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Old 02-16-2019, 04:08 PM   #1
shikataganai
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OMGHi2U A thread about making ends meet

This shall be an open thread about the general topic of making ends meet.

I don't have a well-formed hypothesis in my head, but there's lots swirling around in there:

- record length and amounts of car loans
- swelling student loans
- extensive consumer debt
- high and rising premiums for health insurance
- gig economy jobs with no benefits


[source]

It's hard to know from aggregate stats whether these are the same people: Is Joe Sixpack complaining about insurance premiums also Joe Sixpack who has a new F-150 in the driveway with a loan equal to his gross yearly income?

How the **** does the average household have nearly $17k in credit card debt?

How much of the decline of the middle class are due to true macroeconomic trends since the 1970s and how much is due to living large paycheck to paycheck?
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Old 02-16-2019, 04:48 PM   #2
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Originally Posted by shikataganai View Post
How the **** does the average household have nearly $17k in credit card debt?

How much of the decline of the middle class are due to true macroeconomic trends since the 1970s and how much is due to living large paycheck to paycheck?
It's crazy - and I think it has a lot to do with absurd education expenses and insane consumerism.

Students at mediocre undergraduate institutions are walking out with ~$80k in debt and a bachelor's degree, to take on jobs that pay ~$35k. They also buy new cars (upgrading every three years or so) and Apple watches. Phone upgrades annually. [anecdotal data from individuals that I personally know]
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Old 02-16-2019, 04:52 PM   #3
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Meanwhile I remain connected with lots of people from my hoity toity undergrad who ended up in (non-medicine) academics or public service, and who know are in their late 30s and (I imagine) wondering what happened.

Hmph.
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Old 02-16-2019, 04:53 PM   #4
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Radical assertion: If we could all live a bit more like Mr. Money Mustache we'd be happier and richer. I did this before knowing it was a thing in 2008-2009: no car, very little eating out or other spending of money, and I saved about half of a $40k salary at that time. (Having no kids at that time sure helped with that.)
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Old 02-16-2019, 04:54 PM   #5
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While student debt is definitely a problem.. would likely assume most of the debt in the statistics above are by gen X/Y. The primary culprit being rampant consumerism combined with all the stupid **** that wants a monthly subscription.
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Old 02-16-2019, 05:04 PM   #6
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Originally Posted by shikataganai View Post
Meanwhile I remain connected with lots of people from my hoity toity undergrad who ended up in (non-medicine) academics or public service, and who know are in their late 30s and (I imagine) wondering what happened.

Hmph.
Wife and I are both in the academy and have terrific pedigrees - we DO sometimes wonder what happened!

We're doing okay though we're definitely not ballers (old cars, old but well maintained tech, no debt (except reasonable mortgage), nice retirement being assembled, modest house, enough to squander a bit for fun here and there).
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Old 02-16-2019, 05:19 PM   #7
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Keeping up with the Jones consumerism and filling the empty void materialism is what I've personally seen as the biggest optional factor where people choose to put themselves into head-scratching interest expense/debt situations when it comes to discretionary spending. Not saying that they need to find Jesus, but frugality and finding worth in simpler things (grow heirloom tomatoes as a hobby instead of a bling lake boat) is lost on many people.
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Old 02-16-2019, 05:20 PM   #8
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Wife and I are both in the academy and have terrific pedigrees - we DO sometimes wonder what happened!

We're doing okay though we're definitely not ballers (old cars, old but well maintained tech, no debt (except reasonable mortgage), nice retirement being assembled, modest house, enough to squander a bit for fun here and there).
You guys sound like you've made the very reasonable choice of trading some income for quality of life, with the important caveat that you're still left with enough to get by.

That seems very healthy, and indeed I've made that same choice to a degree as well.

I wonder instead about my friend who is an assistant professor teaching piano, having abandoned a law career but not yet paid down those loans yet... She's clearly chasing her dreams but that just seems objectively not a good situation.
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Old 02-16-2019, 05:21 PM   #9
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Keeping up with the Jones consumerism and filling the empty void materialism is what I've personally seen as the biggest optional factor where people choose to put themselves into head-scratching interest expense/debt situations when it comes to discretionary spending. Not saying that they need to find Jesus, but frugality and finding worth in simpler things (grow heirloom tomatoes as a hobby instead of a bling lake boat) is lost on many people.
In the Bay Area I imagine it's a pressure cooker on both ends: super expensive to live there in the first place yet lots of perceived societal pressure to roll with those who are doing well (or who are putting on the image of doing well).
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Old 02-16-2019, 05:32 PM   #10
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rampant consumerism is definitely a problem. we're sorta close to paycheck top paycheck. we could def budget better, but we don't. we only have one car note, and 2 other older vehicles that i drive and always need some sort of work, but they're paid off. our house was 70k and we owe maybe something like 58K on it now. It's not the nicest house, it's a constant fixer upper and will always be, but it dresses up nice and pretty much everything works. we could use another room, but whatever...it's a good size house for out family anyhow.

we both have student loans, but the balance is pretty low, they should be paid off in a couple/few years i think...credit cards at a couple thousand maybe...

we don't go out all that much these days because kids, so we save a lot of money there. Savings are minimal though, but i do stash a little away here and there along with random cash side jobs.

still, some weeks are tough. we're single income. The struggle is real. I'm sure some people would wonder how we get by with what i make.
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Old 02-16-2019, 05:43 PM   #11
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This topic is something that I've been thinking about some as well after recently watching a relevant piece on Nightly Business Report

Quote:
Then

the Federal Reserve Bank of New York reported that more than 7 million

Americans are behind on their car payments by at least 90 days.

Finally, a new survey from bankrate.com found that roughly a third of

Americans have more credit card debt than they do in savings.
So that taken with the infographic from above makes me really wonder both how the people in these situations can sleep at night and if we are headed for another recession.

Also while looking for that quote I saw that
Quote:
62% of federal workers say they used up all or most of their savings during the government shutdown
http://nbr.com/2019/02/15/62-of-fede...ment-shutdown/

I realize I am in a fortunate situation but I'm only in that situation by living like Mr. Money Mustache or Millionaire Next Door style for a long time. Like all habits it's only hard for the first month or so but living well under ones means is such a good thing and of course the peace of mind that one has when their financial house is in order is priceless. Indeed we could retire now at 43 and 42 but for the specter of health care costs for a family of four and of course through old age.
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Old 02-16-2019, 05:46 PM   #12
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Making ends meet = spending less than you make while saving enough for the future. EZ.
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Old 02-16-2019, 05:55 PM   #13
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When I went from an FXT Limited to an old car purchased outright, I was able to divert almost $500 into my retirement and live the same otherwise.
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Old 02-16-2019, 05:55 PM   #14
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Making ends meet = spending less than you make while saving and investing enough for the future. EZ.
Fixed.
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Old 02-16-2019, 06:33 PM   #15
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rampant consumerism is definitely a problem. we're sorta close to paycheck top paycheck. we could def budget better, but we don't. we only have one car note, and 2 other older vehicles that i drive and always need some sort of work, but they're paid off. our house was 70k and we owe maybe something like 58K on it now. It's not the nicest house, it's a constant fixer upper and will always be, but it dresses up nice and pretty much everything works. we could use another room, but whatever...it's a good size house for out family anyhow.

we both have student loans, but the balance is pretty low, they should be paid off in a couple/few years i think...credit cards at a couple thousand maybe...

we don't go out all that much these days because kids, so we save a lot of money there. Savings are minimal though, but i do stash a little away here and there along with random cash side jobs.

still, some weeks are tough. we're single income. The struggle is real. I'm sure some people would wonder how we get by with what i make.
****, man. Don't stash away a little here and there if you have credit card debt! Pay that down.
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Old 02-16-2019, 06:35 PM   #16
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Originally Posted by Compressed View Post
This topic is something that I've been thinking about some as well after recently watching a relevant piece on Nightly Business Report



So that taken with the infographic from above makes me really wonder both how the people in these situations can sleep at night and if we are headed for another recession.

Also while looking for that quote I saw that http://nbr.com/2019/02/15/62-of-fede...ment-shutdown/

I realize I am in a fortunate situation but I'm only in that situation by living like Mr. Money Mustache or Millionaire Next Door style for a long time. Like all habits it's only hard for the first month or so but living well under ones means is such a good thing and of course the peace of mind that one has when their financial house is in order is priceless. Indeed we could retire now at 43 and 42 but for the specter of health care costs for a family of four and of course through old age.
Yeah, that recent 7 million 90 day delinquent car notes piece was on my mind, too.

What portion of your income do you actually live on? (Like how Mr. MMM lives on $25k/year. Percentage requested for modesty. ) How many years did you save to get to the point where you can retire?

I'm 37 now and am nowhere near retirement unless my life or disability insurance gets invoked involuntarily.
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Old 02-16-2019, 06:36 PM   #17
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When I went from an FXT Limited to an old car purchased outright, I was able to divert almost $500 into my retirement and live the same otherwise.
Didn't you go whole hog and go to an old Corolla? Or is my elephant memory failing me now? I like that idea, thus my periodic musings in my car-purchase thread about going back to a gen 2 Prius. But I'll survive. I'm not quite paycheck to paycheck yet.
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Old 02-16-2019, 07:20 PM   #18
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Put in simplest terms: People are expected to spend too much and don't make enough.

Healthcare costs are drastically shifting to the individual employee, wages have been stagnant (when adjusting for inflation), bachelor degrees are nigh on expected for everything, with subsequent student loans unless your parents are loaded, pension plans are a thing of the past, and you're happy just to not get fired most times, even if you're treated like ****, because there's no rights enforced by collective bargaining.

Housing costs are through the roof in most areas with even semi attractive job markets and wages haven't kept up. Not particularly hard for me to understand how it's hard to get by these days.

While the wife and I are pretty financially conservative and have been able to increase our household earnings quite a lot over the last 8 years while more modestly increasing spending, those decisions come with their downsides.

If we wanted to live the kinds of lives that young semi-professionals normally would have 20-40 years ago in their early/mid 30's, we'd be paycheck to paycheck too. No mortgage (because we can't afford it without struggling to save monthly) and no kids means we're able to be comfortable, but if we wanted kids and decided to be more irresponsible and buy a house in our market, we'd save nothing to $200.00 month tops. Neither of us have any near term expectation of significant pay increase.
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Old 02-16-2019, 07:26 PM   #19
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Yeah, that recent 7 million 90 day delinquent car notes piece was on my mind, too.

What portion of your income do you actually live on? (Like how Mr. MMM lives on $25k/year. Percentage requested for modesty. ) How many years did you save to get to the point where you can retire?

I'm 37 now and am nowhere near retirement unless my life or disability insurance gets invoked involuntarily.
ha!

We probably live on 16-17% of after tax so net income, for living expenses and most luxuries. However we have our primary home paid for so our living expenses are lower there as a result. We saved as a couple very diligently for 10 years and had probably half of our income or more taken out of paycheck automatically straight to 401k or other investments for that whole time. That was key as we only had to make that decision once and we've reaped the rewards as a result. If you don't see a savings or checking account accumulate there is no incentive to spend it and seeing investments accumulate only reinforces the track of saving.

Also both my wife and I had purchased townhomes prior to meeting each other that we were able to sell or rent. Also the first home we purchased together we made sure to be able to only afford on the lowest salary at the time, that was mine as she is a Physiatrist. That last part does help of course as her income is strong. However there are so many high earners that make stupid financial decisions, thinking they deserve a type of lifestyle or that they need show a certain type of lifestyle or wealth due to their income/career.

Reducing recurring monthly expenses as much as possible and not giving in to the allure of matieralism and latest/greatest is a huge thing and makes getting ahead on even lower income possible. Millionaire Next Door was way on track regarding this back in '97.
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Old 02-16-2019, 07:26 PM   #20
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It's crazy - and I think it has a lot to do with absurd education expenses and insane consumerism.

Students at mediocre undergraduate institutions are walking out with ~$80k in debt and a bachelor's degree, to take on jobs that pay ~$35k. They also buy new cars (upgrading every three years or so) and Apple watches. Phone upgrades annually. [anecdotal data from individuals that I personally know]
$35k annual salary and $80k in loans? What kind of field did these idiots choose?
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Old 02-16-2019, 07:55 PM   #21
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$35k annual salary and $80k in loans? What kind of field did these idiots choose?
architecture.

only it's more like 150K in loans and a 35k job.
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Old 02-16-2019, 08:07 PM   #22
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When I got together with Mrs. Lag she wanted to do the Dave Ramsey course. I did, he didn't say much anyone else said bud did add a dollop of religion on top I didn't/don't care about/mind. But I did the course since that's what you do as new boyfriends and whatever. I knew it all but whatever happened made me put it into action, it could have just be the age to do it and it could have been 2008. It was 2008 but saying it could have been that nightmare. I can't buy a house in this area where I'd I live in it not having anyone I can live free off of for 10 to 20 years to save that money but most other things might be blessed by Dave. I do use credit since as mentioned I'll still need it here and there but it's mostly just normal bills paid with cards then paying the cards off to keep them in use.

Thank God Bless.

Last edited by lag; 02-16-2019 at 08:36 PM.
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Old 02-16-2019, 08:09 PM   #23
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architecture.

only it's more like 150K in loans and a 35k job.
Thats absurd. Sounds like the trades are the way to go these days. Any decent electrician should be pulling in $100k+.
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Old 02-16-2019, 08:19 PM   #24
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a HUGE part of the problem is nearly 4 decades of wage stagnation.

don't place all the blame on Joe Sixpack for making poor financial decisions. A majority of this **** is to be placed on corporations not investing in their workforce.
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Old 02-16-2019, 08:21 PM   #25
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Didn't you go whole hog and go to an old Corolla? Or is my elephant memory failing me now? I like that idea, thus my periodic musings in my car-purchase thread about going back to a gen 2 Prius. But I'll survive. I'm not quite paycheck to paycheck yet.
Yes. It was supposed to be for 6 months, but nothing really major happened, except the hack where the pulley had wobbled and it ended up messing up the keyseat. I "fixed" it with locktite 660 and a new mark to set the timing 15K miles ago

But I am in the process of updating to a 99 Sonoma that now has a rebuilt transmission. And became a project,Biking truck with place to sleep if I want. I think I'm getting an A R E canopy 36": tall with a vertical door in the back. I just got new wheels and tires. And then the 1UP rack. And a climber's cot or whatever.

In other words, it's biting into the $400 right now.
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