When will people come to their senses financially?

[C.Ann]

How can he sell them? Who wants to buy things like that right now? I'm sure they bought that stuff before he lost his job.

More than likely, he can't.. So many people are in the same boat now there just isn't a market for his "toys".. But - whenever someone posts on the DIS about a financial issue, people come crawling out of the woodwork to tell the OP to "sell their home" and move to "XYZ" if they can't afford to live where they're living now - or if they can't find a job, move someplace else - and on and on.. Ummm.. Anyone looking at the housing market these days? If people could afford to sell their homes and move, I would assume they would do it.. Toys? Who knows what the payments are on those things - and if they're not paid off, no one is going to come swooping in and buy them for enough to pay the loans associated with them..

Seriously - if the "solutions" were as easy as some people make them out to be here, there wouldn't be a problem.. That's the "real" message..

 

[eliza61]

And this is why I actually read my mortgage and before shopping for a home figured out what I could afford. If someone is unable to do this for themselves hire someone. A little money up front to avoid financial ruin later seems to make sense. A salesman, whether they are selling you a car or a house, can lie to you but the contract doesn't.

I was pre-approved for a mortgage that would have bankrupt me in a year had I taken the max they offered but just like I can turn down heroine or child porn I turned down that mortgage. Why is it people forget they can say no to banks and credit card companies?

There is a big difference between an unexpected set back (illness, loss of job) and poor planning or money management (sure, a 1:1 revolving debt to income ratio or maxing out a credit card for an unnecessary purchase). Also, listening to spend spend spend from people with vested interest in your spending makes no sense at all. The crack dealer isn't going to tell you to stay off of drugs, is he? When the economy is going good at least some of the income should be put aside for when the economy goes south. This is a perfect example of an ounce of prevention being better than a pound of cure.

I wish it was that easy Frank. It's one of those things where on paper it makes really good sense but in reality the practice is totally different. I mean I like to think I'm a smartie pants (M.S. in Chemistry, not to shabby) but I gotta tell you with all honesty, did I read my mortgage contract fully? Yes, did I understand the language? Not a chance.

I didn't accumulate tons of debt probably because my parents were big on living within our means but I also was not a big saver. dh & I routinely pulled down a big salary and spent it. we travelled, ate out, brought big cars etc, etc. sure we paid for it but in the 80's the mindset was definitely show your wealth and spend. I did not know one person in their 20's who was contributing to a 401k, heck I didn't evene know what an IRA was until I was 30'ish. It wasn't until we had kids that we figured we get our collective bottoms in gear.

And really after 30-40 years of a booming economy who really thought the bottom would fall out like this?

 

[disykat]

Bottom line is, as long as it's not illegal people are free to make whatever choices they wish to make as long as they can live with the consequences.

I would agree with you there - but where is the "living with the consequences" part?

Usually the motivation of the OP of any of these kind of threads I'm guessing

"Gee look how smart I am and how stupid they are"

There but for the grace of God, and really NO ONE knows what really goes on behind anothers front door

I disagree. I think the motivation is frustration. It is hard to feel like people are getting away with living with more luxuries than you can possibly afford - knowing full well they aren't paying for them!

The OP was quite clear she wasn't talking about people who are experiencing job loss and losing homes due to hard knocks in a hard economy. She was clearly talking about people who overspent and now are being advised that it is better to keep as much debt as possible so they will get MORE debt forgiven in rescue programs. How can that NOT be frustrating? It makes me sad if people are being advised to "keep their boats" at the expense of people with real problems that need those programs. It's one thing not being able to sell a boat, it's a whole different thing to be advised not to try to sell the boat because you might get to keep it without paying for it.

 

[Luvchefmic]

I would agree with you there - but where is the "living with the consequences" part?



I disagree. I think the motivation is frustration. It is hard to feel like people are getting away with living with more luxuries than you can possibly afford - knowing full well they aren't paying for them!

The OP was quite clear she wasn't talking about people who are experiencing job loss and losing homes due to hard knocks in a hard economy. She was clearly talking about people who overspent and now are being advised that it is better to keep as much debt as possible so they will get MORE debt forgiven in rescue programs. How can that NOT be frustrating? It makes me sad if people are being advised to "keep their boats" at the expense of people with real problems that need those programs. It's one thing not being able to sell a boat, it's a whole different thing to be advised not to try to sell the boat because you might get to keep it without paying for it.

I can't for the life of me understand why it even concerns anyone what goes on with the neighbors..ok OP said the neighbors bankruptcy atty advised them to keep their toys....thats what OP says the neighbor told them I guess, you really only know what the neighbors WANT you to know...they could be lying about her income for example...I still maintain that no one knows what is really going on in anyone elses home

 

[C.Ann]

It's one thing not being able to sell a boat, it's a whole different thing to be advised not to try to sell the boat because you might get to keep it without paying for it.

I would like to know just who it was that offered this "advice" - because if the "toys" aren't paid for in full, it's highly unlikely they are going to be able to keep them.. The house? Maybe.. Toys? Not likely.. Vehicles? Iffy..

Sounds to me like these people might have been in contact with one of those "debt solution" yokels who promise the moon, charge an arm and a leg for their "expertise", take your money, and run..

I don't think the OP has enough inside info to be making the assumptions that are being made..

 

[mhsjax]

I would agree with you there - but where is the "living with the consequences" part?



I disagree. I think the motivation is frustration. It is hard to feel like people are getting away with living with more luxuries than you can possibly afford - knowing full well they aren't paying for them!

The OP was quite clear she wasn't talking about people who are experiencing job loss and losing homes due to hard knocks in a hard economy. She was clearly talking about people who overspent and now are being advised that it is better to keep as much debt as possible so they will get MORE debt forgiven in rescue programs. How can that NOT be frustrating? It makes me sad if people are being advised to "keep their boats" at the expense of people with real problems that need those programs. It's one thing not being able to sell a boat, it's a whole different thing to be advised not to try to sell the boat because you might get to keep it without paying for it.

Actually someone did lose their job. As far as being told by the attorney to keep certain things, I am pretty sure that bankruptcy laws are very strict, but I don't know. I thought that you were only allowed to keep certain things after all is said and done, but I could be very wrong. also I think that you aren't supposed to sell stuff if you are claiming bankruptcy.

 

[FireDancer]

I can't for the life of me understand why it even concerns anyone what goes on with the neighbors..ok OP said the neighbors bankruptcy atty advised them to keep their toys....thats what OP says the neighbor told them I guess, you really only know what the neighbors WANT you to know...they could be lying about her income for example...I still maintain that no one knows what is really going on in anyone elses home

I think it is more about the cumulative effect of so many people doing it then a case by case thing. Sure, knowing exactly what a specific person is going through is pretty tough if you don't have firsthand knowledge but what the over use of debt has done to the economy (and I include mortgages in that category) isn't so abstract.

 

[Sparx]

Considering there is no market for boats or 5th wheels right now, I'm not sure what I'd be expecting my neighbor to do other than hang onto it.

And I'm not going to say what kind of car I'm driving; I'm not wearing flame proof clothing.

I don't have the money laying around to buy his things, do you OP?

 

[Luvchefmic]

I think it is more about the cumulative effect of so many people doing it then a case by case thing. Sure, knowing exactly what a specific person is going through is pretty tough if you don't have firsthand knowledge but what the over use of debt has done to the economy (and I include mortgages in that category) isn't so abstract.

Personally I don't know anyone who has any fancy cars or other toys or anyone that went for a mortgage that they couldn't afford (until jobs were lost.) Do I know what is going on with my neighbors ? I count the foreclosure signs, I see the sheriffs subpoena unit constantly in the neighborhood, I see people being turned away at food banks

I don't see the economy being the way the way it is by the average Jane & Joe's actions I see it as people being afraid to hire because they're not sure what the government will demand from them. These threads frustrate me too because it always comes down to people that lived beyond their means and maxed out credit lines and lived like there was no tomorrow. I don't know anyone like this.

 

[MoniqueU]

My guess is not all the people are learning the same lesson some of us are. That no you don't "deserve" everything you want. I see time and time again on the Dis someone posting that they are in a finacial mess in one breath then in the next saying they "deserve" a vaction. I am rreally finding out what I need in life lately and not what I deserve. I don't pretend to know what someone elses finacial situation is but if they make a public post on public message board I might have some comment on it. That being said I wish nothing but the best for everyone.

 

[Mary•Poppins]

and this is why i actually read my mortgage and before shopping for a home figured out what i could afford. If someone is unable to do this for themselves hire someone. A little money up front to avoid financial ruin later seems to make sense. A salesman, whether they are selling you a car or a house, can lie to you but the contract doesn't. People can't take advantage of you if you don't let them.

I was pre-approved for a mortgage that would have bankrupt me in a year had i taken the max they offered but just like i can turn down heroine or child porn i turned down that mortgage. Why is it people forget they can say no to banks and credit card companies?

There is a big difference between an unexpected set back (illness, loss of job) and poor planning or money management (a 1:1 revolving debt to income ratio or maxing out a credit card for an unnecessary purchase). I'm not under the delusion that everyone that is in financial trouble is there because of poor planning or bad decisions, but many are.

Also, listening to spend spend spend from people with vested interest in your spending makes no sense at all. The crack dealer isn't going to tell you to stay off of drugs, is he? When the economy is going good at least some of the income should be put aside for when the economy goes south. This is a perfect example of an ounce of prevention being better than a pound of cure.

+1

 

[FireDancer]

Personally I don't know anyone who has any fancy cars or other toys or anyone that went for a mortgage that they couldn't afford (until jobs were lost.) Do I know what is going on with my neighbors ? I count the foreclosure signs, I see the sheriffs subpoena unit constantly in the neighborhood, I see people being turned away at food banks

I don't see the economy being the way the way it is by the average Jane & Joe's actions I see it as people being afraid to hire because they're not sure what the government will demand from them. These threads frustrate me too because it always comes down to people that lived beyond their means and maxed out credit lines and lived like there was no tomorrow. I don't know anyone like this.

I do know plenty of these people. Some personally and thousands more because, as the I.S. Coordinator for a financial institution, I see the reports that paint the big picture. I have access to the numbers and credit scores from new loan applications and defaulted loans. I can see credit card balances and how they compare to income.

It makes it much easier to have a realistic overall picture when you are not just looking at anecdotal evidence from friends and family but at concrete industry numbers from a very large population. And our institution is trending way better in regards to defaulted loans then the national average. I can only imagine what some of their BI reporting looks like.

Again, not everyone is in the position they are in by their own hand, but a lot are.

 

[wdwfan16]

Personally I don't know anyone who has any fancy cars or other toys or anyone that went for a mortgage that they couldn't afford (until jobs were lost.) Do I know what is going on with my neighbors ? I count the foreclosure signs, I see the sheriffs subpoena unit constantly in the neighborhood, I see people being turned away at food banks

I don't see the economy being the way the way it is by the average Jane & Joe's actions I see it as people being afraid to hire because they're not sure what the government will demand from them. These threads frustrate me too because it always comes down to people that lived beyond their means and maxed out credit lines and lived like there was no tomorrow. I don't know anyone like this.

Yes many companies are scared to hire because of all the recent government laws passed. Companies are sitting on trillions in cash they are scared to spend. I believe once the next election is over and the companies feel more at ease that some of the laws will be altered they will hire again, but that won't be before 2011.

I heard the other day on TV that the experts don't expect unemployment to go below 9% until June 2011.

With that said many average Joes and Janes did contribute to the problem. They bought expensive cars, got mortgages that capped out their income, used CCs to get luxuries that were out of their reach. How many now have to have an expensive pet - pure bred dogs and horses come to mind.

In the 90s the middle class spent like the upper class use to spend and the lower class spent like the middle class did.

Growing up nobody I knew had a vacation home. Then I met my first person but they were a multi-millionaire. They could afford it. Now every where I turn middle class people have vacation homes.

 

[Luvchefmic]

Firedancer & wdwfan16

I guess I only know working poor average Jane & Joes....no vacation homes, live paycheck to paycheck, ones that had 401Ks either lost it all or took it out to meet the daily living expenses when a job was lost, didn't max out any credit lines or most of us don't have credit cards.. there is only so much you can cut or sell you know? and since you mentioned dogs & horses, yes we have dogs & a horse ALL rescues, can we afford them NO but the original rescues won't & /or can't help and even animal control wants $100 per dog for surrender if I wanted to go that route

I think basically what I am trying to say...and probably poorly ..is that we all see the TV shows & people are in a bad way financially by the way they chose to live beyond their means I just don't know any. I think most of us on in trouble because we had lousy paying jobs to begin with and never had a "back up plan" because there wsn't really any extra money...Suze Orman, Dave Ramsey, they don't live in my world...just the suggestion of how much should be in an emergency fund is almost laughable its so unobtainable.

 

[mhsjax]

Yes many companies are scared to hire because of all the recent government laws passed. Companies are sitting on trillions in cash they are scared to spend. I believe once the next election is over and the companies feel more at ease that some of the laws will be altered they will hire again, but that won't be before 2011.

I heard the other day on TV that the experts don't expect unemployment to go below 9% until June 2011.

With that said many average Joes and Janes did contribute to the problem. They bought expensive cars, got mortgages that capped out their income, used CCs to get luxuries that were out of their reach. How many now have to have an expensive pet - pure bred dogs and horses come to mind.

In the 90s the middle class spent like the upper class use to spend and the lower class spent like the middle class did.

Growing up nobody I knew had a vacation home. Then I met my first person but they were a multi-millionaire. They could afford it. Now every where I turn middle class people have vacation homes.

I am in what I consider to be a sort of slightly upper middle class area. Some are very upper middle class most of us aren't. I don't know anyone that has a vacation home and in fact most of us aren't spending money like crazy, yet we are very high in fore closures and I know a lot of people that have lost their jobs and can't seem to find ones to replace them. They don't have horses, yes they may have dogs but I am not sure about pure breds. Not everyone spent everything and some actually saved but they are in tough shape. I do get so tired of the basing on here about everyone spending all their money, we really don't know. I am sure that a lot of people have, but not everyone.

 

[Colleen27]

We are in the middle of what may be one of the worst recessions ever, yet some folks just can't seem to sort out what items they should be spending their limited money on, and what things they should pass on.
Maybe I've just watched too many of those financial shows on cable.

For example, my neighbor who lost his job 8 months ago, fortunately his wife has a good job (she makes more by herself than my wife and I do combined) , and they may lose their house because they can't make the payments. Yet he won't get rid of his boat, his 5th wheel travel trailer, the $50,000 diesel pickup to tow the trailer, his $35,000 off road Jeep because "he wants those things" and some bankruptcy attorney told them to hang onto all the debt they could because it will help them get more debt forgiven. I sincerely think if he sold his toys, they could pay all their necessary bills.
When will folks realize that an i-Phone with a data plan it not necessary if you can't pay your rent or mortgage.
When will folks realize you don't need a big screen TV, or a new car every 6 or 7 years.
And why do put so much blame on corporations for extending credit where they shouldn't have. Corporations don't make those decisions, PEOPLE who approve the loans do, and PEOPLE decide to accept them, even if they should clearly know they can't afford it. I watched an interview with a couple who got a $1700 a month mortgage, with $1600 a month in income, and didnt understand how they had ANY responsibility in the issue.
Off my soap box, thanks

People put the blame on corporations because they are the experts/professionals who should have known better. Yes, individuals should know better as well, but they aren't financial professionals and tend to see things through rose colored glasses, taking on obligations based on assumptions like overtime continuing, COLA raises coming as scheduled, etc. The whole purpose of a loan officer is to cut through that emotional/hopeful stuff to look at the hard numbers, and for a time the lending industry shrugged off that responsibility.

As far as selling the toys goes, odds are he can't if he still owes on them. Resale values of things like that are in the toilet right now, and most lenders won't accept a sale for less than the amount owed unless they have the cash up front to cover the difference.

 

[wdwfan16]

Firedancer & wdwfan16

I guess I only know working poor average Jane & Joes....no vacation homes, live paycheck to paycheck, ones that had 401Ks either lost it all or took it out to meet the daily living expenses when a job was lost, didn't max out any credit lines or most of us don't have credit cards.. there is only so much you can cut or sell you know? and since you mentioned dogs & horses, yes we have dogs & a horse ALL rescues, can we afford them NO but the original rescues won't & /or can't help and even animal control wants $100 per dog for surrender if I wanted to go that route

I think basically what I am trying to say...and probably poorly ..is that we all see the TV shows & people are in a bad way financially by the way they chose to live beyond their means I just don't know any. I think most of us on in trouble because we had lousy paying jobs to begin with and never had a "back up plan" because there wsn't really any extra money...Suze Orman, Dave Ramsey, they don't live in my world...just the suggestion of how much should be in an emergency fund is almost laughable its so unobtainable.

Would you consider a factory worker husband and a legal secretary wife to be rich? I don't but they have a vacation home on the ocean (one street back). This husband is now working ~250 miles from home and only comes home once a month. They still have the vacation home and the wife is there every weekend.

Or a factory worker husband and a retail wife have a vacation condo by the ocean (three or four streets back). This husband lost his job and then the condo.

 

[C.Ann]

I guess I only know working poor average Jane & Joes....no vacation homes, live paycheck to paycheck, ones that had 401Ks either lost it all or took it out to meet the daily living expenses when a job was lost, didn't max out any credit lines or most of us don't have credit cards.. there is only so much you can cut or sell you know?

This is just another one of those subjects on the DIS where sweeping generalizations are always made - based on what one person "thinks" they know about their neighbors-parents-friends-IL's-sisters-brothers financial situations - without actually "knowing" knowing..

Seems the neighbor - in this case - made one comment to the OP - and all of a sudden OP knows what their finances are down to the penny - as well as the perfect "solution" for them.. You see this sort of thing here - and on the BB - pretty much every day.. If only things were exactly how they "appear" to be - but often they're not..

Unless someone asks me for a personal loan, I don't see where it's any of my business what my neighbors - or anyone else - does (or doesn't) do with their money..

 

[mhsjax]

Firedancer & wdwfan16

I guess I only know working poor average Jane & Joes....no vacation homes, live paycheck to paycheck, ones that had 401Ks either lost it all or took it out to meet the daily living expenses when a job was lost, didn't max out any credit lines or most of us don't have credit cards.. there is only so much you can cut or sell you know? and since you mentioned dogs & horses, yes we have dogs & a horse ALL rescues, can we afford them NO but the original rescues won't & /or can't help and even animal control wants $100 per dog for surrender if I wanted to go that route

I think basically what I am trying to say...and probably poorly ..is that we all see the TV shows & people are in a bad way financially by the way they chose to live beyond their means I just don't know any. I think most of us on in trouble because we had lousy paying jobs to begin with and never had a "back up plan" because there wsn't really any extra money...Suze Orman, Dave Ramsey, they don't live in my world...just the suggestion of how much should be in an emergency fund is almost laughable its so unobtainable.

Not to mention that so many people with 401's (and we do) have gone from thriving to down to almost nothing. That doesn't include the companies that have really messed with people retirement. Or like here where I live we had a Ponzie scheme going and this guy got tons of people (mostly gov't workers and police and firemen) to invest their retirement money and he was backed by a reputable company, he had them fooled also. Now some of them have nothing. I guess they should have spent less and they would be fine.

I am lucky, we have had quite a pay cut, I mean huge pay cut, but we are surviving, and without going into details it will never go up again. But we are still very lucky, some people have no income what so ever.

 

[tvguy]

I prefer to spend my time taking care of my own financial matters - rather than worrying and/or complaining about what others are doing with their money - especially people I don't know a whole heck of a lot about..

Except that this will impact my financial matters and your financial matters because guess who pays for someone else's bankruptcy, you and I and everyone on this board.