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For example if I had to pay for cash for everything I wouldn't be able to eat some months. This isn't because I'm living beyond my means, but rather my income varies seasonally. Credit in this case gives you a nice buffer when income is slow, you just have to be careful to pay it all down when your income is high. Now, I could save money during good times for the bad, but the yields on savings accounts are pretty bad. I would much rather put money into a solid investment, but then you can't easily take it out whenever you want (It may be down in value, there may be tax consequences etc).
Or you could buy food and supplies in bulk when you have plenty of money and then avoid debt when you don't have much. But that requires planning ahead more...
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From what I can tell it seems folks born during the depression era not only lacked debt but they also saved/invested like crazy.
Be careful with that idea. Many investments did terribly during the depression (think about it, the market crashed lol). Those who were frugal and had good savings did better than those who had dumped their money into paper "investments." People who could afford to bought real estate up like mad for pennies on the dollar, and eventually did good, but it took nearly 20 years to make those big profits. Most people I've chatted with who went through the depression were/are obsessive about savings, not investments. They were rightly distrustful of banks and markets, and dislike credit. Of course, money was silver and/or gold backed, so savings weren't going to lose value over time as they do now, well, until FDR started his gold confiscation and inflation, but still, even then, the money's value was much more stable as it wasn't simply fiat money.
Anyways, the problem today is a combination of foolishness/shortsightedness, and a bad system. People are foolish and short sighted and want everything now--a high paying job (requiring college education), cars, houses, etc., live beyond their means using credit, etc. I'm in my 20's and will be building my own home (with my own two hands) as I can afford it, using logs from my own property, I've picked up windows, woodstove, etc., dirt cheap and free even, and so, will only have the debt I owe on the land (under $10,000, which will quite possibly be gone by next year) as opposed to hundreds of thousands of dollars for a large home, yet, other people tend to think I'm foolish--they'll learn otherwise but it will be a hard experience for them. It seems even on very basic issues, people tend to be foolish and wasteful. How many people, for example, cook their own food, from scratch? Hardly any it seems. They buy either overpriced convenience items from stores, or eat/order out, all of which is wasting money they don't really have. Granted, grain prices and such are rising so even basic ingredients are more expensive at stores, but it's still a big savings over factory ready mixed or restaurant made foods. How many people in their 20's, even if they had the space, would grow a garden or raise some chickens or something to help get by? Few, but during the depression and WWII many did so. How many would be willing to live without phones, TV's, internet, or even electricity if they are short on money? Few, most will rack up debt to keep these things. Me on the other hand, the minute I realize I can't afford this computer--it's gone. Actually, it will be anyways once I move to my own property, but in the meantime...my point is, people are unwilling to give up luxuries and comforts, and all too willing to get in debt for them. The grasshopper versus the ant scenario, if anyone's ever read that little story.
The system has partly caused the problems--a dollar that loses value everyday in fact, making saving money, if you only save paper FRN's, useless. Outsourcing of unskilled and semi-skilled labor jobs that used to pay well enough that there was no need to get into college loan debt to get a high paying job. Now the only well paying jobs for the most part require college education--and the colleges and banks of course don't mind taking advantage of this fact to make money.
I totally agree. the problem is most parents dont know anything about finances and the kids learn from them.
My parents certainly didn't know much. Although I do remember learning a little from a high school class in economics, they introduced us to stocks, investing, and basic finance.
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Or you could buy food and supplies in bulk when you have plenty of money and then avoid debt when you don't have much.
I don't have a lot of space to store food, but I do buy in bulk what I can. But much of what I eat (veggies, fruits etc) can't be purchased this way.
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Most people I've chatted with who went through the depression were/are obsessive about savings, not investments.
Yes, they mainly saved. But many invested in Bonds and things of that nature.
My parents certainly didn't know much. Although I do remember learning a little from a high school class in economics, they introduced us to stocks, investing, and basic finance.
I don't have a lot of space to store food, but I do buy in bulk what I can. But much of what I eat (veggies, fruits etc) can't be purchased this way.
Yes, they mainly saved. But many invested in Bonds and things of that nature.
Perhaps adjust your diet when you are on a tighter budget. Most vegetables/fruits can be canned or frozen. A handful of 5 gallon containers of dried staples (or even canned items) take up little room.
If you mean bonds to support the war effort, yes, they became popular during the war, but more for patriotic reasons than financial ones. And with the dollar being more stable back then, they were not as poor an investment as now.
Perhaps adjust your diet when you are on a tighter budget. Most vegetables/fruits can be canned or frozen. A handful of 5 gallon containers of dried staples (or even canned items) take up little room.
I'm not going to sacrifice my health and well-being just to prevent myself from using a credit card to balance out my income. Eating fresh veggies and fruit is bunch better than eating canned or frozen veggies. Using a credit card for short term funding really doesn't cost me that much, the rates are low and I pay it off as soon as the funds are available.
I'm not going to sacrifice my health and well-being just to prevent myself from using a credit card to balance out my income. Eating fresh veggies and fruit is bunch better than eating canned or frozen veggies. Using a credit card for short term funding really doesn't cost me that much, the rates are low and I pay it off as soon as the funds are available.
If you are a really healthy eater I would agree..... to a point.
Frozen vegies are not that bad for you. You could save some money by just switching to frozen 2-3 times per week. and then using canned only for certain things (spag sauce, chili, soup, etc) I probably open up 3-4 cans of something per month. unless we are camping
anyway, sometimes its hard to believe the savings something small will make. obviouslydont start eating crap food because it is cheaper!!!!! you will pay with your health in the long run.
So what is going to happen when all these 20 something’s are laid off and start missing their house, student loan and mortgage payments? I mean when more than a few, like 30% or more just do not have any income? What is going to happen to them and to the rest of us? How are they going to be fed, housed and have health care? How is the government going to collect income, sales and property taxes to support the military and corporate welfare?
WHAT ARE WE GOING TO DO? WHAT ARE YOU GOING TO DO?
Housing starts data was released today and it jumped a whopping 8.2%. If you read the entire article though..the jump is in multi-family housing, not single family housing. I interpret that to be builders are thinking long term here anticipating renters rather than buyers.
April housing starts rise best since Jan 2006 - Yahoo! News (broken link)
snippet from above:
The April building bounce occurred entirely in multiple-unit dwellings, while single-family home building declined to a rate of 692,000 from 704,000 -- the lowest monthly rate since 604,000 in January 1991
I'm not going to sacrifice my health and well-being just to prevent myself from using a credit card to balance out my income. Eating fresh veggies and fruit is bunch better than eating canned or frozen veggies. Using a credit card for short term funding really doesn't cost me that much, the rates are low and I pay it off as soon as the funds are available.
Your health won't go bad if you rely on a lot of dried, canned or frozen stuff during the winter. The key is to have good canned/dried/frozen items, not the typical junk a lot of people eat. Canned or dried or frozen food isn't less healthy, it simply has less nutrition per a given amount (even simply cooking fruits and vegetables tends to take away some of the nutrients), so you must consume slightly more than you would fresh, although the loss of nutrients in dried foods is actually quite tiny. It's quite unnatural to have fresh fruits and vegetables in the middle of winter, out of season. I can much of my own food for winter use during the summer and fall, and I'm still healthy...
If you eat with the seasons then you naturally change your diet throughout the year.
Buying local produce that grows with the season does not make you less healthy.
Example: you don't need strawberries in January if they don't grow there in January.
We eat more root vegetables during the winter. An occasional can of corn during the winter won't harm your health.
So what is going to happen when all these 20 something’s are laid off and start missing their house, student loan and mortgage payments? I mean when more than a few, like 30% or more just do not have any income? What is going to happen to them and to the rest of us? How are they going to be fed, housed and have health care? How is the government going to collect income, sales and property taxes to support the military and corporate welfare?
WHAT ARE WE GOING TO DO? WHAT ARE YOU GOING TO DO?
unfortunately, the smart people will pay. The ones that lived below their means and took care of their families will have to pay more in taxes to help the "helpless".
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