Are we as a society credit rich?

Pstar · February 20, 2006

I just thougth I'd start this thread to see how people feel about the growing epidemic of our society and our debt problems. You see everyone these days leasing cars for various reasons, buying things they really cannot afford, and people living outside of their means. You also see this on the golf course. The average joe with the newest driver, shades, attire, etc. So the purpose of this is to see how you feel about our lifestyles as people and maybe what we can do to prevent this. Just a little FYI is that i work with the general public on a daily basis and see quite alot of this everyday. later, steve

karjar · February 20, 2006

I think we have done good at turning wants into needs. And I am pretty good at it too!

handz98 · February 20, 2006

That is a very interesting topic. My wife and I were having that very discussion with some friends this past weekend. We live in a society in which the peceived "needs" become increasing larger year by year. Right along with this comes an increasing acceptance of deeper and deeper indebtedness. We were commenting that it would be interesting to go through the neighborhood house by house and see just how everyone is doing it. Where do all of these people work? how do they afford all of this "stuff". I see this more and more in the people that I deal with on a daily basis at the office. Will this catch up with them at some point? We have made a conscious effort to step back and to try and look at this critically in our own lives but it is hard to do ... especially when you guys keep showing off all of your new stuff on Golfwrx ... ;)

Johnny · February 20, 2006

I only owe for my House and student loan... no credit card debt at all anymore.

peteman29 · February 21, 2006

My Dad is a Financier so I've grown up always seeing other people borrowing huge sums of money wondering how can they ever pay that back? so naturally I developed a respect and understanding for the seriousness of credit.

HOWEVER!!!!!

I would definately hit one of my flexible friends for a set of Titleist 695's this summer... and most definately will!!!

Who can resist a hot girl with a clip board stopping you in an airport and offering you a credit card? NOT ME! "Yes maam, I would like another visa, thank you, what did you say your name was again?"

LOL.

cpa49707 · February 21, 2006

I'm a CPA and pretty darn frugil (not cheap mind you) and the only debt I have is a mortgage on my house and 6 more payments on my vehicle. I don't beleive in credit card debt. I use a credit card on a regular basis but pay it off each month.

If i don't have the cash i dont buy it and probably don't need it either

Farquod · February 21, 2006

I heard on NPR a few weeks back that savings in the US last year were at -0.3%. So we are keeping the economy rolling by spending more than we have.

And feeding the debt at the same time. We are the world.

It will be interesting to see how many people who have variable-rate, interest-only mortgages survive should interest rates continue to climb.

Is a depression in the cards?

Pstar · February 21, 2006

I think a depession is definetly in our future because there's tons of people out there living paycheck to paycheck just to get by. Then you add in the fact that our utilities have gone up, our local taxes have gone up, and overall our cost of living has gone up. It's just a matter of time until something gives. By the way is my username offensive. just curious. later, steve

PGMlady · February 21, 2006

Great topic pstar!

Americans want "things". We believe that the more money and posessions we have, the better of we will be. Money can't buy you happiness. And certainly credit cards are used to fit that void of money. Our society thinks nothing of debt. Everybody is doing it so they might as well join in.

I am happy to say that I pay my credit card bills ON TIME. I am not a typical college student in credit card debt. I know my money limits and spend wisely. If I don't have the money, then I don't buy. It's probably a posession that I want but definitely do not need.

We all want the lastest gadget, car, or clothing line. Newer is not necessarily always better.

peteman29 · February 22, 2006

The beauty of being an Electrician or any tradesmand is that you can be self emplyed and a lot of your work is paid in cash which means you can "forget" to declare it for tax purposes meaning you could get away with paying tax on about 50% of your earnings. (illeagal but they all do it)

Add that to the fact that a lot of tradesmen get paid more per hour than Doctors and you can see why handz98's sister can afford all that stuff.

If I could go back to College I would learn a trade instead of I.T.

Big D McGee · February 22, 2006

I'm a CPA and pretty darn frugil (not cheap mind you) and the only debt I have is a mortgage on my house and 6 more payments on my vehicle. I don't beleive in credit card debt. I use a credit card on a regular basis but pay it off each month.

If i don't have the cash i dont buy it and probably don't need it either

That describes my philosophy. I have 12 years left on my mortgage (re-fi'd at an INCREDIBLE rate 3 yrs ago). Our home is a 70-year old 3-story brick house that we got for a steal 10 yrs ago, before the market exploded. We have 2 yrs. left on the wife's car. She gets a new car every 5 years, but she's happy with a little Honda CR-V, so our bank isn't broken by that. We also contribute 20% of our salary to 401 (k), and another $3,000 or so to Roth IRA's. Luckily, my Father-in-law is pretty well-to-do, he's made it his goal to pay for our son's college education (the kid already has $10,000 in the bank, and he's not even 2 yet!). In short, like the wise CPA above said, if we don't have the cash for it, we don't buy it. I use my CC as a convenience, nothing more. When our savings drops below a certain amount, I literally start to get nervouse.

Our friends? That's another story. Most are two-income households, like ours, making relatively the same money we do. For them, it's $500,000 new homes, new SUV's (for both of them) every five years, and thousands of dollars of Ethan Allen furniture. I don't think any of them save for their retirement, much less have a savings account. One of my wife's friends confided in her that they were well over $25,000 in debt to two different CC companies. When my wife asked, "My God, what did you buy?!" Her friend replied, "That's just it, I don't really know."

Others here have hit the nail on the head: The American Advertising Machine has done an excellent job turning wants into needs, luxuries into "I gotta have it-NOW". We've become a bloated (financially and physically) nation who can't wait 5 seconds for anything.

I don't mind; when everyone else around us is broke, it makes us all the more wealthy!

Pstar · February 22, 2006

How does someone get by when they're paying child support which is 24% of their pay. I'm trying to save up for a rainy day but with the salary i have it's kinda tough. Thank god I can fix my own vehicle or have someone do it for me for relatively cheap. If anyone has a vehicle question or anything about a NY state inspection just give me a holla. later, steve

shoe295 · February 22, 2006

HAH, I'd love to be paying just 25% child support! I pay 25% for the first 2 and 17% of the remaining for a 3rd. That's over a grand a month in support. But if it helps get the kids what they need, I'm there and pay with a smile. As for a credit society...when did you ever get taught about finances? Did your grade school do it? How about High School? College? Professional School? None of the classes I ever took involved personal financial responsiblity. I learned the hard way but getting in deep and fighting my way out over a long period of time. This is a society of instant gratification; very few people have been exposed to the idea that you save for what you want and then get it; rather it's buy now and pay later, thru the nose. I try to instill that philosiphy into my kids, but since they don't live with me it's hard to do. Not that I'm perfect mind you, I still make some crazy impulse purchases and then have to hustle my tail off to pay for it, but I try not to do that very often cuz there ain't a whole lot extra after the support and normal bills. I remember when cigarettes were $0.16 a pack (ok i'm old an sound like your grandfather now) and gas was $0.19 a gallon so the expenses are all relative as is the income levels used to purchase the expenses. I also remember having this discussion in every decade going back to the 60's. The answer is always the same, the end is near. As that has yet to occur, despite some very trying economic times for those who remember the late 70's early 80's when interest rates went to upwards of 24% and yet we survived stronger than every, I have adopted the philosophy of thanking my grandparents every day for coming to America! Only in America would they pay me so much for doing so little! I love this country! As long as we have a Free People and Free Markets things will be fine. Cylces will occur, booms and busts will happen, but with those 2 factors present we will continue to see more good times than bad. Just my buck and a quarter's worth.

papichulosteve · February 22, 2006

As for a credit society...when did you ever get taught about finances? Did your grade school do it? How about High School? College? Professional School? None of the classes I ever took involved personal financial responsiblity. I learned the hard way but getting in deep and fighting my way out over a long period of time. This is a society of instant gratification; very few people have been exposed to the idea that you save for what you want and then get it; rather it's buy now and pay later, thru the nose.

exactly!!! being a college student my campus is filled with people giving away free crap and cute blondes wanting to sign you up for a credit card with outrageous interst and having never learned anything about that thing you blindly jump head first into loads of debt before you even have a stable job. i only realized the errors of my ways when it was too late and have been paying for it for a while, now i don't even bother using my credit cards and just use the good old green stuff when its available.

cpa49707 · February 25, 2006

Think of this idea I had the other day: so I run up a crapload of debt just by creditcards and loans and travel the world, die and let the state pay for it

Right there is what is wrong with the thinking of society. Let some else pay for it after i'm gone. The problem is we are all paying for it right now with higher interest rates and fees to cover the bad debts of the dead beats.

I think we all need to be more responsible for our actions today and not wait till tomorrow and let someone else take care of it.

shoe295 · February 25, 2006

Think of this idea I had the other day: so I run up a crapload of debt just by creditcards and loans and travel the world, die and let the state pay for it

Right there is what is wrong with the thinking of society. Let some else pay for it after i'm gone. The problem is we are all paying for it right now with higher interest rates and fees to cover the bad debts of the dead beats.

I think we all need to be more responsible for our actions today and not wait till tomorrow and let someone else take care of it.

Agree..this is why they had to toughen up the bankruptcy laws...buy now go broke never pay start over repeat cycle. Sensible eh