Things that make me just shake my head

[disneysteve]

My daughter is a senior in high school. So is the daughter of one of my employees. We are in pretty good financial shape. We earn a 6-figure income, have almost no debt and just a small mortgage. She earns far less, has a garnishment on her pay for something (I don't know the details), has credit card debt, leased a brand new SUV last year, etc.

Both of our daughters bought their prom dresses in the past week. She went to a specialty shop about an hour away. Mine went to Macy's at the local mall. She spent $379. Mine spent $69.50.

Not too hard to figure out why some people just "can't get ahead".

[bjl584]

Some of the lowest paid people at my work drive the most expensive cars and trade them in the most often.

I'm sure that we all experience things like this. Where you can just scratch the surface of someone's life and habits and realize why they are in the situation that they're in.

[disneysteve]

Some of the lowest paid people at my work drive the most expensive cars and trade them in the most often.

They are far more likely to lease in my experience. They're sucked in by the low monthly payment, ignoring the fact that they are signing up for endless payments and never actually owning anything.

[JoeP]

Poor financial judgment does not discriminate based upon income. Problem is, there is no immediate punishment for poor decisions, and lenders even will give you more rope. I deposited a check today and the teller asked me if I received the mailing about the home equity line of credit offers.

Some people live for the day, and maybe don't see the need to save. If they've borrowed all their lives, then maybe they plan on borrowing to make it through retirement as well.

I think people here see the value of saving so that their retirement years aren't consumed with constant worry of how to pay the bills.

[bennkar]

I don't remember when/where I first heard this, but.... "You can't fix stupid". So many people have no self control, its amazing. A co-worker of mine needed to get a new car about 4 years ago, and even though he knew better he got one of the most expensive Camaro's out there at the time. He even told me he could imagine what I would say when I found out he bought it . Now he is in crazy debt, his wife went back to college for a degree, and the many "one time" expenses have come up since then. And he has even considered getting rid of the car.

Compare that to my mother I visited this past weekend to put a new roof on her house (to save serious money). She wanted to go out to eat, but would only go to where she had a coupon (not that I minded - she paid). She has enough money (and will spend it when she needs it), and while not rich she will certainly have enough for many many years to come.

[rennigade]

Im starting to think the financially irresponsible people are smarter than I am. They buy whatever they want, run up massive amounts of credit card debt...then eventually file for bankruptcy.

If you think about it...whats the incentive to save when you can get a clean slate with minimal punishment. Oh no...dont slap them too hard on the wrist. 7+ years bad credit...oh my gosh the horror.

[disneysteve]

Im starting to think the financially irresponsible people are smarter than I am. They buy whatever they want, run up massive amounts of credit card debt...then eventually file for bankruptcy.

If you think about it...whats the incentive to save when you can get a clean slate with minimal punishment. Oh no...dont slap them too hard on the wrist. 7+ years bad credit...oh my gosh the horror.

Yes, but what happens to them in the future? They end up trying to live on nothing but Social Security in retirement and that's not pretty. Either that or they are stuck still working when they're 80. I have a lot of patients like that. So no, I don't envy the irresponsible folks.

[Weird Tolkienish Figure]

They are far more likely to lease in my experience. They're sucked in by the low monthly payment, ignoring the fact that they are signing up for endless payments and never actually owning anything.

I don't think leasing the financially irresponsible decision everyone else thinks it is. A car is a depreciating asset. Basically the same as renting an apartment. You lease until you get the car down in price enough when you can afford it without going into real debt. What am I missing here?

[JoeP]

She has enough money (and will spend it when she needs it), and while not rich she will certainly have enough for many many years to come.

Not to one-up you, but I know a very rich woman who left her home in the hands of a house sitter for a couple weeks while she traveled. During her absence, the place lost power for a few days, and everything in the fridge and freezer spoiled and had to be thrown out. Upon returning and learning of this, she actually rummaged through the trash to recover the spoiled meat. You'd think having money would at least enable a somewhat easier life, but some people cannot get past the constant state of saving and not spending...she died having not used barely any money, and left it all for her kids. Maybe that's what she wanted?

[disneysteve]

I don't think leasing the financially irresponsible decision everyone else thinks it is. A car is a depreciating asset. Basically the same as renting an apartment. You lease until you get the car down in price enough when you can afford it without going into real debt. What am I missing here?

If you have to lease for two or three years before the car's value is something you can afford, than you are driving a car that is beyond your means. Why not just buy the 3-year-old used car in the first place? You will spend the same amount on the purchase and not blow the 3 years of lease payments.

[snafu]

Article in today's paper about the ever increasing percentage of seniors getting reverse mortgages. The bank lends up to 40% of the value of fully paid off home. Seniors needn't make payments but if they go to assisted living or apt. etc, the home reverts to the bank. I'm not sure of details for settlement but the banks seem to really like this newer money maker.

In my experience, the people who drive vehicles they can't afford, buy expensive clothes way beyond what is reasonable based on their income and run revolving credit to the max seem to need to buy to satisfy some hole in their emotional life. They seem convinced if they buy the right brand of shirt or the same shoes as their favourite sport star or drive a great car it will boost their self esteem. So many get really excited and full of smiles handing over a CC for a very expensive item. Is it a rush of adrenalin? DS, I would guess your DD is a confident young woman who knows the people she cares about love her. She doesn't need a 'showstopper' dress to feel good about herself.

Seems many of us at SA get our lift from snagging something needed at a reasonable price even if it's a pre owned car or gently used house-ware from GW or CraigsList.

[HappySaver]

she actually rummaged through the trash to recover the spoiled meat.

Please tell us she didn't die from eating the spoiled meat?

[dawnwes]

I had a friend who made the same amount I did. She always drove a new car (leased), went shopping at least weekly, ate out most night, and was in serious debt. She always rented, never owned. She even went through bankruptcy once.

I made the same amount, had a family, supported all of us with that income while my husband went back to school, and we drove older cars, had a manageable mortgage in a HCOL area (Los Angeles), and didn't eat out.

My kids were well fed, clothed, and in pre-school, which I also paid for.

We were not in debt other than our mortgage and paid our bills just fine.

[JoeP]

Please tell us she didn't die from eating the spoiled meat?

No, but it was a terrible risk.

[corn18]

I'm going to go somewhere now that will be controversial. Been bugging me for a while on this forum. Sorry to use your post, Steve, but it makes an easy example.

My daughter is a senior in high school. So is the daughter of one of my employees. We are in pretty good shape. We eat a healthy diet, exercise regularly and don't have any significant bad health habits. She is obese, has diabetes, eats fast food every day, smokes, etc.

Both of our daughters bought their lunch in the past week. She went to a fast food shop about a minute away. Mine went to the local grocery store. She ate a 1,400 calorie meal deal loaded with fat and empty calories . Mine had a healthy salad with low cal dressing.

Not too hard to figure out why some people just "can't lose weight".

I used to be a fat, chain smoking out of shape heart attack waiting to happen. I am no longer any of those things because I decided to fix them. Now that I am a model of fitness, I DO NOT look at those that are fat and out of shape with derision. I feel empathy and want to help as many of them as possible.

I'll leave it at that. There but for the grace of God go I.

Tom