@JTC-137 wrote:
No debt equals more cash though. One could save and pay cash for a modest home even with a modest income with a few years of frugal living and dedicated saving. Alternatively, there are lenders that will underwrite a mortgage for those with no score and cash to put down.
That very much depends where you live. I don't even live in a good section of LA (there are friends even that refuse to come visit me because of the gangs that were here 25ish years ago), and people are going to come up with 450k cash for a 2/2 condo 1200 sq ft condo? So I have to get an Amazon Locker to keep some packages from wandering off, compared to spending twice as much in a good neighborhood? Bleck.
I'm coming around to the idea of small places, I have two jobs working from home and unless I need a monitor it's not lost on me I spend a non-trivial amount of time in one room anyway: if I move to SF I'm buying a postage stamp on the order of 500 sq ft and I'll be fine, but even that's a stretch to pay cash for: selling my current house, liquidating all the non-retirement accounts I could probably swing it in Oakland with some left over but I think that misses the larger point still.
Ultimately getting that first step into the mortgage market is where families start accumulating wealth: delaying that by literally years possibly decades to purchase a home as a result of not establishing credit makes no sense especially when just throwing rent away in many areas... you don't even have to really use the credit cards other than some small habit around the margin (the aforementioned occasional Starbucks or similar).
As a result, being anti-credit is just, well, sub-optimal in the extreme.
Personally, as others have said, I'm not a fan of the Dave Ramsay approach. Credit is important but one needs to be smart and responsible with it. I've moved from high 6 figure jobs down to 50K job and then back into 6 figures now. I've always tried and maintained a stable yet simple life. Currently now, I save almost one whole paycheck every month (bi-weekly, 2 checks per month). I always try to bring down my expenses, even if it's a few dollars. I'm constantly calling every company to see if they have better deals. Simple example - I recently switched cable service providers from CableVision to FiOS simply because CableVision wouldn't give me another deal. It's now been a year and they constantly send me mailers and have called me to bring me back. I've told them, beat the price I have and we'll talk. I think the issue today is so much money is wasted for frivolous expenses. I do enjoy Starbucks myself and frequent it around 5-6 times a month, but it's money I have budgeted for it.
I think the issue really falls into people not understanding and knowing their expenses compared to what they make. One of my coworkers lives paycheck to paycheck simply because he doesn't budget. He doesn't know what he's spending and with 2 kids and a wife (that doesn't work nor cares on how she spends money), he's constantly down to his like $100. I've seen his expenses and at times, his expenses for food and other shopping (kids clothing, shoes, toys, etc), is nearly a grand if not more a month. His wife refuses to get cheaper non-branded stuff cause she "read" somewhere that it's not as good as the branded stuff. I think this is common with people today. Many people think they make x, they need to spend x every month. They don't realize they should be building a savings and thinking about the future. Too many people live for the moment and not realize that doesn't work.
I think the issue really falls into people not understanding and knowing their expenses compared to what they make. One of my coworkers lives paycheck to paycheck simply because he doesn't budget. He doesn't know what he's spending and with 2 kids and a wife (that doesn't work nor cares on how she spends money), he's constantly down to his like $100. I've seen his expenses and at times, his expenses for food and other shopping (kids clothing, shoes, toys, etc), is nearly a grand if not more a month. His wife refuses to get cheaper non-branded stuff cause she "read" somewhere that it's not as good as the branded stuff. I think this is common with people today. Many people think they make x, they need to spend x every month. They don't realize they should be building a savings and thinking about the future. Too many people live for the moment and not realize that doesn't work.
At some point you have to be honest about your life.
I am spending around 800 in monthly food expenses, but frankly that is offset by more billable hours or even career development instead of cooking which right now in my life I have more than I could rationally want between two jobs.
If that changes I will be slashing that food budget, but for now given that a quality meal service allows me to push the envelope when it comes to trying to be a $20 whore, it works for me.
End of the day pick what you want out of life and optimize for it: if being comfortable in your after work years is a goal, then start optimizing for that now as less spent today is a whole lot more tomorrow.
Though I am about to go across the street for a Starbucks now, F’n dragging and just got a crapload of, well, crap dropped on me at one of the gigs... meh, must stay focused, 3 more years.
I am spending around 800 in monthly food expenses, but frankly that is offset by more billable hours or even career development instead of cooking which right now in my life I have more than I could rationally want between two jobs.
If that changes I will be slashing that food budget, but for now given that a quality meal service allows me to push the envelope when it comes to trying to be a $20 whore, it works for me.
End of the day pick what you want out of life and optimize for it: if being comfortable in your after work years is a goal, then start optimizing for that now as less spent today is a whole lot more tomorrow.
Though I am about to go across the street for a Starbucks now, F’n dragging and just got a crapload of, well, crap dropped on me at one of the gigs... meh, must stay focused, 3 more years.
