Do you ever think that maybe part of the problem is reasonable financial skills are vastly under taught in schools and so as result people end up making budgets that seem sound on a surface level but fail to account for incidentals which leave you struggling to keep up with the lifestyle you budgeted for?
Also, even if you budget is perfect, accounting for incidentals as well as every single bill and having a savings which allows you room for growth or retirement, if your pay check doesn't raise at the same rate as inflation and you don't reform your budget accordingly, you are going to have the same sort of problem.
So well people l in bing beyond their means is something people need to take accountability for, its important to remember that people who are struggling are still struggling. And saying "you're problem isn't valid because mine is more severe " is always a dick move.
Dunno where you went to school but mine had nothing on finance, let alone it being a requirement. We did have calculus and statistics, but I wouldnt call those finance. Of course, I'm also in the deep south which should be explanation enough.
I mean- that sentiment more or less applies to most people right? My father taught to me to always have one car you own, and if you have only one- have one you can buy in cash. If life goes bad you can live in the car, and no one will repossess it for non payment. But- someone living in a one bedroom or with their parents complaining about bills- could we not say they could “downsize” too? Live in the car, shower at the rest stop/Park/etc. no more rent or heat or water or electricity bill no? To a homeless person doesn’t that person look silly complaining about “barely getting by”?
And then there’s the person upset about their debt. “I owe all this student loan..” “mortgage..” “car payment..” “credit card...” but there are people who can’t even GET credit. They can’t even open a phone or utility without putting a (usually large to them-) cash deposit on it. So by the fact your able to even be able to accrue debt means your doing better- and if you’re managing to keep up with your debt your doing better than someone who is unable to make payments and is upside down in debt right?
But isn’t that usually what people say about the poor too? That for whatever percent or whatever your view it’s “their fault.” They shouldn’t have taken the loan, the should have worked harder, they could have not bought this or that.... So to recap- people who make less than us but have financial challenges don’t get sympathy because they did it to themselves, people who make less don’t get sympathy because they did it to themselves. Our financial challenges though- those deserve sympathy, action, and attention because WE are the only ones who are somehow not accountable?
@jes5890 i live in oklahoma there is only one state deeper south, i was required to take a finance class to graduate. My friends from around the state were also required to take finance classes to graduate. Hell ive got friends from out of state that were required to take finance classes to graduate.
I live in Iowa and we were not required to take a finance class at all. In fact. My high school didn't really offer a fiance class. The closest thing you could take was an intro level accounting class. And almost no one did since it wasn't a practical class to take to fill any requirements for graduation
I get so frustrated every time I pick up a book on paying off debt that is like, "We paid off 100k of debt in 3 years while I stayed at home and my husband made ONLY 80K a year!" Oh, so you live how I already live but just happened to have more left after.
Well yes. That’s what debt is. The “richest” person in most cases will be the person with the most debt. Odd I know. That’s how a credit system works. Intuitively- if a friend borrows a dollar a day but only pays you back $5 a week- keeps borrowing but has nice shoes and a cool computer etc/ you wouldn’t say “I should give them MORE money.” You’d likely say “Stop buying shit and get your life together. I’m not lending you more money. Sell one of your games or something if you need cash to be able to buy lunch.” But credit works a little different.
See- you may not have $5k in cash sitting around, or you do but if you use it you’ll have no savings if something bad happens. I lend you $5k, you’re going to pay me back $5500. I like that. I’ll want to lend you money because I make money. That 2019 Car you want- you save up for 5 years and buy it cash, walk until you can afford it. Or you can pay me for 5 years and have it today. If you save for 5 years the one you want- the 2019 will be old. You probably won’t buy it. You’ll buy a 2023. Who buys the 2019 then? Less 2019 cars get sold if everyone is saving instead of buying.
And more important to the lender- instead of making profit for 5 years I make nothing. You’d actually keep more of your money that way- but you have to wait and that might not work for you- and I make no money and I don’t like that. The manufacturer sells less cars and they don’t like that either- since they have bills too.
When we go to things like real estate it gets interesting. Renting generally costs more per month than owning, no tax shelter, etc. you can save up for 30 years to buy your house- but where do you live in the meantime? You likely can’t afford to pay rent for your place and then save that same amount to make the goal savings- and in 30 years the house will likely be worth much more than it is now- and the exact one you want that is available now may not be right? So even if you save $1million for a $700k home, it might be more than $1million in 30 years.
But if you make the deal TODAY, at $700k, you’re locked to that price. You’ll pay interest but likely not as much interest to equal the price the home will go up in 30 years. But now you own a house. So you pay 10-20% down on the low end, make payments for a few years, on paper you’re worth almost a million dollars because you spent money. You can even take a loan against your home and buy another one. Rent it out, someone else pays the loan on the second home, you keep the property and are now worth almost $2 million. Once the properties are paid off- the rent becomes income, and by then their values have likely increased as well- meaning you could also sell at a profit- and if inclined go buy cheaper properties and pay cash- do it again with profit from the start.
The amount of credit you can get for other things is huge too. You’ve got millions in dollars in collateral so a bank will give you money based on the fact that you can pay it back. You die- your kid(s) inherit, they start off with everything you had- on 2 $700k (now likely $1.1 million) houses- renting those out is at least $2700 a month each in income. Meaning without their jobs or any property they might own they make $64,800 a year just for doing basically nothing.
This system is used by pretty much everyone using credit in some way or another. It’s more obvious at higher income- where we see a person who makes $60k living a lifestyle more like that of someone making tens of thousands more- or even double if they use their credit well. It’s harder to see in people who make less- but a person making $20k a year and using credit lives to a higher standard than a person making $20k and not using any credit. At $20k, take home let’s say $16k. Rent of $600 a month- leaves $8800- that’s $733 a month to live off of. They can’t afford a $10k car. How much can you put in savings making $733 a month for all your bills and expenses? Maybe $100? MAYBE?
At that rate even a very cheap used car would be years to buy. A new bicycle in the mid range could take a year. Or... they could buy something on credit and pay $20-50 a month on a nice bike, while their non credit peer would take a couple months to save for a used bike off CL. The $100 CL bike might sell for $50-100 in 5 years. The nice fancy bike might sell for $300 or so. The non credit person would be back where they started or behind where the person using the credit would have $300 towards another bike- could use none, get it on credit, use that to make payments, keep $100, new bike with no pit of pocket costs and $100 to spend elsewhere.
But likewise- the person making $80k, if they just bought 2 properties, might look like this: take home pay $56,000. Homes: $2200x2, that leaves them $200 a month any month the second property isn’t rented. Assuming it is always rented and it’s a reasonable market they will likely break at least even so now they have $2400 a month. But property taxes will likely be about $1046 a month in expenses. So now we are down to $1400. let’s say the second home wasn’t 20% down- the PMI etc. works out to about $600 leaving them $800 a month to live off of. As home owners and renters there are all upkeep costs as well. So all in all- while “richer” the $80k example would actually be living much tighter than the the person making less- until the investments matured.
That was the longest miss of a point I've ever seen. What I w was trying to say is I have a bunch of debt but it seems that every, "If WE can do it by being frugal anyone can!" plan I find turns out to be people being the same amount of frugal I am but they make more.
Ah. Apologies. I didn’t realize you were just venting and weren’t looking for others reasoning. I caught your point- you may have missed mine, but it seems irrelevant as you don’t appear to want to discuss the issue and I will respect that.
Also, even if you budget is perfect, accounting for incidentals as well as every single bill and having a savings which allows you room for growth or retirement, if your pay check doesn't raise at the same rate as inflation and you don't reform your budget accordingly, you are going to have the same sort of problem.
So well people l in bing beyond their means is something people need to take accountability for, its important to remember that people who are struggling are still struggling. And saying "you're problem isn't valid because mine is more severe " is always a dick move.