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I wonder how many (what percent) of those people have Starbucks five times a week, overpriced ipods, fancy rims on their cars, magazine subscriptions, 120+ cable channels, lease cars every two years, order beverages other than water at restaurants, pay someone to mow their lawn so they have time to walk on a treadmill at a gym, and buy lottery tickets.
To your point:
I’ll take two sides to this argument. Its not quite black and white here.
On one hand, wages have been stagnant since the 80s. Employers offer less and less, bring home more money, and generally people with the same professions are working harder to get by now. Inflation has especially hurt most of us in the cost of food, medicine and fuel. Of those, I would say the first two are something we can do something about. Whats my point? The baseline makes it harder to save.
One big issue with saving is the culture. We are a credit frenzied culture - we want it all and we want it now. The debt/ savings ratio has grown steadily since I was born , and people now think it’s a god given right to be able to borrow so they can get crap they don’t need.
On the other hand, people assume ZERO personal responsibility here. The segway from the credit boom to personal responsibility is a clear one. I find, in general, people who are broke ALWAYS spend more on crap they don’t need. Its universal. They are always broke, always have the newest phones and the like. Take a friend of mine who is a classic example of the average American. The kid is literally paycheck to paycheck. What does he do? He sells his old car, buys a new car at 12%. He buys a smart phone with a 90 dollar data plan. He than buys ANOTHER 300 $ cell phone with the same data plan. He buys crap all the time he doesn’t need. One time he purchased a cell phone boosting signal contraption that didn’t work on his phone and didn’t even want to return it. So how does he plan on paying down his debt? His solution was to take out more college loans to get another degree.
I imagine most people in America are like this, or worse. When you have an unfavorable system, one must be diligent to not overindulge, and one must learn to live within their means. “keeping up with the jones” is a very real phenomenon which keeps people in debt, as everyone wants to one up their buddies. They laugh at my “stuff”, but I laugh at their debt. Stuff never interested me, and neither does impressing people in this manner. However, unlike the average American, I have been debt free for years, paid off my only big loan 2 years before it was supposed to be, and had enough money to survive for 2+ years after being laid off by my previous employee.
In conclusion- yes, its more difficult for a middle class individual these days. But rather than complain, than buy that IPOD you don’t need, people need to assume personal responsibility and learn how to cope…not complain.
I don't know, you're gonna have to refer all those questions to my exwife.
Rich/poor isn't just accumulation of assets it is consumption. If your ex-wife lives an entire life eating out all the time, buying new shoes every week, driving a nice car, etc. when it is all said and done she did not live a poor life.
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I will say, 40K, even in the south, is treadwater money even for a single individual. You ain't starving, but you aren't going anywhere with that.
That is easily above treadwater money for a single person in the South.
Someone mentioned 40K being barely treadwater salary even in low cost of living states. I would have to disagree- I make only about 38K, my wife and I combined only making about 65K- and we live in the Seattle area. We do just fine- we have a smaller new house, two cars, and essentially only spend a little over half of our income each month on regular expenses. It's all about living within your means, which is something most people are not good at.
Someone mentioned 40K being barely treadwater salary even in low cost of living states. I would have to disagree- I make only about 38K, my wife and I combined only making about 65K- and we live in the Seattle area. We do just fine- we have a smaller new house, two cars, and essentially only spend a little over half of our income each month on regular expenses. It's all about living within your means, which is something most people are not good at.
It depends on how much you put down too.
How much did you pay for your house?
How much did you put down?
Well minimum wage is better then nothing if you want to live below your means like myself.
Why even finance a car and why pay interest on the credit card as well as the car?
That welfare is your money when you pay taxes and even if its not then why not take advantage if you qualify?
Texas User, why are you badgering this poster about her financial decisions? I think she provides a stellar example of financial behavior. Prior to the husband's job loss, she & her husband lived below their means and socked away a sizable emergency fund. Then they experienced a financial emergency -- job loss. So they wisely used their accumulated emergency funds. He didn't qualify for unemployment. They got by just fine. They behaved responsibly and didn't try to suck the public teat. Emergency ended, and they've built back up their emergency. What could you possibly fault in that?? That's exactly how it's supposed to work!
Texas User, why are you badgering this poster about her financial decisions? I think she provides a stellar example of financial behavior. Prior to the husband's job loss, she & her husband lived below their means and socked away a sizable emergency fund. Then they experienced a financial emergency -- job loss. So they wisely used their accumulated emergency funds. He didn't qualify for unemployment. They got by just fine. They behaved responsibly and didn't try to suck the public teat. Emergency ended, and they've built back up their emergency. What could you possibly fault in that?? That's exactly how it's supposed to work!
Thank you. I don't regret my financial decisions.
I am the first to admit I haven't been 100% perfect. Perfect would have been to have bought a used car with no payment. But my husband and I drive very few miles and drive cars forever and ever. Therefore, we bought new both times, because we wanted what we wanted, knowing we would have them a long time. Plus it is fairly difficult to buy a used car that has less than 5k miles on it that isn't a lemon, and that is all we would put on them. So I don't regret buying new, despite everything. And we didn't buy anything flashy, each car was under $20k.
100% perfect would also have been to start contributing to an IRA at 22 instead of 32. We never had a 401k to contribute to until last year, so there was nothing to do about that. But I did spend those 10 years getting into a financially stable position in all other ways. So it could have been much worse.
Honestly, I'm pretty happy with my financial situation today, especially given the current economy. 3 years ago, we had student loans, a car payment and a small credit card bill. We weren't contributing to any retirement funds, and we only had about $6k or so in emergency savings. Today, we have no non-mortgage debt, are maxing 2 Roth IRAs and contributing to a 401k, and we have about $15k in emergency savings. We plan to have our mortgage paid off by the time I am 45. So despite having one spouse involuntarily unemployed for a year only 2 years ago, we are still significantly better off financially than we were 3 years ago. How many Americans can say that today?
Are we talking about retirement funds in savings?
There is always unemployment and/or welfare.
I like to live below my means.
i dont separate things into different types of funds. i just try to keep stuffing money into my accounts and it first goes into a money market that i also pay my bills out of. then i divide it up into different investments from there always keeping a ratio of cash and different types of investments, everything growing. i dont believe its good to use accounts like IRA's so i dont (just a little in a ROTH).
i like the additional security living below my means affords me.
My brother, an auto mechanic, thinks it's dumb that people can't repair their own cars and save a heap of money.
The Doctor probably thinks it's dumb that people come to see him, when they could have cured their problem with some common sense.
i think it depends on your means. the more income you have, the more things you can outsource to people like the auto mechanic and the handyman. but if you make very little money, i agree with your brother that these people are dumb spending such a large % of their money on things they can do themselves. you need to make saving a priority and minimizing expenses is crucial for everyone. if you have compassion for people who make bad decisions, thats great. it makes sense, their bad judgement will cause them suffering. however, i dont want to pay for their bad judgement. so say some words of compassion and then walk past them and continue with your life.
$40K a year, single, no kids and no debt? You can live like a King in the South. If you live below your means and invest wisely then you can retire much earlier and still have a couple million dollars in retirement.
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Originally Posted by hinds
ight2020;19295255
I don't know, you're gonna have to refer all those questions to my exwife. I'm not the one in that situation. I will assert she is much more representative of this country's economic attitudes and realities than I am. CD is full of frugal statistical outliers. I don't consider CD reflective of the collective.
I will say, 40K, even in the south, is treadwater money even for a single individual. You ain't starving, but you aren't going anywhere with that. The savings are meager as far as retirements is concerned (especially absent a pension), and outright lunacy to raise a family to levels where the children have the expectation of attempting college. Most people in my generation consider 40K as transitionary wages; nobody wants to get stuck making that and then hope to capitalize in the future. Those who do get stuck act like my exwife, recognizing the opportunity cost of attempting savings at that salary range falls well short of the lifestyle they deem worthwhile for having gone through the trouble of attaining a college degree and working full time in an endeavor they may or may not be passionate for. So they live paycheck to paycheck, live to the standards they were aiming college education for in the first place (think tract housing and new car heaven) and roll the dice with their retirement years.
I'm not telling you what things should be, I'm telling you what things are, based on my observations of my peers. I'm on the boring, self-righteous frugal camp you're on, again you have to address those questions to my median example ex-wife.
I also dont care about GDP. I only care about the spread. I don't believe in trickle down, so total wealth means nothing. I care about the relative living standard of the riff raff that'll torch the malls and streets if you cut the social safety net. I don't care about the empty promise I too *COULD* be Bill Gates, if I *work hard*. Let's get back to the real world problems and put down the Disney movie for a second.
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