Do you know someone who just "doesn't understand" money and spending?

[bjl584]

A lot of my friends and coworkers just don't "get it." A close friend of mine is actually going to court in January over some unpaid credit card debts. I've tried talking to him about bugeting, but he just won't listen. He thinks that he has it all figured out and that I don't know what I'm talking about.

[Coleroo]

...oh i just remembered --- i also know someone who always makes the comments "why should i pay them???? they only want your money!!" (said about credit card fees).

Im like DUH. Its because YOU took THEIR money! If you pay late you encounter a fee. If you take more money than they allow you, then you encounter a fee. *sigh*

[m3racer]

He thinks that he has it all figured out and that I don't know what I'm talking about.

That's probably the most frustrating part.

[Duchesse]

You can but all these people want to do is .

I no longer talk to anyone about their finances. At some point you realize that they are doing exactly what they want to do.

They are only telling you because you are a saver.This may sound far fetched and you can believe it or not but, many of them believe that you will feel sorry for them and hand over some of that money you have been sacrificing so long to save.

[disneysteve]

I no longer talk to anyone about their finances. At some point you realize that they are doing exactly what they want to do.

Certainly, there is some truth to this. Some people will talk and gripe and complain, but really aren't interested in getting any advice or changing their behavior. When I sense that's the case, I'll just keep my mouth shut.

Other times, though, I will kind of get the impression that they'd like to improve things but just don't know how to go about it. In those cases, I'll try to make a casual suggestion or try to relate their situation to something I've dealt with myself. If they respond favorably and want more info or ask for help, then I'll certainly give it.

I think you really need to listen to what is being said and how it is being said to see which situation you are dealing with.

[Landwatch]

The list is indeed a long one for those who qualify it. It is basically those people who fail to take charge of their lives. They know they are overspending but they are hooked to it, that is their fix. Their life only ends up being a big debt, a burden literally for everyone.

[project15]

My coworker just got divorced. She's $50k in credit card debt and is living with her sister. She told me she's going to buy a house soon and I told her that she'll need a down payment in today's market. She said she would just take another loan from her 401k


Oh yeah, she also went in for an oil change on her 2006 trailblazer and walked out with a newer 2007 chevy SUV instead. Her reason was because she wants to get rid of everything that reminded her of her ex-husband. Understandable to some degree...but WHY get a newer car when you're so far in debt?!?!!

[disneysteve]

She's $50k in credit card debt

She said she would just take another loan from her 401k

walked out with a newer 2007 chevy SUV

Obviously, there is a huge lack of personal responsibility here, but at the same time, some blame has to be placed with lenders. How did she buy that new SUV. I'm sure she didn't pay cash, so she must be financing it. Why did the lender approve a big car loan for someone with 50K in credit card debt and possibly an outstanding 401k loan? This is the same problem that has led to the whole subprime mortgage mess - lenders handing out money to anyone who wants it, regardless of their ability to repay it.

[vsjhoc]

Why did the lender approve a big car loan for someone with 50K in credit card debt and possibly an outstanding 401k loan?

The 401k loan doesn't show up on credit reports, so if she didn't disclose it and they didn't look too closely at her pay stub, the lender wouldn't know about it.

[disneysteve]

The 401k loan doesn't show up on credit reports, so if she didn't disclose it and they didn't look too closely at her pay stub, the lender wouldn't know about it.

That's an awfully big flaw in the credit system. Someone could owe tens of thousands to their 401k and it wouldn't affect their ability to go out and borrow money elsewhere. I wonder if there is any move to close that loophole.

[Diga]

My wife's parents seem to be doing the same thing with her and her sister. We have 4 boys (12 and under) and I work VERY hard to get back on track financially. But every time she or her sister get in a jam, they bail them out of whatever it is, and they never learn, so guess who bails them out now???
Well, I don't bail the sister out, but my days of bailing my wife out are over. I seperated the accounts, she got a full time job, and our credit is improving. The last credit cared gotten, was done in secret (by her) and now she's got that one maxed. It's like pulling teeth to get her to help out with $700 a month in bills. We roughly have 4K coming in and about 3.8k going out. HOW DO YOU SAVE??? I resorted to digging a hole in the back yard, placing a sealed tin can in it and sliding a piece of PVC in the top to save some emergency $$$... I love having money when I NEED it, but I can go 6 months without spending any...Maybe too tight, but I work with retirees who I learn A LOT from regarding missed opportunities...

[jasanderson]

no offense as I'm sure you love your wife but it sounds like you could benefit from some counseling. this is eventually going to place a big strain on your marriage - i am speaking from experience. my inlaws are the same way and i resent that they bail everyone else out but us - im ok with them not bailing us out because it's not their job but it bites when you are married to someone who just runs to mommy instead of figuring it out themselves. what happens someday when they are gone?

[vsjhoc]

That's an awfully big flaw in the credit system. Someone could owe tens of thousands to their 401k and it wouldn't affect their ability to go out and borrow money elsewhere. I wonder if there is any move to close that loophole.

You'd have to get either employers or 401k plan administrators to start reporting to the credit bureaus. I can't see that happening anytime soon.

[disneysteve]

You'd have to get either employers or 401k plan administrators to start reporting to the credit bureaus. I can't see that happening anytime soon.

It just seems that mortgage companies and other lenders wouldn't want to do business without being able to find out what a potential borrower's finances actually look like. I could sit there and say I owe no money when I truly owe tens of thousands. Of course, a mortgage company does look at paystubs, so I guess it would be reflected there, right? But auto lenders don't.

[vsjhoc]

It just seems that mortgage companies and other lenders wouldn't want to do business without being able to find out what a potential borrower's finances actually look like. I could sit there and say I owe no money when I truly owe tens of thousands. Of course, a mortgage company does look at paystubs, so I guess it would be reflected there, right? But auto lenders don't.

I agree, particularly since if the employee leaves the job for any reason, the loan becomes immediately payable in full. But as I pointed out, employers are not going to start paying to report this information to the credit bureaus, just like they are not going to start reporting employee income.

A paystub will generally show a 401k loan. But it will only show the amount of the payment deducted for that pay period, and the total amount deducted for the current year. It doesn't show how much the employee has already paid off, or how much more they owe.