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We have an entitlement problem in this country. My brother is a perfect example. While I love him as my sibling, I can't help but be frustrated by his blinders that he's chosen to put on for his living situation. He lives in a bad neighborhood in a moldy rental house that he pays $750 a month for, has zero credit (almost literally - he has 2 line items on his credit report, one is student loan debt and one is medical debt - neither have had ANY payments on them since they appeared on his report as delinquent) and the last 2 cars he's had were taken from my parents, one when my dad was unable to drive any longer due to his disability he took that one and didn't add any oil to it, so the engine siezed. Then he took their extra car that they had acquired since then which just died. Also, the parents have been paying his registration and insurance the entire time since the cars were technically still in their names.
He's now panicking (literally having panic attacks) at age 36 because he doesn't know how to get another car since there are no more family cars for him to "inherit". So, he looks at buying a used car. While he makes a decent hourly wage at a medical call center, he has no savings because he's budgeted basically to the max with his house rental. So, the smart thing would be to get maybe a 4-5k car like a civic that just had the timing belt changed and put a bit of money into it so that it runs for awhile right? Nope, he needs a $10k car with leather seats and bluetooth because he wants that.
So, he has to stretch out the loan to 5 years on an already 6 year old car to get to the payment he THINKS he can afford - and the only way to get that is with my father as a cosigner, who continues to coddle him. I'm not jealous because I do well for myself and I suspect he'd do the same for me if I was in financial dire straits, but I don't want his help - he shouldn't have to help when he's on a fixed income and supporting him and my mother on his VA benefit. I'm gonna guess he never thought about paying insurance either.
It's doubly frustrating when I've been in banking for 17 years and he continues to defy everything I've attempted to teach him about proper money management. At least I was able to get him to commit to a budget for the last year or two.
...I also wouldn't disagree with this in total, but if a person or family has next to no cash savings, it's very unlikely they have liquifiable assets either. More likely they have two new cars, four TVs, an RV, a couple of restaurant owners who know them by name, etc.
The only non-cash assets that have any readily liquidity are bullion and home equity. Very little else is going to sell quickly at anything like an investment price. Jewelry, guns, expensive clothing, power sports vehicles, RVs... slow sellers at a steep discount, if at all.
You are right about those who spend most of their resources on possessions that can/cannot be readily liquidated. I was referring to the high percentage of people who have the majority of their 'savings' invested in something that pays a return. Even the best bank savings accounts pay less than 1.5-percent interest, while even the most basic 1-year CD's pay twice that amount. IMO, most people with any significant amount of money, use their bank savings accounts for emergency funds, not for long-term savings.
We have an entitlement problem in this country. My brother is a perfect example. While I love him as my sibling, I can't help but be frustrated by his blinders that he's chosen to put on for his living situation. He lives in a bad neighborhood in a moldy rental house that he pays $750 a month for, has zero credit (almost literally - he has 2 line items on his credit report, one is student loan debt and one is medical debt - neither have had ANY payments on them since they appeared on his report as delinquent) and the last 2 cars he's had were taken from my parents, one when my dad was unable to drive any longer due to his disability he took that one and didn't add any oil to it, so the engine siezed. Then he took their extra car that they had acquired since then which just died. Also, the parents have been paying his registration and insurance the entire time since the cars were technically still in their names.
He's now panicking (literally having panic attacks) at age 36 because he doesn't know how to get another car since there are no more family cars for him to "inherit". So, he looks at buying a used car. While he makes a decent hourly wage at a medical call center, he has no savings because he's budgeted basically to the max with his house rental. So, the smart thing would be to get maybe a 4-5k car like a civic that just had the timing belt changed and put a bit of money into it so that it runs for awhile right? Nope, he needs a $10k car with leather seats and bluetooth because he wants that.
So, he has to stretch out the loan to 5 years on an already 6 year old car to get to the payment he THINKS he can afford - and the only way to get that is with my father as a cosigner, who continues to coddle him. I'm not jealous because I do well for myself and I suspect he'd do the same for me if I was in financial dire straits, but I don't want his help - he shouldn't have to help when he's on a fixed income and supporting him and my mother on his VA benefit. I'm gonna guess he never thought about paying insurance either.
It's doubly frustrating when I've been in banking for 17 years and he continues to defy everything I've attempted to teach him about proper money management. At least I was able to get him to commit to a budget for the last year or two.
With that kind of credit and income, he's forced to a buy here/pay here lot paying 2x book value for the car, astronomical interest rates, and a GPS tracker & ignition disabler installed on the car so they can tow it away when he misses payments. He's not going to be able to buy a 6 year old Civic with a recent timing belt change. He's going to end up with an auction car nobody wants that has seen minor reconditioning at the buy here/pay here lot.
This guy should have a bus pass, not a car. If he's living somewhere that doesn't have public transportation, he needs to move.
You do know that only about 15% of people in the U.S. smoke any more...so at least let's not act like smoking is a MAJOR reason for why people are in debt....'kay? A lot more people drink - certainly supposed "middle class" people - let's throw that in the ring as a reason. A pack of cigs is about $5 if you buy a carton...how much is a sixpack or a non-Boone's Farm bottle of wine?
I plead guilty as charged.
Never smoked a cigarette in my life, but I've paid more than my fair share towards beverages.
We have an entitlement problem in this country. My brother is a perfect example. While I love him as my sibling, I can't help but be frustrated by his blinders that he's chosen to put on for his living situation. He lives in a bad neighborhood in a moldy rental house that he pays $750 a month for, has zero credit (almost literally - he has 2 line items on his credit report, one is student loan debt and one is medical debt - neither have had ANY payments on them since they appeared on his report as delinquent) and the last 2 cars he's had were taken from my parents, one when my dad was unable to drive any longer due to his disability he took that one and didn't add any oil to it, so the engine siezed. Then he took their extra car that they had acquired since then which just died. Also, the parents have been paying his registration and insurance the entire time since the cars were technically still in their names.
He's now panicking (literally having panic attacks) at age 36 because he doesn't know how to get another car since there are no more family cars for him to "inherit". So, he looks at buying a used car. While he makes a decent hourly wage at a medical call center, he has no savings because he's budgeted basically to the max with his house rental. So, the smart thing would be to get maybe a 4-5k car like a civic that just had the timing belt changed and put a bit of money into it so that it runs for awhile right? Nope, he needs a $10k car with leather seats and bluetooth because he wants that.
So, he has to stretch out the loan to 5 years on an already 6 year old car to get to the payment he THINKS he can afford - and the only way to get that is with my father as a cosigner, who continues to coddle him. I'm not jealous because I do well for myself and I suspect he'd do the same for me if I was in financial dire straits, but I don't want his help - he shouldn't have to help when he's on a fixed income and supporting him and my mother on his VA benefit. I'm gonna guess he never thought about paying insurance either.
It's doubly frustrating when I've been in banking for 17 years and he continues to defy everything I've attempted to teach him about proper money management. At least I was able to get him to commit to a budget for the last year or two.
People can try to excuse the poor financial situation that a huge portion of the people in our country are in but THIS is a perfect example of what the true cause of MOST peoples financial woes. They have ZERO discipline or financial common sense. ZERO every day common sense and ZERO gumption.
Most people are in their situation because of CHOICES. Period.
There's so much conflicting information out there about what people have in their bank accounts. I've seen articles saying that too many people are keeping too much in their checking account:
If the median checking balance is $2900, the average $9100, then how is it that some people have NOTHING to pay for a $400 emergency? How do these two situations exist simultaneously? Are people flush with money, or are they paycheck-to-paycheck every month?
There's so much conflicting information out there about what people have in their bank accounts. I've seen articles saying that too many people are keeping too much in their checking account...
[...]
If the median checking balance is $2900, the average $9100, then how is it that some people have NOTHING to pay for a $400 emergency? How do these two situations exist simultaneously? Are people flush with money, or are they paycheck-to-paycheck every month?
Good points. I think the problem is trying to compare dissimilar data sets; some might be reported by banks using anonymous sampling or averaging, and others are based on surveys. I don't think it's at all uncommon for someone to have an average checking balance of many thousands and be scraping for gas money; a couple of paychecks in and delay as bill payments go out inflate that total. For surveys, there are ten ways the balance could be misstated; giving the highest figure of the month as the "average" comes to mind.
People lie and misremember, and broad averages conceal as much as they reveal, and when you combine this and other sources that may use completely different methods... you get nonsense. Or headlines, depending on how you interpret the results.
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