How many of you "live below your means"? (insurance, 2011)

[BLAZER PROPHET]

We used to.

But a layoff, daughter with terminal illness, two boys in college... and it all comes tumbling down. We're on a three year plan to solvency.

[tatiana1]

Originally Posted by juggler

I'm curious to know how many people consider themselves to "live below their means", and exactly what does that entail for you. For those that do live below their means, IYHO, to what extent have you been affected by the uber-crisis?

I think you need to ask the question differently. Most older folks (above age 45) definetely live below their means because they are smarter, more experienced in money management/finances and are avid savers. The age group, in my view, that live below their means is 45yrs and up.

Anyone who is younger (18 - 44yrs) definetely live well beyond their means because they are young, inexperienced about money management and live for today. If you can find people who are 18 - 44yrs old who "live below their means" is very admirable but I bet you, there are not too many. Most of them were fooled and thus are paying for it now. I guess what I'm saying is, age is a factor in this "living below your means" scenario...

[StealthRabbit]

Originally Posted by BLAZER PROPHET

We used to.

But a layoff, daughter with terminal illness, two boys in college... and it all comes tumbling down. We're on a three year plan to solvency.

I know the problem... I'm trying to decide how to pay my own $5k tuition for this semester. Use my 3.2% Heloc rates? I hate burning cash in a 'down market'. Oh for the days of unlimited OT.. For many yrs I never touched my check, just lived on OT and part-time jobs. That was BEFORE kids, spouse...

I suggest your kids pay their own college, as I bet they can get some great consolidation rates next summer. My kids locked their student loans at 2.7% for 20 yrs. They are in no hurry to pay those off, Can you imagine what inflation is going to do to that principle in 20 yrs!

[mjohnson4381]

Originally Posted by tatiana1

I think you need to ask the question differently. Most older folks (above age 45) definetely live below their means because they are smarter, more experienced in money management/finances and are avid savers. The age group, in my view, that live below their means is 45yrs and up.

Anyone who is younger (18 - 44yrs) definetely live well beyond their means because they are young, inexperienced about money management and live for today. If you can find people who are 18 - 44yrs old who "live below their means" is very admirable but I bet you, there are not too many. Most of them were fooled and thus are paying for it now. I guess what I'm saying is, age is a factor in this "living below your means" scenario...

I don't agree. I might live beyond my means, but it's not because I'm inexperienced about money. I think I know about money. I'm finishing up an accounting degree and I've worked in banking for several years. And I'm good at both.

School is just expensive and, if you don't have a trust fund or any scholarships, it's almost impossible to pay for without going into debt. But Benjamin Franklin said that an investment in knowledge always pays the best interest...so that's what I keep reminding myself.

Some young people are clueless, but others just haven't had as much time to accumulate things and establish earning a good earning potential. Bigger cash needs + smaller cash inflows = resorting to debt.

[nightbird47]

Originally Posted by janb

I know the problem... I'm trying to decide how to pay my own $5k tuition for this semester. Use my 3.2% Heloc rates? I hate burning cash in a 'down market'. Oh for the days of unlimited OT.. For many yrs I never touched my check, just lived on OT and part-time jobs. That was BEFORE kids, spouse...

I suggest your kids pay their own college, as I bet they can get some great consolidation rates next summer. My kids locked their student loans at 2.7% for 20 yrs. They are in no hurry to pay those off, Can you imagine what inflation is going to do to that principle in 20 yrs!

My son will be a senior next year and the way things are going I'm just hoping that the high school won't strip the music program down to nothing since he excells in music. As for college, by then, don't even want to consider...

[neil0311]

Own a house with a mortgage that is 20% of gross pay (70% LTV 30 year fixed mortgage and not a high priced home)...two cars (mine and wife's) and carry loans that are 6% of gross pay. We pay all credit card monthly and have no balance from month to month. Our monthly expenses, including mortgage, car loans, insurance, utilities, gasoline, and groceries, is usually no more than about 38% to 40% of gross pay.

We live just fine...3 year old 3800 square foot house, 2007 model cars, and nice stuff. We're just not extravagant. We live on just my income, so we live at a comfortable level, but not like some people who buy too much house, too much car, and are always trying to impress. If I were to lose my job, it would be a distressing and emotional experience, but we wouldn't be worrying about losing the house next month or servicing huge debt.

[trishguard]

Originally Posted by BLAZER PROPHET

We used to.

But a layoff, daughter with terminal illness, two boys in college... and it all comes tumbling down. We're on a three year plan to solvency.

I'm sorry about your daughter.

[gwynedd1]

Originally Posted by BLAZER PROPHET

We used to.

But a layoff, daughter with terminal illness, two boys in college... and it all comes tumbling down. We're on a three year plan to solvency.

Hi BLAZER PROPHET,

Other than a minority of our population that does have a problem managing money most people fall into bankruptcy from such disasters like an illness. Probably the biggest self inflicted financial wound is divorce. In that case the average American is guilty as charged. God be with you in this time of trouble.

[20yrsinBranson]

Originally Posted by juggler

I think a substantial chunk of the financial crisis the nation is now in is due to people not living below their means - they buy more house and car than they can afford, take extravagant vacations, upgrade their TV to the newest 107" plasma model, etc.

I'm curious to know how many people consider themselves to "live below their means", and exactly what does that entail for you. For those that do live below their means, IYHO, to what extent have you been affected by the uber-crisis?

I would say that we live well below our means. Although we do not make a great deal of money our low maintenance lifestyle affords us a very comfortable life on aboiut $12,000 to $14,000 per year. I have discussed this in other threads, however, since you asked....

We do not have a television so we do not pay for cable or satillite tv. Likewise, we do not rent or purchase movies. We do not watch movies, period, which means that we do not go to the theater either.

We live in a very modest 1989 singlewide mobile home on 26 rural acres of land.

We do not celebrate Christmas (i.e. no presents). We do not buy each other birthday presents.

We have two vehicles. One is a 2000 Ford Explorer Sport and one is a 1993 Cadillace Eldorado. Needless to say, both are paid for.

We do not have children, therefore, we do not have the expenses associated with them.

We take exceedingly good care of ourselves, eat well and we get plenty of rest and sleep (remember we have no children lol). Therefore, we do not need to go to doctors. Since I am a veteran, I have medical benefits through the VA in the event of a catastrophic injury. Therefore I do not have to pay for medical insurance (which I would not do even if I did not have VA care available to me). My husband is a Canadian and he does pay about $158 per month fo medical insurance.

We have a big vegetable garden every year, and I dehydrate, can and freeze a lot of the produce over the summer. We eat the very best food that we an afford. We also eat out quite a lot (too much!!!).

We don't buy "things" very often, but we do not hesitate buying something when we need it. I buy things mostly at the local thrift shops. I can honestly say that, other than underwear, I have not purchased a new item of clothing in probably at least 10 years. All of our furniture is old and was purchased either second hand or was given to us. The only exception is our bed, which we did buy about 8 years ago for around $2,000.

And no, knock wood, so far we have not been affected by the current economic climate in this country.

20yrsinBranson

[Braunwyn]

Originally Posted by tatiana1

I think you need to ask the question differently. Most older folks (above age 45) definetely live below their means because they are smarter, more experienced in money management/finances and are avid savers. The age group, in my view, that live below their means is 45yrs and up.

Anyone who is younger (18 - 44yrs) definetely live well beyond their means because they are young, inexperienced about money management and live for today. If you can find people who are 18 - 44yrs old who "live below their means" is very admirable but I bet you, there are not too many. Most of them were fooled and thus are paying for it now. I guess what I'm saying is, age is a factor in this "living below your means" scenario...

I like your age time-line here. 18-44...all youngins! I'll buy that. Of course, when I hit my 40's hopefully 54 will become the new 44. eta: scratch that, the new 34.