I don't know where my money goes

[GoodSteward]

Even a "boring" car can often be a source of trouble. I've learned that over the years watching people around me do stupid things. Most commonly is buying a car with a ridiculous loan, and then a year or two later deciding they didn't really like that car so they trade it in and roll over the loan balance into a new loan. That puts them even deeper in the hole plus they then owe way more than the car is worth so they're really stuck.

This is a prime example of how credit can actually be a weapon of financial destruction with a car dealer. The better it is the more you can buy without anything down, so the more they can up the price and get away with it. The amount you can borrow on a used car is based on the loan value and your credit(plus or minus down payment). If you have good credit, the amount of the loan can go much higher than the loan value and even forego a down payment requirement. If you have not so good credit, you have to have a down payment to make the financed amount closer to the loan value(or just not charge as much for the car). That's why people who have good credit think it is a good thing when they can buy a lot of car without a down payment even when they rolled the old into the new. This is also why it is dangerous to just walk into a dealership and give them your SS# to pull your credit.

Never negotiate on payment, and never buy on emotion. Research ahead of time and be patient.

[GoodSteward]

Along with my previous post I am reminded of something I learend this Sunday. I was talking to someone who is on a fixed income, no savings, and had a paid for car. They are the ones who had a settlement over 6 figures just a year and a half ago and let their car go back to the bank because they didn't know they could trade it in. This is what they are working with.

They had a paid for car and just recently told me they were having trouble making it month to month. They only pull in around 2k$ on social security each month and don't have a savings account. They bought a nearly new 2015 Ford Focus and the car payment is 370$!! They were proud they didn't have to have a down payment. WHAT ?!?!?!! You couldn't even afford the small charity you were paying before of 50$ a month and think you can afford a nearly 400$ a month payment!?!?

[HundredK]

that was me, I'm sorry.

seemed like a good thread, but if I remember right (and in hindsight) I may have misinterpreted that all suggestions were being rejected like we usually see here.

No worries, Jluke. I probably shouldn't have jumped in that fast, and probably should have lurked longer.

I think it's just a really hard thing all around. Can't speak for others, but for me, I put a lot of time and effort into pulling the info together, and it took some guts to post it here, and of course the whole process of doing that was fraught with guilt and regret and awfulness. And so to have people negatively commenting about how we got to the situation we got to, well, that didn't sit so well with me.

I do understand wanting to encourage people to evaluate any behavioral issues that might be present, but I also really wish it wasn't such a strong focus, because it's rather offputting when your goal is to start fresh and feel positive and productive with what you're doing to move forward.

I imagine by the time people get to the point of asking for help on here, they've probably already evaluated the behavioral issues that got them there in the first place, and maybe they just need help and encouragement to stay on the right track moving forward.

I'm sure it's normal human curiosity to want to know exactly how someone got into X amount of debt and what the hell is wrong with them for doing so. But I think a gentle mention of "have you evaluated behavioral issues" probably helps, while repeatedly being asked what the hell is wrong with you for getting to this point does not help.

[FLA]

I think the above is a post we all need to read. I don't think any of us want to come off as judgmental and critical. Yeah, we probably will want to know how a person came to be in their situation but there are nice ways to ask.

[LivingAlmostLarge]

I have to say though that sometimes I stare HARD at crazy.

Recently while working out another mom whose kiddo goes to daycare with my kiddo was telling me about her house hunt. She's 32 with 2 kids and stays at home. I know approximately what her husband makes because she was telling another mom and I was sitting right there. Luckily my DH made 0 and wasn't working so nothing to share other than they knew were had no income!

Anyway I told her we're looking for a home to stay and raise the kids. I have a few needs and lots of wants but everything is a compromise. I've learned that no one (well very select) people can have everything. So I'm trying to figure it out.

She says well my budget now is $800-$1m. I can't get everything I want so in 10 years we'll probably move because I can get my $2m house with everything. I sat there and said it might be difficult to afford that much in 10 years and her answer was of course my DH will be making a lot more and we'll have equity in the house. Mind you since they barely make move than $100k I'm already struggling biting my tongue on why are you buying so much house?

But I do say that being nearly 10 years older I have no desire to move up anymore. This is it. And financially I don't care if we're more set in 10 years. College is coming and how do you know you'll double your salary in 10 years? That's a tough thing to do.

I have to add this same mom lost her house in the 2007 crash and they allowed the bank to foreclose. I feel like deja vu is happening and this same couple will make the same bad decisions. When I asked why did they walk away because they had a 2nd kid in a 2 bd condo. I was like "that's pretty doable to stay put." Her answer "it was too small." I know more than a few friends where we lived who were raising their kids in that size place for years if not permanently. Her 2 bd was larger than our 3 bd was with parking and a yard. I think it's a matter of perspective.

[GoodSteward]

I have to say though that sometimes I stare HARD at crazy.

Recently while working out another mom whose kiddo goes to daycare with my kiddo was telling me about her house hunt. She's 32 with 2 kids and stays at home. I know approximately what her husband makes because she was telling another mom and I was sitting right there. Luckily my DH made 0 and wasn't working so nothing to share other than they knew were had no income!

Anyway I told her we're looking for a home to stay and raise the kids. I have a few needs and lots of wants but everything is a compromise. I've learned that no one (well very select) people can have everything. So I'm trying to figure it out.

She says well my budget now is $800-$1m. I can't get everything I want so in 10 years we'll probably move because I can get my $2m house with everything. I sat there and said it might be difficult to afford that much in 10 years and her answer was of course my DH will be making a lot more and we'll have equity in the house. Mind you since they barely make move than $100k I'm already struggling biting my tongue on why are you buying so much house?

But I do say that being nearly 10 years older I have no desire to move up anymore. This is it. And financially I don't care if we're more set in 10 years. College is coming and how do you know you'll double your salary in 10 years? That's a tough thing to do.

I have to add this same mom lost her house in the 2007 crash and they allowed the bank to foreclose. I feel like deja vu is happening and this same couple will make the same bad decisions. When I asked why did they walk away because they had a 2nd kid in a 2 bd condo. I was like "that's pretty doable to stay put." Her answer "it was too small." I know more than a few friends where we lived who were raising their kids in that size place for years if not permanently. Her 2 bd was larger than our 3 bd was with parking and a yard. I think it's a matter of perspective.

First world-itis at it's best. Wow...

[disneysteve]

She says well my budget now is $800-$1m.

they barely make move than $100k

How can they possibly buy an 800K house on a 100K income? Any bank that makes that loan is nuts, but I'm sure they're out there, which is a big part of what led to the housing mess in the first place.

[pflyers85]

When I asked why did they walk away because they had a 2nd kid in a 2 bd condo. I was like "that's pretty doable to stay put." Her answer "it was too small." I know more than a few friends where we lived who were raising their kids in that size place for years if not permanently. Her 2 bd was larger than our 3 bd was with parking and a yard. I think it's a matter of perspective.

My girlfriend and I will occasionally watch House Hunters International and when the couple is moving to a European country its always the same complaint... "OMG its so small in here." The problem is many Americans have too much stuff, do not efficiently utilize the space they have, or both.

[Joan.of.the.Arch]

House size-- When we first bought our house we immediately began getting comments about it. Some, knowing that we'd moved from a small apartment said things like "Joan and her husband just like little places." Some said, "That will work for a starter house. Fix it up; sell it; move." Now 23 years later and empty nesters in the same house, we still get the question, "Why is your house so small? Do you want a bigger place?"

But to top it off, our son and his new wife (also raised in a small house), have themselves bought a similarly sized place and now we get the questions about their house! "Are they going to have kids? It's so small. What will they do?" It is a small 3 bedroom house with a fenced yard, 2 car garage, basement with built-in storage, terraced patio. Good grief.

Coming out of the [childhood] circumstances I did, I naturally worry for the future. Buying a house we could easily afford was the only way I could have a semblance of peace of mind over the years. While sometimes I wish we had more common space (instead of bigger bedrooms), I am totally glad to have gone small and affordable. I feel supported by my house, not burdened by it.

[MonkeyMama]

It is a small 3 bedroom house with a fenced yard, 2 car garage, basement with built-in storage, terraced patio. Good grief.

Yeesh. I guess it's just relative. That's what I would call a large home.

[DaveInPgh]

Yeesh. I guess it's just relative. That's what I would call a large home.

Why? Because it has 3 bedrooms?

There are a lot of very small 3 bedroom houses in my area.

[disneysteve]

There are a lot of very small 3 bedroom houses in my area.

I was thinking the same thing. I grew up in Philadelphia and there were tons of quite small 3-bedroom homes, although few if any with 2-car garages. They all had 1-car garages but that was standard when they were built in the 40s and 50s.

[MonkeyMama]

Why? Because it has 3 bedrooms?

Because it's a house and it has a basement, and a garage.

Like I said, it's relative. Land is insane expensive where I am from, so owning a house is a luxury. We don't have basements, so that just adds space that we are not used to.

[DaveInPgh]

I was thinking the same thing. I grew up in Philadelphia and there were tons of quite small 3-bedroom homes, although few if any with 2-car garages. They all had 1-car garages but that was standard when they were built in the 40s and 50s.

Yep, it is all about the square footage. The room size was one of the first things I looked at when I would receive the real estate listings. A 9 x 9 or 10 x 8 bedroom is really small, and some of the houses would have two of their three bedrooms that size with a "master" not much bigger.

And you have the same type of issues with garages. When we were looking to buy our current home, we were driving a minivan. I came across a lot of garages that would have been impossible to fit in and actually open the doors.

[DaveInPgh]

Because it's a house and it has a basement, and a garage.

Like I said, it's relative. Land is insane expensive where I am from, so owning a house is a luxury.

Sounds like you are comparing apartments to houses then. Of course a tiny 3br is going to seem big if you are used to living in an apartment.