if the parents don't know it themselves.
I'd love to get some good financial schooling! I just think it should be it should be more available to high school kids.
http://www.stanford.edu/class/polisci120a/immigration/Median%20Household%20Income.pdf
I know where you going, but single income back in the days doesn't mean to support 100% loan to value mortgage, 2 cars, 4 cellphones, 2 tablets, 2 PC/laptops and so on per household. In fact, inflation adjusted income per household, we are still not too far off. It's the financial literacy aka personal responsibility imho.
Makes sense yeah we have more toys. I guess out utilities are more too.. we now have cable, internet, cell phones.
I knew what you meant Ron, and agree with you. Anyone ever go to a financial meeting provided by your employer? They are down right pathetic. The material is like from an Ehow article or something.
Aloha_Shooter
01-19-2014, 14:51
Look , I agree that kids should learn financial literacy. I just disagree with the rant that it's something for the educational system or some plot by Corporate America. It's not your employer's responsibility to teach you how to save your money or how to spend it wisely. I remember my housemate calling me "rich" 20 years ago because I had just bought a personal computer. I just looked at him in incredulity and told him, "we get the same salary but I pay more state income tax than you do. I just haven't spent $40 a week on beer or $50 a month at the strip club for the past year and a half." The look on his face as the math sank in was priceless.
We have had an overwhelming push in American society toward personal IRresponsibility over the past 5 decades. It's reinforced by TV, movies, music, the so-called "news", societal "activists", etc. We don't need to put one more thing into the educational system, we need it to get back to teaching the basics like it used to and we need parents to get back to parenting. Take responsibility for yourself and your future.
Look , I agree that kids should learn financial literacy. I just disagree with the rant that it's something for the educational system or some plot by Corporate America. It's not your employer's responsibility to teach you how to save your money or how to spend it wisely. I remember my housemate calling me "rich" 20 years ago because I had just bought a personal computer. I just looked at him in incredulity and told him, "we get the same salary but I pay more state income tax than you do. I just haven't spent $40 a week on beer or $50 a month at the strip club for the past year and a half." The look on his face as the math sank in was priceless.
We have had an overwhelming push in American society toward personal IRresponsibility over the past 5 decades. It's reinforced by TV, movies, music, the so-called "news", societal "activists", etc. We don't need to put one more thing into the educational system, we need it to get back to teaching the basics like it used to and we need parents to get back to parenting. Take responsibility for yourself and your future.
Agree 100%. Parents need to take responsibility. The gov can't teach it to their own workers and we want them to teach our kids. No thanks. I'm guessing most parents here are responsible.
Some adults need encouragement.
Each one teach one.
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