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Minimum wage isn't better than nothing if it means that you can't look for another job because you are stuck at work when you should be turning in applications, and by the time you get off work, all the people you want to talk to to apply are closed for the night. Living below your means is more difficult the lower your means are. And like I said, we weren't at that point yet. If we reached the point that we were out of money, he would have gotten a minimum wage job.
We financed a car because we didn't have sufficient savings at that point in time to pay cash. We did pay off a 5 year loan in under 3 years, thus saving a lot of interest. And the credit card was 0% interest.
And not accepting welfare is part of how I was raised. I don't think people who are capable of working should be on welfare. And I highly doubt that someone with no kids making what I make, even by myself, in my area's low cost of living, would qualify for welfare anyway.
You can also work part-time. How old was the car? Well if its 0% interest then its actually better to pay monthly payments and save the other $ that may have had paid cash for.
Well, what if you are looking and can't find work and even if you did, you can still get Welfare money regardless of how you were raised. We pay so much taxes to the Gov't anyway.
I only have $3000 in savings, but am luckier than most people in my position. I was diagnosed with cancer a month after my 23rd birthday and blew through most of my savings just in the initial diagnosis process (much of which wasn't covered by insurance). I have since had to buy a car and deal with the astronomical insurance rates in my area because public transportation is no longer an option for me.
Now I am in the red every month. There aren't social safety nets out there for young adults in my position. I am struggling to work full time because I don't qualify for FMLA and even if I did, I have maybe 3 month's expenses - if I'm lucky - saved. I have no other debt besides medical and car debt and while I will most likely will take on a bit of debt to cover books and other extraneous expenses for my MBA, I am starting a free MBA at a top ranked university through work shortly. I feel fairly confident that once my medical crisis is over, I'll be able to pull out of the debt as quickly as a 35,000 income in Boston will allow me to.
Insurance rates on your auto depends on your history mainly.
Even living on a $40K income in San Jose - highest median rent in the country - I made sure to have $5K at all times and aimed for $10K. Now that I'm making $70K, I haven't changed a thing. My balances are going up each month and I have a steady flow of cash going into retirement.
Well the rent is very high in San Jose. If you can live with a roomate then you should be ok.
I think the lack of savings and its twin sibling, financing your life to the hilt, come from two beliefs-- irrepressible optimism, all too often unwarranted, and a sense of entitlement-- that because you worked hard and got a college degree (or whatever), you should drive a Beemer. My wife, for some reason, has a moderate addiction to HGTV, but I can't stand watching all these people who MUST have all brushed aluminum appliances, a three-story atrium front entry way, and, well, whatever. For their first house! Buying your first house for a half million dollars is something I not only can't wrap my mind around, it positively offends me.
Oh, and get off my lawn.
College degree is just a piece of paper to me. Its how you use your degree, that counts. Not all college degrees are worth the long term investment anyway since the tuition is sky rocket.
No wonder there are so many foreclosures because people bought more house then they could afford.
Schools won't teach how you to budget 101 and creditors love that, lol.
Quote:
Originally Posted by tijlover
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've become much more compassionate, over the years, with people who simply can't save or manage money. I did accounting work for 10 years, so it's been a long haul for me to recognize individuals who, inherently, have no capacity for managing their money, and feel some compassion for them.
Yes, it's extremely irritating, if you're a superb money-manager, like myself, even to have someone ask me for a cigarette who hasn't been near a stove to once cook for themselves and brags how they only spent $5.99 for a lunch that day!
But, let's get it straight, there's people out there who will never, ever be able to manage their money. My condolences to them!
USA is the most richest country in the world as far GDP goes.
$40K a year should be good enough to live a comfortable life in the South. No reason to finance a car and college is not always a good bargain.
What you do consider the 'American Dream'? Owning a home? education? good stable work? financial freedom?
We do give money to other countries also.
I live in Dallas, one of the more affordable US cities, and I think $40K would be difficult to live on here. Ok, you could 'get by' but you wouldn't be able to save that much. Vacations would be difficult. And you wouldn't want to get surprised by any medical bills or large car repairs.
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.
Studies show that American spend the most money on Coffee.
Its ok to spend like that as long as you got a solid long term retirement plan.
I have been told few times to upgrade my phone but I don't need it. I still have a flip phone and I don't need the fancy smartphones that I won't use.
The creditors must love your friend.
I like listening to Dave Ramsey.
Quote:
Originally Posted by dangles
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.
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