broke people afford everything

[LivingAlmostLarge]

I don't get it. How the heck do people who just go through foreclosure afford an iphone? I ask most seriously? How do you go bankrupt yet still afford "toys"?

[maat55]

The only way to stop them is to reinstate debtors prisons.

[humandraydel]

You must understand...bankruptcy was a stressful time for them. The iphone provides them with a little joy in their life.

[Shewillbemine]

Credit cards. Never ending cycle.

[happygirl]

Although I think Maat's suggestion is a bit extreme, I have to agree with the concept. We don't hold people accountable for their actions enough anymore. I also think we have developed a belief in entitlement that is out of control in our country, which only adds to the idea that people aren't responsible for themselves. Add that to the fact that just about anyone can get credit whether or not they are responsible and you have people foreclosing on their homes and rewarding themselves with iphones.

I just read that Toni Braxton (a singer from the 80s I think)is declaring bankruptcy for the second time and lists her debt as somewhere between 10 and 50 million. Really, give or take 40 million? Ugh.

[maat55]

Originally Posted by happygirl

Although I think Maat's suggestion is a bit extreme, I have to agree with the concept. We don't hold people accountable for their actions enough anymore. I also think we have developed a belief in entitlement that is out of control in our country, which only adds to the idea that people aren't responsible for themselves. Add that to the fact that just about anyone can get credit whether or not they are responsible and you have people foreclosing on their homes and rewarding themselves with iphones.

I just read that Toni Braxton (a singer from the 80s I think)is declaring bankruptcy for the second time and lists her debt as somewhere between 10 and 50 million. Really, give or take 40 million? Ugh.

I have a brother that has filed BK at least 2, maybe 3 times. He has the mentality that running up credit cards, then filing BK is a right if you get layed off or fired. To him, it is just a normal part of his financial plan. Living check to check is something promoted by government policies.

[disneysteve]

Originally Posted by LivingAlmostLarge

I don't get it. How the heck do people who just go through foreclosure afford an iphone? I ask most seriously? How do you go bankrupt yet still afford "toys"?

Some of it is poor money management. Some of it is debt. Some of it is misplaced priorities. I also think, though, that some of it comes down to perceptions vs. reality.

To use your example, there is a big difference between affording a large house payment and affording a cell phone. You can purchase an iPhone for $49 and the monthly fee can be as little as $15 more than a regular non-smart phone. So eliminating that expense from your budget would likely do nothing to help you avoid foreclosure. Sure, you can say that someone losing their home should be cutting back everywhere possible, but the reality is that cutting small costs like the phone probably wouldn't even make a dent in the overall problem.

In further defense of smart phones, there are many ways they can be used to save money and cut spending. We frequently use ours to comparison shop while in the stores. You can also use sites like Coupon Clipper and Coupon Sherpa among others to find coupons to save money on your purchases. Personally, I do a professional survey program that is exclusively iPhone based that earns me enough to pay the entire cell phone bill for all 3 of us, so even if I somehow found myself unable to pay my mortgage, I wouldn't give up my iPhone.

[cschin4]

Honestly, if i had was going to live that way, why not go big or go home? Why bother running up 10K worth of debt and then declaring bankruptcy? If you are going to do so, then go whole hog and run up $100K or more. And, there seems to be very little reason not too. If you can buy stuff and just not pay for it and nothing bad happens to you other than the "stigma" of bankruptcy or a higher interest rates on loans you aren't going to pay anyway, why not? Really, after awhile you start to feel like an idiot for paying your bills.

[goldensun]

Well I think that could be the reason that they are broke in the first place.

Also it could be that they went into foreclosure voluntarily as their mortgage may be more than their house has value, so they may actually be better off after the foreclosure.

[woodie96]

I think it comes down to priorities. My step daughter and her husband cannot manage their money to save their life. Just this past Monday, the step daughter comes over and asks her mom for a "loan" of a couple hundred bucks to pay their cell phone bill. After many "loans" that havent been paid back, wife said we didn't have it. So step daughter takes her 55 inch plasma TV that they bought at one of those rent to own places (still paying on it) and sold it at a pawn shop for 300 bucks. They already sold their living room furniture to the pawn shop over a year ago and are still paying on that.
But they have the cell phones with all the bells and whistles......I just don't get it....

[woodie96]

Looking back, I wish she had come over Monday and offered to sell us their TV.....would have been a win/win....

[bjl584]

The title of this thread should be "broke people finance everything."

This is a common theme, and I even got caught up in it in the past, asking myself how the neighbors or my coworkers could have so many toys and new cars every couple years. How do they go on vacation so many times a year? How are they able to go out to lunch every day?

Then it dawned on me that it was all smoke and mirrors. These people weren't living within their means. Their entire existance was financed, and they were probably one paycheck away from having the bottom fall out.

[Scanner]

I have sort of been involved off and on with a woman who lives on "the other side" from this forum. Think of me as an Ambassador of sorts.

Her house is in foreclosure, she has no savings, not sure how she manages her credit cards (never asked), and is in dire straights with child support/divorce.

All I can say is from developing some intimacy with her is that denial is just a very powerful emotional coping mechanism. Some people just kind of live week to week, day to day and just don't think about things until it's forced upon them. It's then passed down generation to generation.

They don't measure wealth in their bank accounts like we do - but rather the things they own and their families and a diversity of experiences.

I even asked her, "What are you going to do when you retire someday and can't work?" She said honestly, "Well, my kids would take care of me." She then immediately felt bad, realizing that that would be a burden to them but it showed her thinking pattern for a brief instant. She buys her daughter everything she can - softball stuff, puppy dogs, kittens, etc, now. . .and figure that's her SSI in retirement. She's a good mom, a good person. . .I know it's easy for THIS forum to just paint these people as Dregs of Society. Well. . .think about it this way - sucessful Drug Dealers live debt free too. They also have minimal in taxes every year.

I don't know. . .I understand the forum's distaste of this kind of thinking. . .at the same time, I have started to realize that you can't take it with you. I mean, what am I saving my money up for? So when I am old and decrepid and a few french fries short of a Happy Meal I have money?

Maybe the goal is to Die Broke.

[disneysteve]

Originally Posted by bjl584

The title of this thread should be "broke people finance everything."

This is a common theme, and I even got caught up in it in the past, asking myself how the neighbors or my coworkers could have so many toys and new cars every couple years. How do they go on vacation so many times a year? How are they able to go out to lunch every day?

Then it dawned on me that it was all smoke and mirrors. These people weren't living within their means. Their entire existance was financed, and they were probably one paycheck away from having the bottom fall out.

Exactly. My SIL and BIL (well, ex-BIL - they are divorced but stay together) have taken a trip each year the past 3 or 4 years to an all-inclusive resort in Jamaica. They're broke, living paycheck to paycheck, and have been forever. How do they swing the trip? They charge it to their CC and take a year to pay it off. Once it is paid off, they go again and charge it, taking another year to pay it off. I'm sure they do the same thing with various other items in their life. Of course, if one or both of them loses their job, then what? How do they pay the CC bills?

[couchrobt]

I have seen low average income people who are able to enjoy the lavish lifestyle and spend like they own the mall! I really have no idea how they do that. A bunch of credit cards maybe or discount coupons!

[MonkeyMama]

PRIORITIES

I had a conversation with my sister the other day.

Me: "Texting cost too much money."

Sister: "It's only $5/month, on my plan!"

Hmmmm, I think it is the same on mine. But since I have NO INTEREST in it, why would I Waste my $5/month? My sister is not in debt and an insane money waster, but she has had financial priority issues.

Her perception is I am "well off" and can afford anything. I can certainly afford $5/month, but I have other priorities. I try really hard to only spend money on things that improve my life and make me happier.

The friends who are in debt up to their eyeballs, in foreclosure, and filed BK multiple times? There are no priorities. They want everything that everyone else has, and they want it now. End of story. They also would think I Was insane and deprived not to spend that $5. But I have a nice home, ample savings, and plenty of money to spend on things I truly enjoy.

Anyway, I feel the same way with the iPhones. It's not that giving up that one purchase is going to save these people, but why does every single person I know on the verge of foeclosure and bankruptcy have an iPhone and buy Starbucks every day??? It's kind of the symbol of someone who doesn't have any priorities.

I have granite countertops and flat panel TVs - so I am used to hearing how those are the symbol of bad spending. For most people, I guess. I can't take it personally. Just to point out I truly don't believe everyone that has an iPhone is a financial idiot. Not any more than my own luxuries say about my own financial personality. Mine are paid for in cash.

[nick__45]

Originally Posted by woodie96

Looking back, I wish she had come over Monday and offered to sell us their TV.....would have been a win/win....

I call that ungrateful. That little spoiled brat should have given y'all the TV and other things that they can't get much for at the pawn shops. Be on a look-out, these are the first people to put you in nursing home, the cheapest one possible and hope you won't make it long, so they can inherit your wealth.

[nick__45]

Originally Posted by goldensun

Well I think that could be the reason that they are broke in the first place.

Also it could be that they went into foreclosure voluntarily as their mortgage may be more than their house has value, so they may actually be better off after the foreclosure.

I am surprise that banks don't go after people that strategically default loan and still have money or will have money in the future. Either banks are saints or they have one hell of a write-off protection that would cost people like me tons of money in taxes. I heard Exxon didn't pay taxes last year due to its write-off. It must be nice to make a lot and not having to pay taxes.

[Hector]

I dont know what to think about bankruptcy? Is it slap on responsible people's face? or God even gives second chance then why not system thing? I dont know what to think of it!

Its weird that people borrow hundreds of thousands of dollars that they can't afford and when they run out of resources to borrow more money, they can file bankruptcy and after less than a decade everything will be erased from your record and you can do the same thing again and again and again..

Sometimes I feel tired of living discipline life (in terms of living under my means). I see so many people around me getting stuffs and I try to resist thinking there is gonna be a day when I will stop working, how would I able to feed my family after that? For sure it’s frustrating sometimes, but I am doing it because I think its right which is hard sometimes.

The other day my wife was hanging out with her friends and she was talking about how we talk about retirement and try to save and not spend everything we earn and how I worry about it sometimes. Her friends responded: our parents will pass us a lot and our kids will help us out! I am coming from a good family background and my parents are going to pass a good amount of wealth, but I am not counting on it. Our parents paid for our educations and we wanna do the same for our kids. How can we do that if we dont live discipline life? If my parents were thinking like that, we would have tuition loans and they wont be in shape to pass anything to us. If I think like that, my life after retirement might be horrible and my kids will have to take tuition loans and I would have to depend on them.

About iphone and being broke. One day my wife was angry coz she elected not to spend $5/month on texting plan and her co-worker who is in the process of filing bankruptcy bought a smart phone because they stop paying mortgage and that money is being saved now so they have enough money to buy a smart phone!

When I was in the school, I was fond of Credit Cards 0% promotion offers. So I opened quite a few credit cards and when I graduated I had around 50k in credit line. How in the world a student not working any real job would get that much credit line? I don’t think that we are living in very effective system.

[Scanner]

I went into a bank once, years ago, my own bank and the loan officer remarked that she doesn't know why people actually hold up banks, when it's perfectly legal (criminally, that is) to open credit lines, cash them out, put them in an untouchable account, declare bankruptcy, move back to the US with the money.

Remember though, George Bush DID make bankruptcy laws tougher.

What I found a bit unsettling about that is yes, we can wax at savingadvice dot com all we want about these undisiplined spenders. . .wax on about how we are oh-so-superior (between the lines). . .but over 50% of bankruptcy comes from medical bills/illness/catastrophe.

Think about that - any one of you. . .disiplined saver. ..skipping the shiney new grills and the Smartphones. . .you get sick. . .bam. . .kiss all of that savings goodbye. Because getting sick and getting care - it's expensive. Just look at the "cash fees" for anything healthcare related. Nothing reasonable about them. They make lawyers look reasonable (hospitals, that is).

So, why could you be bankrupt? Because your insurance plan had an exclusion in it for this or that.

Yet. . .healthcare reform was evil.

Go figure.

Yeah, when faced with $100,000 in medical bills for a month's stay in a hospital, I may just go spend my savings too. A hospital would eat up my life's work with nay as much as a blink or a thank you.