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Stories about people beyond means burned in debt?

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Stories about people beyond means burned in debt?

I personally speaking have an interest in people that are already burned on debt, but still living beyond their means and without any desire to improve. Personally, there are like five cases in my own family, mostly cousins after getting their independence. Four of them recognized their mistake and are still paying off their debts like seven years after that (I will not include student loans here, I just refer to revolving credit debt) But one cousin still says that is "the way he lives" and until three months his job barely covered 70% of his expenses. Now he has a better job but I am afraid that he will just spend the extra money and finish in the same situation, considering that he doesn't have medical insurance at all nor retirement savings, but a nice car and lives in an expensive zone in Florida (renting), I would like to hear your stories about the topic.
Message 1 of 18
17 REPLIES 17
Valued Contributor

Re: Stories about people beyond means burned in debt?

Personally, I've known of a few acquaintances that generally live above their means, the typical Manhattan apartment, fancy car, etc. I've spoken to them about their financial situation a few times but they don't really have a care for it. They live for today and not worry about tomorrow. For people like that, there isn't much you can do until they realize their situation themselves.


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Message 2 of 18
Valued Contributor

Re: Stories about people beyond means burned in debt?


@xaximus wrote:
Personally, I've known of a few acquaintances that generally live above their means, the typical Manhattan apartment, fancy car, etc. I've spoken to them about their financial situation a few times but they don't really have a care for it. They live for today and not worry about tomorrow. For people like that, there isn't much you can do until they realize their situation themselves.

^^^^^^ sooooooo many examples in NYC. I used to be one of them in previous relationship and before my BK. The bulk of my debt was actually incurred while I was earning the most money I ever have from living this life. It's also really easy to rationalize spending on luxuries and conveniences when you're working the typical 60+ hour/week NYC schedule. 

 

Yes, it's expensive here to start with, but I'll go as far as to say 95% of the people I know there are making 6 figures + and spending every dollar they have and then some. No retirement, no savings. Spending thousands per month on entertainment and travel. It's terrifying.

 

 

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Message 3 of 18
Valued Contributor

Re: Stories about people beyond means burned in debt?


@Dracomael wrote:
I personally speaking have an interest in people that are already burned on debt, but still living beyond their means and without any desire to improve. Personally, there are like five cases in my own family, mostly cousins after getting their independence. Four of them recognized their mistake and are still paying off their debts like seven years after that (I will not include student loans here, I just refer to revolving credit debt) But one cousin still says that is "the way he lives" and until three months his job barely covered 70% of his expenses. Now he has a better job but I am afraid that he will just spend the extra money and finish in the same situation, considering that he doesn't have medical insurance at all nor retirement savings, but a nice car and lives in an expensive zone in Florida (renting), I would like to hear your stories about the topic.

The cousin you describe sadly is the rule rather than the exception in the US. The problem, in a nutshell, comes down to two things: failure to perform delayed gratification, and insecurity.

 

The delayed gratification component is seen with people who blow bonuses and windfalls almost immediately. Saving for something even 5 years down the road is impossible because they need their hit now. YOLO is a calling card for these fools. These are the bros, right out of college, whose first order of business is buying a $100,000 car to have fun in. The word "luxury" perks them up, and everything has to be nice and good because they earned it! No reason to sweat the student loan when they can defer or do a forebearance. When repaying a debt, they'll do the minimum payments because any more would deprive them of fun money. When a bonus comes around, it's immediately going to a trip or a large retail purchase. They get a credit card with a $10,000 limit and think that means they now have $10,000 to spend.

 

The insecure type deep down inside wants to save and have a better future, but it just kills them to know Seth across the street has a newer TV or a faster car. They live way beyond their means because they have a facade of superiority to maintain. They can't have a backyard BBQ just to have friends over, no...there has to be something to show off like a new grill, smoker, or pool. They have to post every single destination they travel to on social media, and their pictures are overwhelmingly of selfies in 'prestigious' locations, fancy dinners, or the hotel suite with a scenic view. Any pictures on the plane must show their lie-flat seat with them sipping alcohol. If the Smith family down the road went to Disneyworld and stayed at a villa, this person has to stay at a bungalow. This type will blow their paycheck on a pair of Laboutins to look important and then tell friends they're on a cleanse or diet when they can't afford to eat for a week.

 

If I've learned one thing posting on these forums, it's that these people cannot be reasoned with or corrected. They have to learn the hard way, sometimes repeatedly, to understand how finances work.

Message 4 of 18
Frequent Contributor

Re: Stories about people beyond means burned in debt?


@Dracomael wrote:
I personally speaking have an interest in people that are already burned on debt, but still living beyond their means and without any desire to improve. Personally, there are like five cases in my own family, mostly cousins after getting their independence. Four of them recognized their mistake and are still paying off their debts like seven years after that (I will not include student loans here, I just refer to revolving credit debt) But one cousin still says that is "the way he lives" and until three months his job barely covered 70% of his expenses. Now he has a better job but I am afraid that he will just spend the extra money and finish in the same situation, considering that he doesn't have medical insurance at all nor retirement savings, but a nice car and lives in an expensive zone in Florida (renting), I would like to hear your stories about the topic.

I know a lot of physicians who live like that. They pay $300,000 for their education, by the time they finish residency they end up with $400,000 in debt. Instead of paying off their loans they make minimum payments to "qualify" towards loan forgiveness. Over period of 10, 15 or 20 years they make 300,000 in minimum payments. Their debt is not forgivnen but the amount doubles from 300,000 to 600,000. They live in expensive states, expensive cities, drive leases especially BMW, Mercedes, Porsche, buy a house and put themselves even more in debt. I know doctors who are 55 and still have student loan debt. 

Message 5 of 18
New Contributor

Re: Stories about people beyond means burned in debt?


@Green456 wrote:

@Dracomael wrote:
I personally speaking have an interest in people that are already burned on debt, but still living beyond their means and without any desire to improve. Personally, there are like five cases in my own family, mostly cousins after getting their independence. Four of them recognized their mistake and are still paying off their debts like seven years after that (I will not include student loans here, I just refer to revolving credit debt) But one cousin still says that is "the way he lives" and until three months his job barely covered 70% of his expenses. Now he has a better job but I am afraid that he will just spend the extra money and finish in the same situation, considering that he doesn't have medical insurance at all nor retirement savings, but a nice car and lives in an expensive zone in Florida (renting), I would like to hear your stories about the topic.

I know a lot of physicians who live like that. They pay $300,000 for their education, by the time they finish residency they end up with $400,000 in debt. Instead of paying off their loans they make minimum payments to "qualify" towards loan forgiveness. Over period of 10, 15 or 20 years they make 300,000 in minimum payments. Their debt is not forgivnen but the amount doubles from 300,000 to 600,000. They live in expensive states, expensive cities, drive leases especially BMW, Mercedes, Porsche, buy a house and put themselves even more in debt. I know doctors who are 55 and still have student loan debt. 


I wonder how much time thet are going to be paying off that. And with no saving and so huge debt their future looks pretty dark. As other answers said, I am impressed how common this type of people ¨I can pay it later, but I need that 100 000 car/other asset that will deprecate¨ are.

Message 6 of 18
Frequent Contributor

Re: Stories about people beyond means burned in debt?


@Dracomael wrote:

@Green456 wrote:

@Dracomael wrote:
I personally speaking have an interest in people that are already burned on debt, but still living beyond their means and without any desire to improve. Personally, there are like five cases in my own family, mostly cousins after getting their independence. Four of them recognized their mistake and are still paying off their debts like seven years after that (I will not include student loans here, I just refer to revolving credit debt) But one cousin still says that is "the way he lives" and until three months his job barely covered 70% of his expenses. Now he has a better job but I am afraid that he will just spend the extra money and finish in the same situation, considering that he doesn't have medical insurance at all nor retirement savings, but a nice car and lives in an expensive zone in Florida (renting), I would like to hear your stories about the topic.

I know a lot of physicians who live like that. They pay $300,000 for their education, by the time they finish residency they end up with $400,000 in debt. Instead of paying off their loans they make minimum payments to "qualify" towards loan forgiveness. Over period of 10, 15 or 20 years they make 300,000 in minimum payments. Their debt is not forgivnen but the amount doubles from 300,000 to 600,000. They live in expensive states, expensive cities, drive leases especially BMW, Mercedes, Porsche, buy a house and put themselves even more in debt. I know doctors who are 55 and still have student loan debt. 


I wonder how much time thet are going to be paying off that. And with no saving and so huge debt their future looks pretty dark. As other answers said, I am impressed how common this type of people ¨I can pay it later, but I need that 100 000 car/other asset that will deprecate¨ are.


I know a few who will never pay off their debt. They will have to pay 15% of their social security and 401k towards their loans and when they die whatever assets they have sized to pay off whatever debt they have. 
We live in a society that encourages debt. 
I lived like that too. I started following Dave Ramsey. The guy literally changed our lives around. Now I don't follow him to the point, otherwise I wouldn't be in this forum.

Message 7 of 18
Regular Contributor

Re: Stories about people beyond means burned in debt?


@iced wrote:

@Dracomael wrote:
I personally speaking have an interest in people that are already burned on debt, but still living beyond their means and without any desire to improve. Personally, there are like five cases in my own family, mostly cousins after getting their independence. Four of them recognized their mistake and are still paying off their debts like seven years after that (I will not include student loans here, I just refer to revolving credit debt) But one cousin still says that is "the way he lives" and until three months his job barely covered 70% of his expenses. Now he has a better job but I am afraid that he will just spend the extra money and finish in the same situation, considering that he doesn't have medical insurance at all nor retirement savings, but a nice car and lives in an expensive zone in Florida (renting), I would like to hear your stories about the topic.

 This type will blow their paycheck on a pair of Laboutins to look important and then tell friends they're on a cleanse or diet when they can't afford to eat for a week.

 

This part made me laugh! Smiley Very Happy Smiley Very Happy

 


 







Message 8 of 18
New Contributor

Re: Stories about people beyond means burned in debt?

As I heard once I don't know where: Too many people spend too much money trying to impress people they don't even like or something like that 🤣🤣🤣
Message 9 of 18
Frequent Contributor

Re: Stories about people beyond means burned in debt?


@xaximus wrote:
Personally, I've known of a few acquaintances that generally live above their means, the typical Manhattan apartment, fancy car, etc. I've spoken to them about their financial situation a few times but they don't really have a care for it. They live for today and not worry about tomorrow. For people like that, there isn't much you can do until they realize their situation themselves.

A Manhattan apartment and a fancy car?  Now that is frivolous spending.  

 

Message 10 of 18
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