How does this happen?

[greenskeeper]

Talk about Nanny State!!!

I second that. Life is about choices. How does the saying go? "A fool and his money soon go seperate ways" and someone else will make a profit on stupidity....Capitalism at it's best.

TV (and now the internet) are also a problem. All day long on the TV are people who appear "rich" or "living the good life". New car commercials 24/7, etc.

I have to chuckle on the inside at my work, I drive the oldest vehicle by far and pickup O/T whenever available. My co-workers think I have money problems when it's the employees with the shiny new cars paying $500/month that are broke.

[Nutria]

I think that sports leagues should make it mandatory to allocate a certain percentage of an athletes salary to a 30 year annuity that pays only after they retire.

I think the NFL already has something like that in place.

[Nutria]

TV (and now the internet) are also a problem. All day long on the TV are people who appear "rich" or "living the good life". New car commercials 24/7, etc.

Absolutely. It's why I spend so much on DVDs: zero commercials!

(And we own it, so aren't beholden to "rights holders" who might decide to charge such high license fees that Netflix drops the show that we want to watch.)

[snafu]

So what happens when they're 55 y/o and have no retirement plan, no savings, and still saddled with a large mortgage? Most people believe their mortgage payment in it's entirety, reduces their principal. They conveniently forget interest is front loaded, taxes, PMI and often homeowner insurance are tacked on taking money out.

I feel like an invisible minority as a saver. This is the only community I feel comfortable theorizing/talking about saving streams.

LAL, perhaps your friends snticipate a major inheritance from their two sets of parents.

[disneysteve]

I have to chuckle on the inside at my work, I drive the oldest vehicle by far and pickup O/T whenever available. My co-workers think I have money problems when it's the employees with the shiny new cars paying $500/month that are broke.

Same here. I've been at my job for 16 years. I currently own the 2nd car I've had during that span of time. Others have been through 3, 4, and 5 cars during the same period.

[corn18]

That was me. I was making $100k take home and had an interest only mortgage with zero down (no PMI because it was a VA loan) for $450,000. And 2 car loans and $60k of credit card debt. I retired from the military and got a job paying $200k plus my pension of $40k. Then I got a new mortgage for $500k, 4 car loans, a travel trailer loan, a horse trailer loan and I had $100k of credit card debt. Then my daughter started college and we got a loan for $43k and that was just for the first year.

What was I thinking? Not sure. I'm a smart guy and knew I was screwing this up. I knew I should save but didn't. I knew I would have to work until I was dead. And yet I continued. I didn't feel entitled to anything. I wasn't trying to keep up with the Jones. I did keep applying for loans and getting them. I was surprised each time I got a loan because I would have never loaned me money. That's not the lenders fault. That's my fault. All of this was my fault.

We made the decision in 2012 that the stress caused by our financial situation was seriously affecting our lives in a negative way and that's when I started looking for help. I found SA and started asking questions and you guys beat me up pretty bad. I fought it for a while and then started listening. The. I read The Millionaire Next door. I now had the clarity I needed to formulate a plan.

I was lucky or maybe I was good in that I continued to work my way up the corporate ladder and make a metric boatload of money. I could have continued to live it up and by any measure everyone would think I was rich. But I was nearly broke. Since my lowest point, I have paid off all my debt except the mortgage. I am saving enough to retire very happy in 7-10 years. I am so much happier now.

So the chain can be broken. I feel fortunate to have figured it out before I died. I feel stupid for not doing it right in the first place. I am comfortable I won't regress. I regret the fact that I don't have more options to walk away from my job and slow down.

So there's a data point of one.

[creditcardfree]

I second that. Life is about choices. How does the saying go? "A fool and his money soon go seperate ways" and someone else will make a profit on stupidity....Capitalism at it's best.

TV (and now the internet) are also a problem. All day long on the TV are people who appear "rich" or "living the good life". New car commercials 24/7, etc.

I have to chuckle on the inside at my work, I drive the oldest vehicle by far and pickup O/T whenever available. My co-workers think I have money problems when it's the employees with the shiny new cars paying $500/month that are broke.

I think people are super confused about how money works! I went to buy something at Cold Stone Creamery and used my Marriott Rewards card, which has metal in it so it's kind of heavy. The cashier noticed the weight and said 'I always tell people with this card they must have a lot of money'. I replied, "or a lot of debt!" She thought that was funny. I went on to explain I pay the bill in full each month and said you can't judge someone's wealth by what the outside looks like!

In some ways you can judge wealth by the outside. Someone with an older car just might be the wealthy one!

[disneysteve]

used my Marriott Rewards card, which has metal in it so it's kind of heavy.

Those cards are the heaviest around, aren't they? I get comments on it all the time.

[pflyers85]

How do people get around the saving mindset?

Saving is just not enough of a priority for many people. They want the nice house in the good school district, the new cars, vacations, etc and credit/debt not savings enables people to achieve these goals faster. They accumulate so many bills in the process and are paying everyone else when they should be paying themselves first in the form of savings.

[Nutria]

Saving is just not enough of a priority for many people. We want the nice house in the good school district, the new cars, vacations, etc and credit/debt not savings enables people to achieve these goals faster. We accumulate so many bills in the process and are paying everyone else when we should be paying ourselves first in the form of savings.

FTFY. After all, most people came here after being in serious CC debt.

[FLA]

and if the couple in the first post have kids, what are they teaching them about their futures? I'm sure they are not telling those kids to always pay yourself first and all the other things that lead to being fiscally healthy since they aren't practicing them.

my parents didn't really know a lot about money, but they knew enough to pull themselves out of poverty, how to stretch a dollar and to save for the future. My dad said to save for retirement from my very first paycheck but he didn't know about investing. So I did save but luckily an older, wiser nurse dragged me to a meeting about our 403B when I was a newbie. That got me started in investing and then in reading basic financial planning books. Thank God for that woman. We had no 403B match and we had a pitiful pension, because of the pension, I didn't know how important the 403b was.

If I can figure out the basics at 22, there's no excuse for the couple in the first post. They are being willfully ignorant of what the future may hold and it is not likely to be pretty. If you get to 36 and have none of this figured out, unless you change immediately, you are doomed. Unless of course there is an inheritance involved, as someone said. Anyone who banks on that happening is crazy, end of life care can eat up your inheritance in less than a year.

[7Figures]

Just Dumb no other way to put it

[LivingAlmostLarge]

no inheritance.

But another mom at the park who moved to the area was commiserating with me about homes being crazy bidding wars right now. Things in certain local markets are hot. I said I wouldn't participate in a bidding war and she agreed.

Her opinion is that a lot of people are financing their lives on credit. She said they don't finance their life on credit but they can't seem to save a penny. She said my DH makes $185k/year and last year with stock vesting from a layoff, etc. they made $300k and have nothing to show for it. She doesn't know what they can change about their behavior.

They know enough to not charge but not how to save. I was floored $300k and they have no down payment for a house and are renting. She said her husband said it's because they moved and spent a lot on moving, etc.

She didn't seem extravagent with 4 kids and driving an old minivan. So I'm sitting there pondering where the hell did $300k go that you can honestly say you don't have anything to show for it?

When we were earning income I can tell you where our money went. Into savings. We didn't drive it, live in it, or spend it on organic foods, vacations, and private school. It was eye opening that at $185k (or $300k) she could honestly say they have no house down payment and thus aren't buying (they have that much common sense she said). And they have no idea where their money goes but they don't charge stuff at least on $185k.

[disneysteve]

they made $300k and have nothing to show for it.

So many people think if they could just earn $50,000 or $100,000 or $200,000 or whatever number higher than they currently earn, all of their financial problems would be solved.

The reality is that very few people in this country have an income problem. Most have a spending problem. More money won't fix that. It will just make the problem even worse.

How anyone could earn 300K and have no savings to show for it is beyond me. If you gave me a raise tomorrow to 300K, I can guarantee you that in about a year, we'd have $1 million in savings (by adding to what we already have). In 5 years we'd have $2 million. Soon after that, I'd be retired and set for life.

[tripods68]

Side note on Rewards.

Credit Card Rewards, Points, are terrible for people's finances. Don't get me wrong, its a great marketing campaign for those that work in that industry or know the insight of this industry.

I'm not hating on people that uses points responsible, or the people in SA forum. However, there are majority of college students unaware of the "pitfalls" of point system. Only after they charged so much, debt becomes huge, trapped and unable to escape for years. The truth is you to charge so much $$ every month to built points over time enough to 'fly free'. In the end, is it worth it? I don't think so.