20/20

Discussion in 'Countryside Families' started by Wendy, Jan 20, 2007.

  1. Wendy

    Wendy Well-Known Member

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    They had an interesting show last night. It was all about consumer debt. Showed a couple that was on the brink of bankruptcy. The guy worked a well paying job & the wife worked out of the home for the most part. They lived in a 4,000 square foot home, had an indoor theatre, 2 new cars, & plenty of other "things". They also had 2 or 3 children.

    Anyway, they appeared to be living the American dream, but were far from it. They were talking with a financial advisor who tried to tell them what they needed to do to prevent the loss of everything. I don't think the wife was very happy to hear the suggestions. It included selling their house.

    This got me thinking on how you can look at someone & assume they must make a lot of money by the things they have, but in reality, they probably do not own any of the things they have. This couple also had $60,000.00 in credit card debt.

    During the interview they stated how they took more vacations last year than ever because they were stressed. It amazes me how people think. Why would you spend money on vacations if you were about to lose your home?

    They also showed a short segmant of a very frugal couple that were debt free. They had 5 kids & made less than $35,000.00 a year. I wish they would have talked with them more. They basically said people always made fun of them & called them names for being so thrifty. I was impressed with how they did things & stayed debt free. Too bad more people don't think of being debt free as a good thing.

    Did anyone else get to see the show? Dave Ramsey was on it for a minute.
     
  2. ladycat

    ladycat Chicken Mafioso Staff Member

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    I saw that show, it was very good!

    The couple in debt were doing a lot of stupid money-draining stuff. The thrifty couple shopped sales and stocked up and kept their freezers full. The thrifty couple were my kind of people!
     

  3. uncle Will in In.

    uncle Will in In. Well-Known Member Supporter

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    People who have the, "Because I'm Worth it Attitude," are destined to loose more than they gain.

    They will make it through life in a turmoil, but still be addicted to the, "I'm Worth It," mentality.
     
  4. Hip_Shot_Hanna

    Hip_Shot_Hanna Well-Known Member

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    There is a mentality about people that are stingy, which should not be confused with frugality but often is. Being parsimonious is not considered a virtue, nor should it be. But wise use of the assets you have should indeed be the goal of everyone IMNSHO.

    The people that are making fun of them may one day be talking out the other side of their face...
     
  5. Wendy

    Wendy Well-Known Member

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    The couple in debt just remind like once they get out of debt, they will start spending again & head right back in the same direction.

    The thrifty couple were not stingy from what little they showed of them. They just seemed like they were smart witht their money. They did not buy something unless they had the money for it.
     
  6. ladycat

    ladycat Chicken Mafioso Staff Member

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    Yes, they saved up their money and paid cash for everything. They had no credit cards.
     
  7. MorrisonCorner

    MorrisonCorner Mansfield, VT for 200 yrs

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    One thing that hasn't been touched on is environmental issues... and I didn't see the show so I'm asking...

    Were the couple who found themselves in over their head in a business/social/community where "frugality" would not be positively reinforced. I've posted several "h e l p ! ! !" type threads lately about a couple who broke up with two children in the middle because she feels obligated to maintain a lifestyle for the kids they can't maintain... but the extra activities like dance are part of the social world of little girls in this small and admittedly rather well to do community. Now, it is possible that unknown to her many of the parents of these little girls are going into debt to maintain these expectations as well and would gratefully welcome the first parent to stand up and say "enough." But there is so much peer pressure to keep the girls in these nice social activities with their friends nobody says "we can't do this..."

    While the frugal couple may have family and friends who, for the most part, support their lifestyle. My friends, for example, do not get together after work for a few drinks at a bar and a shared round of snacks. A few nights a week and that would break us. But in many occupations, that is expected. And in many social circles, it is a given. I rarely even go out for coffee with a friend. To do so, in my circle, is an Event. A rare treat.

    If certain social activites are considered givens (dining out as opposed to a home pot luck for example) it could raise your lifestyle budget and credit card debt pretty darn fast. It is HARD to be the one who says "I can't do that." It is fraught with all sorts of unintended messages... for example, on the doll thread I suggested getting a less expensive alternative to the American Girl doll which is The Doll All The Little Girls Have and the doll the little girl wants.

    After several suggestions were floated other women came on board to warn "don't do that.. go with a completely different alternative (a make-your-own teddy bear was the concensus and her daddy is taking her to make a bear together.. $20 vs. $100). Why? Because they felt that the underlying message, even though it was utterly unintended, and the message they got as children was "you're not worth it, I'm not going to spend that much on you."

    So I can certainly see how a couple, wanting to do the "right thing" by their kids, given their social environment, could get themselves into big trouble. And I can see how having a circle of friends who don't have to think about money would make it darn difficult to say "but I do."

    It isn't that you need a new budget and a new spending pattern... you also need an entirely new set of friends, possibly relatives (if you're the "poor relation"), new skills, new... the list is endless. It takes an absolutely bombproof self image and self confidence to make such a wholesale change because it admits "failure" and an inability to live up to the expectations of family and friends.

    Whether or not it is, in fact, a failure at all is open to debate... but I can certainly see how someone might see it that way and be very reluctant, no matter how much trouble they were getting themselves into, to admit to the problem.
     
  8. mary,tx

    mary,tx Well-Known Member Supporter

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    I just watched part of it, and missed the thrifty couple.

    I was struck by the lady who considered begging for money on the internet as "work". DH said, yea, the people panhandling on the street have to get up and get out there, too. I don't understand why it is no longer shameful to beg, and that people actually can consider that working. :shrug:

    And I agreed with the man who said spending a lot of money on pleasure right before you file for bankruptcy is stealing.

    Yikes, though, some of those bill collectors should have been in prison!
    (Not saying they're all bad. Some were AWFUL.)

    mary
     
  9. Terri

    Terri Singletree & Weight Loss & Permaculture Moderator Staff Member Supporter

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    Social activites for kids CAN be expensive....but not THAT expensive!

    OK, dance for a child might run $100 a month. But, how much do you think the multiple vacations cost?????

    Do not look to social activities for the reason they are broke. That was just the icing on the cake.
     
  10. Mid Tn Mama

    Mid Tn Mama Well-Known Member Supporter

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    Living within your means is considered "stingy" and unpopular these days.

    I have noticed that the people who like to point out how stingy their friends and family are that live within their means never mention it later when they are in over their heads and need to borrow money from their family/friends. They don't mention the stingyness then and just feel they are loaded and don't know how to enjoy it anyway.

    I was listening on the radio to someone who said it was impossible to go to school without having large debt. She found that it was impossible to live/have a family later with this huge debt. We are living proof that if you make certain choices it is possible to go to school without debt. It doesn't involve having money for vacations, cars, hair dye jobs, manicures, designer clothes, ipods, and picture taking cell phones. It does involve taking menial jobs, sometimes two at a time, living with others, etc.. All unpopular choices with many people.
     
  11. Jenn

    Jenn Well-Known Member Supporter

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    I have a self esteem inferiority complex issue (wouldn't think it to know me now- but perhaps it has driven me to my current position). This is really brought out when I visit a posh neighborhood- for example when I drive around San Antonio and see a lot of women younger than me driving in bigger fancier cars than mine and apparently living in all the lovely homes I see in that town's neighborhoods.

    However when I first felt this and asked my DH "How come all of San Antonio seems to have more than we do?" he educated me that unlike us; who own clear and free everything except 75% of our home (and we have smaller older cars and houses), most of the posh folks we see are probably three paychecks away from bankruptcy with monthly mortgage car and credit card payments.
     
  12. ladycat

    ladycat Chicken Mafioso Staff Member

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    There does seem to be an unusually high proportion of "well off" people in San Antonio. :shrug:
     
  13. Ann-NWIowa

    Ann-NWIowa Well-Known Member Supporter

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    Same old, same old. I wish just once they'd address the issue of easy credit especially credit card companies. IF THE CREDIT INDUSTRY ONLY OFFERED CREDIT TO THOSE THAT SHOULD HAVE IT, huge numbers of debt problems would be gone. Credit card companies are greedy, blood sucking, evil and fiscally irresponible. Preditory lending is becoming a bigger and bigger issue and needs to be addressed by lawmakers. Payday loans, car title loans, etc. are absolutely morally criminal ... yet legal under the law. Interest rates approach 300%.

    Back in the 1960's when credit started becoming more readily available you still had to "qualify" for credit. DH and I were turned down a couple of times by Sears. I don't think I've heard of anyone being turned down in many years by anyone. Actually, I have bankruptcy clients who continue to receive credit card offers from the same companies who are harrassing them for payment on other cards they hold with the same company. After filing bankruptcy they also get credit card offers and unfortunately more than a few who file bankruptcy end up in the same hole in a brief time. The one part of the new bankruptcy law that makes sense is the debtor's education requirement.

    One thing that continues to amaze me is the number of people who have the entitlement attitude and simply do not, cannot or refuse to see that their entitlement is achieved by stealing (not paying) their bills. One lady told me she cried when told she could no longer have her nails done to the tune of $100 per month!! I recently told a friend who could not afford groceries that the $150 a month he was burning up in cigarettes would have paid for food and that he was selfish to put his cigarette habit above food for his kids. He's told me for years he wants to quit smoking so I called him on it and said NOW is the time.
     
  14. pancho

    pancho Well-Known Member

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    The reason most of the show was about the couple on the brink of bankruptcy was they appeal to more of the public than the frugal couple. Not many people will agree with the life style of the frugal couple. Many will agree with the bankrupt couple as they think they can borrow their way out of the jam their borrowing has landed them in.
    People are more interested in what they think others think of them and less in what they have saved and bought without borrowing.
     
  15. MorrisonCorner

    MorrisonCorner Mansfield, VT for 200 yrs

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    I agree with that idea that giving credit where it shouldn't be given has a lot to do with some people's woes. I remember my first credit card had a $1000 line of credit. A lot at the time, but not so much that if I maxed it out I couldn't pay it back.

    Today, and I just added this us, my husband and I can tap $60,000 in credit cards!!! We pay them off every month but.. imagine.. if you didn't. And the debt kept building and building...

    We could never pay $60,000 worth of debt at 17%. The interest alone would be $850 a month!
     
  16. cwgrl23

    cwgrl23 Chief Vegtable Grower :) Supporter

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    While you may not agree with the credit card companies practices, no one makes anybody take these offers! In our area alone, if you took away the "sub-prime" credit card market, we would like over 8,000 jobs! In a town of 150,000 that is a lot of jobs to try and recoup! That would be 8,000 more people on unemployment, food stamps, etc! These are some of the HIGHEST paying jobs in our area! Every thing else is about half that in wages!

    Believe it or not, there are some people who end up with ruined credit through no fault of their own - expect maybe trusting a spouse or a soon to be ex spouse. These credit cards can help rebuild credit faster than just waiting it out or just using rent and utilities.

    Sure the credit card companies make money on these people, but when did that become a crime? I know the car dealership makes quite a bit if I buy a new car for "no money down, no interest for 1 yr". I (personaly) can qualify for this auto program (I did infact) and not be able to make the car payment (looked at my budget and can't swing the payments) BUT I qualify for the car! Does that make the car dealership any worse? They are practising the same "qualifying credit guidelines" that many credit card companies do. But NOONE is trying to legislate that!

    At some point in time, people have to take responsiblity for their own actions or suffer the consequences! Becareful of what you want legislated, as you may run out of "FREE CHOICE/WILL"!

    Carrie in SD
     
  17. pancho

    pancho Well-Known Member

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    That isn't fair, we have to be able to blame someone else for what we do. It is the american way.
     
  18. MorrisonCorner

    MorrisonCorner Mansfield, VT for 200 yrs

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    Personally, pancho, I think people are "more interested" in the in debt couple because they aren't "that bad" yet and they can feel good by comparison. The frugal couple just makes people feel bad about themselves. Nobody really looks at the frugal couple (unless they are dumpster diving to feed their kids) and says "we can "out frugal them!" But you can look at the in debt couple and say "we're doing better than they are."
     
  19. MorrisonCorner

    MorrisonCorner Mansfield, VT for 200 yrs

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    I think there is an entire industry out there with a vested interest in getting you in debt and keeping you there. I don't think it is entirely fair to blame someone who gets into a predatory interest or loan situation... these people prey on the desperate and ignorant... and seriously... when was the last time you read the fine print of every document your credit card or lending company sent you? The font is so small I'd need a magnifying glass to read that flyer.

    Even a relatively well educated person who was doing well professionally could find themselves in a bad way simply by not understanding exactly how their credit card works and missing a payment or making the wrong assumption.

    Today, for example, I discovered that a client has one cc with a $18,000 credit limit that has 0% interest on it as part of a signing promotion... and another with 12.5. Guess where the bulk of the debt is? Right. On the wrong card. Why? Because this man, a man with a master's degree, didn't understand how the cards worked. He knew he needed to get his own cards, he signed up for a couple of cards mostly based on the points they earned him... but didn't understand what the interest deal was. This as cost him about $120 so far, money he didn't have to put into interest when he can't buy groceries.

    I'm not buying the arguement "people" are to blame for all of their woes. This is a very sophisticated industry with a vested interest in not only making people sink into debt and keeping them there... but in making sure that nobody looks too carefully at how that is done. So it remains the "fault" of the consumer, not the fault of the credit card companies for issuing people more credit than they can manage.

    I remember, not so long ago, when I assumed that if they gave me a line of credit it must be because "they" knew I could manage it. It never occurred to me that "they" didn't give a rat whether or not I could manage the debt.. I thought my bank, the bank that promoted saving for education, retirement, the first home.. all things that were supposed to be good for me, also had my best interest at heart when it came to consumer credit.

    Imagine my surprise when I realized this isn't so! That in fact it is in their interest to urge me to save for retirement AND at the same time, pay 17% on consumer debt.. indefinitely.. and I need to hire someone, or be pretty clever to figure out on my own, to figure out that this is not in my best interest at all... but benefits the bank!
     
  20. pancho

    pancho Well-Known Member

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    You are probably right. It always makes a person feel better about themselves if they can see others that are doing worse.