Is it just me, or...

[freckles and boo]

I think there are two major contributors to this problem.

Obviously we are led (and lead each other) to believe that EVERYONE lives a fulfilling, materialistic life. It is just a big lie. Most of us don't drive luxury vehicles or have $5,000 televisions or spend a week at the Poly each year or buy $300 shoes. Some people, however, only see the lie and think they deserve to live that way, too. There is absolutely no tolerance for delayed gratification anymore. Many people can't say "no" to themselves.

The bigger problem is a lack of consumer education at all levels. I recall taking consumer ed in high school - we picked a career, researched incomes, created budgets, "rented" apartments, opened a pretend checking account, etc. It was interesting, but I could have certainly used a refresher course in college. That was when I got my hands on a credit card and in four years racked up $1900 in charges. (Granted, most of those where school related books, fees, supplies, etc, but I also charged the occasional pizza and outfit. I got to the point I couldn't even pay the minimums so my dad let me borrow $300 to open a credit union account so I could get a loan. I paid off the loan and repaid my dad and have never gotten into trouble since.) I think before someone with crappy credit (or no credit) can get a credit card or a consumer loan they should be required to go through some training to understand what they are getting into. Highschoolers and college kids should be taught that there is a journey involved and that they actually have to earn the good life, that they aren't entitled to it by virtue of their birth.

I have a brother who has struggled for various reasons, including a learning disability, to keep jobs for longer than a couple years at a time. He and his wife have been married for about twelve years and have three kids. Even though the kids are all in school, she refuses even to work even part-time. They have filed for bankruptcy twice and are always strapped for cash. Whenever there is a problem it is always somebody else's fault. The bank messed up, the phone company screwed up, his employer didn't calculate the paycheck accurately. They accept almost no responsibility for their circumstances, yet they have three expensive dogs, are constantly looking for places to go and things to do, and whenever they get their hands on a small windfall they blow it instead of paying off debt. They owe our sister $1000 and they have conveniently forgotten about it. I have offered to help them create a budget but have been rebuffed a number of times. They don't want to hear about it. I don't think there is an easy answer.

 

[chyam]

I can't imagine having credit card debt that equaled my annual income, but I will also say that I have seen many people on this board be condescending towards anyone that has debt.

Do I LIKE having credit card debt? No. However, we live at an income level where a $1000 emergency room bill isn't going to get paid any other way. We don't have that kind of money sitting around to just write a check, it goes on the credit card. Do we cancel our weeked at AllStars at WDW to pay for it? No, we need the time away like anyone else does, and the $70 we would save on the room isn't going to magically put another $930 in our bank account anyways.

Are we behind on any of our payments? NO. Have we had anything sent to collections? NO. Do we pay cash for our non-essentials like WDW? You bet. Would that cash be better paid on the credit card? Perhaps. However, we always pay at least twice the minimum payment as it is, we are not irresponsible. The extra interest we are accruing is OUR problem, no one else's. Your interest rates aren't based on my credit score.

And I will agree with you 100%..........many people myself included are a SINGLE income and do have trouble when things come up unexpectablely (like a new AC unit, or a new roof for the house) and it is very easy for those with 2 incomes living in 1/2 million dollar homes to point their fingers at the "little guy" who is really trying to make it and still have a little enjoyment...do I agree with the OP when people charge "status items, and overdo their vacations yes.........but there are those who are really trying to do the best they can...........I could charge the Poly when I go to WDW but no I go the cheapest I can just for a little get away. It's not always cut and dry what people charge and on what they spend on. I always pay my bills on time but yet I still have debt, It's not easy living on $40,000 a year especially with the cost of living now days. And by no means am I living in an expensive home, my mortgage is still cheaper then many 2 bedroom apts. in the area.

 

[FinallyBoughtDVC]

You know what annoys me?!!!

FAFSA - Financial Aid.

Take my family - we make a really decent living, have accumulated a large amount of savings (we take vacations, buy pretty much what we want, paid cash for DVC, swimming pool, etc. but also make a concerted effort to save, in other words... we don't spend every dime we make). We live in a beautiful neighborhood. Drive nice cars. etc.

Take my friend - all of the above is same (same number of kids, income, house in the same neighborhood, etc.). Except - they've spent every dime they've made.

They got financial aid for their daughter's college education. We got zero.

That's crap.

It seems almost like the system is set up to reward those who are irresponsible. Our expected family contribution was $52,800 yearly (seriously - I don't even know a college that costs that much). There's was $14,000.

That just pissed me off to no end.

I am not saying that either one of us "deserved" a free ride - but it's not equal.

In any event - my point of this very long post is that it seems like financial planning and responsibility are not rewarded, taught, etc. Everyone is looking for that short-term fix (it's almost like drugs - an instant high) and some just can't see the future past that.

 

[FinallyBoughtDVC]

Yup - I'm a student so I know hundreds of people who live way beyond their means.

They look at me like I'm crazy when I say I can't come out tonight drinking, I don't have enough money.

After rent and bills, I have $50 a week to live off. Food costs $30/week and I don't eat meat so it's just pasta, bread, milk, veggies...$20 a week doesn't get you much fun when it's $10 for a movie or $4 per drink or even $2 for a soda but I manage to live within my means!

I lived on Ramen noodles and white rice from the local Chinese food restaurant when I was in college. Also - a bag of egg noodles and one can of Chunky beef soup mixed together (I called it "slop") lasted almost a week!!

Parents who let their kids fend for themselves when they are in college are doing their kids a huge favor!! Unfortunately, as you well know, "kids" like you are a rarity.

 

[Kath2003]

I lived on Ramen noodles and white rice from the local Chinese food restaurant when I was in college. Also - a bag of egg noodles and one can of Chunky beef soup mixed together (I called it "slop") lasted almost a week!!

Parents who let their kids fend for themselves when they are in college are doing their kids a huge favor!! Unfortunately, as you well know, "kids" like you are a rarity.

I don't think it's anything to do with parental support, though - some kids get money from their folks and spend it sensibly and live within it. It's the ones who live beyond their income (whether they earn it or are given it by their parents) who get themselves into debt.

 

[chager]

We were actually just talking about this last night! We have friends that live in a house that is literally falling down around them, have cars that aren't running, and can barely afford to pay utilities. However in the last 3 weeks have spent alot to go out to some fancy dinner/dance thing and to go see someone in concert! You can't say anything to them because they become really rude, since they are ALWAYS right about everything. They have borrowed until no one will help them anymore. However they accuse us of always having to have new things! Let's see my couch is falling apart cause it is 8 years old, we very seldom go out anywhere that will cost to do it, we do have a new car because my father was generous enough to cosign after our car broke (The payments are actually less then the old payments), we try to take care of what we have. No big screen tv, the reason DS has a cell is we gave him DH's after his work supplied him with one. Yes DS now has a Razor phone, BUT it was FREE through a promotion/discount at my work. We have borrowed money from my parents and are working hard to repay it. They are the only reason we didn't lose everything after DH lost his job a couple years ago. We have no credit cards to back us up so we have to save for anything we want. It really bugs me to see poeple take advantage of others and to live live beyond their means. We had to adjust our spending habits after DH lost his job. His new job pays $10,000 less on the year. Boy it does make a difference! For instance we decided to drop cable in order to keep our cell phones. Both run the same amount per month. We could have one or the other but not both. Since DH travels sometimes and DS now is involved with alot of school activities we kept the phones. I guess what really makes me upset is that some poeple complain about not having money for bills after spending $$$$ on going to concerts and other things like that!

 

[m&m's mom]

You know what annoys me?!!!

FAFSA - Financial Aid.

Take my family - we make a really decent living, have accumulated a large amount of savings (we take vacations, buy pretty much what we want, paid cash for DVC, swimming pool, etc. but also make a concerted effort to save, in other words... we don't spend every dime we make). We live in a beautiful neighborhood. Drive nice cars. etc.

Take my friend - all of the above is same (same number of kids, income, house in the same neighborhood, etc.). Except - they've spent every dime they've made.

They got financial aid for their daughter's college education. We got zero.

That's crap.

It seems almost like the system is set up to reward those who are irresponsible. Our expected family contribution was $52,800 yearly (seriously - I don't even know a college that costs that much). There's was $14,000.

That just pissed me off to no end.

I am not saying that either one of us "deserved" a free ride - but it's not equal.

In any event - my point of this very long post is that it seems like financial planning and responsibility are not rewarded, taught, etc. Everyone is looking for that short-term fix (it's almost like drugs - an instant high) and some just can't see the future past that.

Finanacial Aid is based on income and some assets. It is NOT based on debt nor does it take that into consideration.
My DH owned a company that calculated Federal Aid and we are both very knowledgeable w/ the calculation.
There are certian types of loans that do not take into account financial situation but they are just that -loans.

 

[FinallyBoughtDVC]

Finanacial Aid is based on income and some assets. It is NOT based on debt nor does it take that into consideration.
My DH owned a company that calculated Federal Aid and we are both very knowledgeable w/ the calculation.
There are certian types of loans that do not take into account financial situation but they are just that -loans.

I'm talking about savings...

We saved.

They didn't.

They spent every nickel they earned on extras.

We made a concerted effort to save.

They got financial aid.

We didn't.

I never said anything about debt - I said they spent everything they made and saved nothing.

They were irresponsible and got aid.

We were responsible and got a bill.

That's wrong.

Not sure exactly what point your post was trying to make.

 

[ducklite]

I could probably fall into that category. I still owe a lot on my car, but I vacation every year. I could put that money towards paying it off faster, but I honestly can't imagine all work and no play. I'd go nuts!

There's a big difference between having a car loan (and mortgage) that you are making timely payments on, and ahving massive amounts of credit card debt--especially when people are robbing Peter to pay Paul. You aren't doing that, you are making payments on a secured loan and saving money then taking a vacation. That's not the person I'm talking about--nopt at all! I've got a car loan and a mortgage, and am takinga vacation this fall. That's not financially irresponsible at all!

Anne

 

[ducklite]

Are we behind on any of our payments? NO. Have we had anything sent to collections? NO. Do we pay cash for our non-essentials like WDW? You bet. Would that cash be better paid on the credit card? Perhaps. However, we always pay at least twice the minimum payment as it is, we are not irresponsible. The extra interest we are accruing is OUR problem, no one else's. Your interest rates aren't based on my credit score.

And you are not the type of consimer that I'm concerned with. You pay your bills, and if you had to make a decision between the credit card payment and a weekend at WDW, the credit card would win.

My concern is with the people who rack up thousands and thousands and thousands in debts that they have no way of paying off, and continue to live a lifestyle that is far beyond their means.

Anne

 

[m&m's mom]

I'm talking about savings...

We saved.

They didn't.

They spent every nickel they earned on extras.

We made a concerted effort to save.

They got financial aid.

We didn't.

I never said anything about debt - I said they spent everything they made and saved nothing.

They were irresponsible and got aid.

We were responsible and got a bill.

That's wrong.

Not sure exactly what point your post was trying to make.

There still is more to it as your W2 income has to be low to get grants these days. I have seen a big decline in income eligibility in the 24 years I have been in the Financial Aid business in one way or other.
They probably have lower income than you do (and obviously spend every penny).

 

[ducklite]

You know what annoys me?!!!

FAFSA - Financial Aid.

Take my family - we make a really decent living, have accumulated a large amount of savings (we take vacations, buy pretty much what we want, paid cash for DVC, swimming pool, etc. but also make a concerted effort to save, in other words... we don't spend every dime we make). We live in a beautiful neighborhood. Drive nice cars. etc.

Take my friend - all of the above is same (same number of kids, income, house in the same neighborhood, etc.). Except - they've spent every dime they've made.

They got financial aid for their daughter's college education. We got zero.

That's crap.

It seems almost like the system is set up to reward those who are irresponsible. Our expected family contribution was $52,800 yearly (seriously - I don't even know a college that costs that much). There's was $14,000.

That just pissed me off to no end.

I am not saying that either one of us "deserved" a free ride - but it's not equal.

In any event - my point of this very long post is that it seems like financial planning and responsibility are not rewarded, taught, etc. Everyone is looking for that short-term fix (it's almost like drugs - an instant high) and some just can't see the future past that.

IMHO FAFSA should not take savings into consideration. Income, number of dependents, and something to compensate for above or below average COL in various parts of the country, then bingo--there's the number. Means testing when it comes to savings, be it for FAFSA or other government programs is contrary to what the government keeps telling us to do. The quicker the politicians wake up and smell the roses on that one, the better off we'll all be.

Anne

 

[BalooTheBear]

I can't imagine having credit card debt that equaled my annual income, but I will also say that I have seen many people on this board be condescending towards anyone that has debt.

Do I LIKE having credit card debt? No. However, we live at an income level where a $1000 emergency room bill isn't going to get paid any other way. We don't have that kind of money sitting around to just write a check, it goes on the credit card. Do we cancel our weeked at AllStars at WDW to pay for it? No, we need the time away like anyone else does, and the $70 we would save on the room isn't going to magically put another $930 in our bank account anyways.

Are we behind on any of our payments? NO. Have we had anything sent to collections? NO. Do we pay cash for our non-essentials like WDW? You bet. Would that cash be better paid on the credit card? Perhaps. However, we always pay at least twice the minimum payment as it is, we are not irresponsible. The extra interest we are accruing is OUR problem, no one else's. Your interest rates aren't based on my credit score.

I agree that when unexpected bills come up and there are no other ways to pay for it - using a credit card may be the only way out... I've been there and have done that...

But, I just started reading a book by Dave Ramsey - The Total Money Makeover. In this book he explains how it is possible to live WITHOUT using credit cards. This is done by building up an Emergency Cash Money fund (min $1000.00 and max 3-6 months of monthly expenses). By using this fund when emergency, such as your unexpected trip to the hosipital, you stay away from going in debt of any kind.

Is it easy? No, it won't be easy to find a way to save that much money to save for rainy days. But, the credit card companies and banks make it so easy to fall into a high debt trap....

I recommend this book for those who really want to get out and stay out of debt....