We own our home, I own my car and my wife owns her car. We carry no debt except a monthly balance Visa and Amex for travel points which we use instead of cash.
We could easily move to an upscale neighborhood where many of our friends live and carry a small mortgage or drive a newer upscale vehicle but we prefer to have our cash liquid, to use for warm winter holidays and larger expenditures such as house maintenance and upgrades. In other words we refuse to be ‘house poor’. Our vehicles are modest, a 98 Windstar and a 93 Tribute, as is our house at 1900 square feet.
My wife and I both work and earn modest incomes and we have two teenagers to support. We really like the comfortable feeling of having cash in the bank, both liquid and in registered savings. Before I was married I used credit like it was cash in the bank, first my mother bailed me out when I maxed out and was just paying the minimum balance and then when I got married all our wedding money was used to pay my accumulated debt when I hadn’t learned my lesson the first time. My wife has always been a saver and I vowed to never get into financial trouble again. Funnily enough it would be my wife’s decision to ‘move up’ any time soon, and not mine.
I’m sure there are many families that are fiscally responsible but I’d like to know of experiences where savings and then debt were used to maintain a ‘false’ lifestyle for the attainment of status or prestige. I’m not preachy or judgemental in any way, just curious to understand how strong the need is for some people.
They are all people in our early twenties just starting a career. Many of them are still relying on their parent’s help or using their savings and early inhertences- a few of my friends are burning through their inhertences pretty quickly. Mostly they arn’t living lavish lifestyles- bus travel, rented rooms in shared apartments and keeping an eye on the food budget are still the norm. They are just trying to pay California rents while they deal with the post-college doldrums and trying to find a job that will cover expenses.
Most of them would like to get a handle on their lives and start living within their means, but they don’t trust that they can find a sustainable job and still achive some small degree of the dreams they had in college. They’ve gotten used to a certain minimal lifestyle in college, and it’s hard for them to accept the huge hit that living within an entry level job would bring. So instead, they spend and hope their lives pick up at some point.
My wife tried to get a credit card (Visa) with a minimal limit in her own name a couple of weeks ago - she’s an associate on my cards - and was refused because she lacked a credit history. She had to actually resort to contacting the bank manager to ok the application.
So whats the deal with all the stories I’ve heard about offers for pre-approved credit being mailed out to children, is it purely an urban myth? I wonder.
I don’t know about little children, but when my first went to college last year she must have gotten 20 solicitations for credit cards. The majority said that she was pre-approved. At that point in time, the only bit of history she would have had was her student loan application.
I know a ton of people who cry poor or at least talk about how broke they are - then go shopping as a pick-me-up when they’re feeling blue.
There’s several gals where I work who claim they don’t know how to cook at all and swear they eat Healthy Choice for dinner every night - who then drop hundreds of dollars on cooking crap at Pampered Chef parties. Don’t get that at all.
College is different, though. Credit card companies have no problem giving cards to students when they would deny a person with the same score who wasn’t in school.
I don’t know why, either. The most irresponsible people with money are usually students, IME.
They do it 'cause they figure mommy and daddy will bail the kids out when they get over their heads. Plus they build loyalty with a batch of new consumers. Actually, it’s a good idea to get a credit card in college if you’re not totally irresponsible, since it can be tough to get credit with no credit history otherwise.
I don’t know anyone who lives beyond their means, and that surprises me. Most of my friends don’t use credit except for major stuff like a car or a house mortgage.
Maybe it’s different in rural areas, where there’s no one to show off to. :
Mr. Frail and I live within our means, and that’s why we look poor to most of our peer group. I’m sick of having friends complain about being poor when they eat at a restaurant 5 nights a week (even if it’s Subway–at-home food can be cheaper), always have a full fridge of beer, attend concerts every Friday night, and possess a DVD collection that rivals Blockbuster’s.
I’m hoping that, in a few years, things will pay off for us, and the debt we don’t have will allow us to be A) mentally comfortable and B) physically comfortable. However, our friends keep getting mom and dad to pay for their crap, and we live in NYC, so…
Too many of my friends are living beyond their means (fifty inch flat screen TVs bought with credit cards, etc). Not only are most of them not saving, but I know one who has actually borrowed against his 401(k) to make purchases, which is about as financially irresponsible as you can get. Another big spending co-worker does not participate in the 401(k), telling me he’s Vietnamese, they don’t really believe in that sort of thing, his kids will take care of him like he is taking care of his parents. I hope he’s right, but his kids were born here, and may have different attitudes 25 years from now!.
We are big savers, my goal is retirement by 52. In fact, some have described me as “cheap” :dubious: .
My sister and her boyfriend seem to do this. They live together, but she comes home a couple times a week to eat and do her laundry. She also gets food to take with her.
However, they eat out a lot, it seems, they go to the movies often and recently her boyfriend got three bonus paychecks. What did he do? Spent it on a video game system and a buttload of games.
I work with a woman who, IMO, lives beyond her means. She has two teenage kids, divorced, works as a sales rep on commission, which is feast or famine. She told me she buys the latest name brand clothes for her kids because she wants them to “fit in” to the school they go to, where the kids come from families with much higher incomes. She drives a newish car that she’s still paying off, plus buys all the latest gadgets and goes to lunch almost every day. The house she lives in has a huge mortgage, plus credit card bills (I imagine). She’s filed for bankruptcy once, and is about 10 years younger than me.
She borrows money from her mother and sister to stay afloat. Two weeks ago, the company that bought us told the sales reps they were cutting their commission scale, so they will be taking at least a 10 percent pay cut. I worry about her.
I’ve never understood parents like this. “Hey kids, all that really matters is whether or not you look good! Don’t expect to make friends based on your mind or your personality! The people you want to hang out with are the ones who’ll judge you on how much your parents make!”
The trend of parents wanting their kids to fit in so badly that they’re sending the wrong message scares me. In high school, I worked with a woman whose daughter was popular and one grade ahead of me. This mother disapproved of a lot of what her daughter did but basically did away with rules. She figured that if her daughter wasn’t allowed to go out and party with the in crowd whenever she wanted, she wouldn’t fit in. It was pretty sickening.
My younger daughter got a credit card solicitation, and a card, before she went to college. No problem - she worked two jobs this summer to save up money.
As for the OP, I think most people around here are living beyond their means. In
Silicon Valley, a substantial number of people are spending 50% of their income on housing. There are a lot of BMWs, Lexi and Mercedes around here - I know if I were driving cars like that I’d be in debt, and I make more than average.
My older daughter actually got interested in behavioral economics after her boyfriend’s parents responded to the father being laid off by buying a new car. She just didn’t get it, neither do I.
We are very careful to live beneath our means. We’re working very very hard to pay off some debt before we start having children. Most of the people we know are living below their means, or I’d like to think. But one of DH’s coworkers (who makes relatively the same as my DH) is always lamenting about money. Yes, it’s true that he and his wife have debt, but geez, you think you could give up Netflix, or cable, or your second cell phone, or not drive to work which is only two freaking blocks away in your gas guzzling truck!
Ok so we’re a little bitter and annoyed.
We’re trying so hard to tactfully and gently suggest that they think about where their money is going, but it only turns into a rant by him about how he should be paid more and his employer is a cheap-ass…
Oddly, I only really know one. Bills constantly late or unpaid, never enough money to make sure they make rent, but the moment they have a windfall, they go out and buy luxury stuff. I know that for her, she grew up equating buying = pleasure, even stuff (she admits) makes no sense to buy. For him, he just gets so excited that he actually has money, he just assumes he’ll have more when he needs it. Over 10 years of this not being so hasn’t taught him anything.
I love 'em dearly, but they moved a few hours away some years back, and the fact that they can’t afford to ever visit folks back here, and I can’t really budget the extra gas to see them on a regular basis (yes, there’s a difference- I keep a budget) makes it hard to connect with 'em.
My 13 year old daughter attends a large JH where many of the kids come from wealthy homes and there is definately pressure to conform to dress styles and brands, etc.
We realize her desire to fit in to the popular group and have cut her slack with regard to clothing, accessories and make-up purchases. We budget her purchases and there is also co-pay for some higher priced items. She babysits to contribute.
She has told us that she wants to live in a ‘mansion’ when she gets married and we always encourage her to dream ‘big’, which is to say be successful in life. Our family’s modest lifestyle should keep her well grounded though, we hope.