Oh I'm so Embarrassed!

[FocusOnFICO]

Hauling, some of the answers are actually in The Story of Stuff.  Google it and you'll be led to a video put together that, in my opinion, accurately describes how modern consumerism came to be.

I very much agree with your comments---and questions.

[marty56]

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@haulingthescoreup wrote:
One of the real tragedies that has occurred since I was a kid is that somehow, the currently-accepted standard of living generally requires two incomes to maintain.

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I grew up in Long Island and I could not afford to move back there and buy a home in the neighborhood I grew up in.  LOL funny you mentioned the senior trip thing.  My middle sister is sending her son down there for a 2 week sailboat trip.  He is only a jr though.

[Anonymous]

Hauling

I could not agree with you more. Being in construction I have been wondering for several years why even starter homes are over twice the size of my home and who can afford them as first time buyers. There have not been any homes built in my area that I would consider a first time buyers home in a decade. Starter homes were in the range of $450,000 in '06 and most buyers bought new cars and furnishings thereafter. Knowing some of these people I knew their combined household income was lower that my own yet they were given loans for everything. It looks like they are doing great (and many have stated "all was good" on this site) I knew it was only a matter of time. Now things have changed dramatically and we are realizing that we all can't afford to have everything now.

I have seen a couple recessions before and new this one would be worse than I have seen before but this is worse than I imagined. I am just glad and LUCKY to still have a job. I think most of us got caught up in it to some extent. It's hard to resist temptation and peer pressure to boot. How many of you were told everyone else has one or to loosen the purse strings a little? Well I am here because I did it a little too. I have been careful about making sure I have assets to offset any debit and could easily sell a few thing to pay off my debit. There are a lot of people that have nothing to show for the debit and that makes it that much harder for them.

I hope our children don't fall into the same traps.

[Anonymous]

TopHat we want to hear from you. Where have you decided to go from here? FocusOnFico, You bring up a fantastic point. I would love to hear what TopHat's decided to do to further on their current situation, I worry greatly that this one post is a true look at American society. And as someone else here said. Its all just stuff. I am battling breast cancer and downsized my life even more than I already had because I would be damned if I was going to let this diesease get the best of me emotional physically or financially. When I first got diagnosised I immediately starting looking for all the financial assistance I could get. Even though I had a job I didn't qualify for STD. The funny thing is the social workers at the hospitals the people who are supposed to help me come up with answers, told me to just use my credit cards!!!!! I couldn't believe this response. I was blown away. And I was giving these answers because I still had money in my bank account. They told me not to worry right now. Ridiculous. Thank God My mom and I are very creative. I was able to find many ways to keep myself above water and paid my car payment several months in advance. And thank God also at 30 I was thinking ahead and picked a **bleep** good health insurance with my work. A year into my diesease. I have come so far and All my bills are still paid. And if I had been living out of my means the way this OP it seems has been I would have never made it. The most important thing I think is to not be ashamed or embarrassed to ask for help when you need it.

[MattH]

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@Karatz wrote:

All these messages seem the have the same thing in common: they give different perspectives on how to get out of this problem. Problem is, it seems most, if not all, give no prospective on how not to get into this problem. With that said, I'd venture to wager that 100k being dropped on your doorstep for free would only find you back in this forum, or another similar forum some time in the future from now with the same problem.

The problem is you. Nothing is ever going to change beyond the short stints of perceived change until you make that decision for yourself. You're like the fat person that wants to look thin but never realizes that what's in the fridge needs to change and that walking for 15 minutes with a heart rate of 110 isn't cardio exercise. Yes, you can clean out your fridge, but tomorrow you have to visit the grocery store again.

...

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Words of wisdom indeed.  This sort of thing is precisely why so many lottery winners end up getting into major financial trouble: they think a one-time cash infusion enables them to stop thinking about money.  If somebody plopped $100K on my wife and myself, we certainly would not refuse it, but actually it would not be a life-changing event for us either: with or without that $100K, we need to live within our means.  So if we got $100K, we'd invest it and only spend whatever income it earned for us -- so even if we could find a prudent investment that earned 10% that would be an additional $10K to spend from that hypothetical lump sum.  And of course this hypothetical $100K wouldn't be $100K after taxes.

How lottery winners can get into trouble is after taxes and paying off their debts they look at the remaining money, probably more dollars than they ever had before, and think "now I can relax."  But if what they spend, minus whatever other income they have, exceeds what their invested cash is earning then that cash will vanish.  And when the cash has run out, they have become accustomed to living a life they cannot afford.

[MattH]

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@haulingthescoreup wrote:
One of the real tragedies that has occurred since I was a kid is that somehow, the currently-accepted standard of living generally requires two incomes to maintain.

The smartest thing that any couple can do is live on one income and save the other.

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My wife and I don't quite save all of her income, we save maybe half of her after-tax income.  But the important thing is, we could keep a roof over our heads and feed ourselves should either of us get laid off.  Many people cannot, and that is very unfortunate.

I think there are multiple reasons for this, but the basic underlying reality is a steadily increasing mismatch between income and expectations.  For some decades, most of the economic growth in the US (and, to a lesser extent, in other rich countries) has gone to the upper end of the income distribution so the per-hour earnings of the ordinary worker have barely kept pace with inflation.  For a while, households could still keep increasing their spending every year by increasing the number of hours worked (ie., more dual-income households and more overtime), but that trend eventually reached its limit.  For many households, real income has not increased much in quite a while.

Then we had a series of bubbles in stocks, in housing, in consumer credit, in business debt, in government spending, etc.  The details of these bubbles were and are extremely complex, but fundamentally all of them are about people desperately trying to deny fiscal reality at all levels from the individual through the company to the entire nation.  We The People have postponed some very hard questions until they cannot be postponed any longer.  Now it is impossible to pretend the American middle-class crunch can be addressed without somebody paying the price.  If the economy cannot grow fast enough to meet expectations (and neither political party seems to have ways of making that happen) then mathematically one or both of two things must happen: the middle class cuts spending to match stagnant incomes, OR the income distribution changes so the middle and bottom get more and the top gets less.

[woodstock]

Here's my suggestion to anyone who's been frustrated with their spouse for years while they've racked up tens of thousands in credit card debt.  This is for those of us who have spent years robbing Peter to pay Paul and worked 80 hour weeks to try and make enough money to keep up while that lousy bum was out charging everything he or she could find.  Divorce their butt.  It is your only (legal) hope.

This advice comes from someone (me) who had credit cards of over $185,000 and a total debt load of over $750,000.  I waited almost 20 years before I filed and I wish I had done it years sooner.  I was so broke when I finally filed I had to live in my car for over a year.  This is while I was working every overtime shift I could get my hands on and making over $170,000/year.

It wasn't an easy decision to make, and I've paid the price for waiting so long.  Now that I'm divorced I have a nice apartment, the credit cards are *only* $115,000 (they'll be paid off in under 3 years) and I sleep well at night knowing my financial situation is improving with each paycheck.

The bad news:  I have to pay the ex $160,000 over the next four years.  I have no furniture and sleep on the floor.  I was able to buy 2 chairs in a bag at Wal-Mart for $10 so now I have something to sit on when I eat dinner. 

If I hadn't left I would probably be close to $1M in the hole and the house would be in foreclosure.  It is the smartest thing I have ever done.

The only thing I have yet to figure out is how to refinance some of the highest interest rate credit cards.  Due to my high debt load my FICO is in the high 500s and as a result can't get anyone to talk to me about some type of debt consolidation loan.  The interest rates on the cards range from 7% to 23%.  I'm paying $1,300/month in interest.  Once I've paid off enough of the debt to get my FICO up the highest interest cards will probably be paid off.  Frustrating catch-22.  I would appreciate any advice people may have on getting a consolidation loan in my situation.  If someone were to actually look at my credit situation and what has happened to me I think they would see I am a good credit risk.

In conclusion, my advice comes from someone who was on the brink of disaster and is now well on the road to recovery.  I hope you're situation is not as dire as mine, but if it isn't don't wait until it is.  You don't want to be in the position I was in 2 years ago.  I feel fortunately to have made it through in one piece.

[creditwherecreditisdue]

1) Why were/are you solely responsible for repaying this debt? Is your ex dead? Even then you might not be!

2) Why on earth would you not declare bankruptcy. Please give as cogent an explanation as possible.

[creditwherecreditisdue]

I, too, note with considerable interest that the OP has not reposted in this thread.

[haulingthescoreup]

All I can say is (again), please be kind to the newbies.

Not everyone wants to be scolded when they get the nerve up to post about their messes.

It's like raising kids --you can use constructive criticism ("speak the truth in love") to help them figure out how to get out of their messes and not get back in them again, or you can yell at them or put them down.