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Why aren't people more financially responsible?

Valued Contributor

Re: Why aren't people more financially responsible?

Well iced...it may have more to do with where I live. I could live OK here in South Carolina on my 2090 dollars a month in SSDI alone. My monthly bills including mortgage, tv, phones, power, water, insurance, taxes and all debts is only about 1300 per month. Being single, groceries run about 400 per month at most. I do not however live that frugally as I use about 1500 per month of the 401k, but it makes about 800 in interest so the balance only drops about 700 per month or 8400 per year. At that rate, even with the balance and interest dropping every year it should last at least 40 years...and since I'm 60...and all my debts will be paid in about 2 more years which will decrease my monthly expenses 700 dollars. I buy myself anything I want, but since I am disabled a very seldom even leave home, I still do not spend a lot.





TU fico08=814 11/10/18
EX fico08=796 10/31/18
EQ fico08=813 10/04/18
EX fico09=803 10/03/18
EQ fico bankcard08=831 10/23/18
Garden since 07/02/18
Message 21 of 65
Moderator

Re: Why aren't people more financially responsible?

Good point iced.

 

sarge: I'm sort of in the same boat after I realized that kids aren't in the cards.  If I didn't have my mortgage, and I werent picking up a new car, fact is my life could be sorted with a few grand a month... but in 12 years (age 55 at that point), all of that is paid off and I expect the rest of my expense profile is still going to be pretty close to what it is now, which is to say pretty low.

 

Good budgetting and "tight" fiscal policy = not that expensive to live, basically opting out of the standard consumer lifestyle that's being pushed at us from all sides.

 

Getting sorely tempted to just pickup 2 jobs for the next two to three years, throw cash at the mortgage and the soon to be car, and then just sell enough equities to cover the rest of the outstanding mortgage / auto marker, and go find something completely different to do with my life.

 

Actually, I could almost do that now if I just sold the condo and moved to someplace cheaper that has a good school.  Hrm.  




        
Message 22 of 65
Valued Contributor

Re: Why aren't people more financially responsible?


@Revelate wrote:

Good point iced.

 

sarge: I'm sort of in the same boat after I realized that kids aren't in the cards.  If I didn't have my mortgage, and I werent picking up a new car, fact is my life could be sorted with a few grand a month... but in 12 years (age 55 at that point), all of that is paid off and I expect the rest of my expense profile is still going to be pretty close to what it is now, which is to say pretty low.

 

Good budgetting and "tight" fiscal policy = not that expensive to live, basically opting out of the standard consumer lifestyle that's being pushed at us from all sides.

 

Getting sorely tempted to just pickup 2 jobs for the next two to three years, throw cash at the mortgage and the soon to be car, and then just sell enough equities to cover the rest of the outstanding mortgage / auto marker, and go find something completely different to do with my life.

 

Actually, I could almost do that now if I just sold the condo and moved to someplace cheaper that has a good school.  Hrm.  


@Revelate...so you are 43, and have no kids. Why do you need an someplace with a good school??? That part of your post has me confused.





TU fico08=814 11/10/18
EX fico08=796 10/31/18
EQ fico08=813 10/04/18
EX fico09=803 10/03/18
EQ fico bankcard08=831 10/23/18
Garden since 07/02/18
Message 23 of 65
Valued Contributor

Re: Why aren't people more financially responsible?


@sarge12 wrote:

@Revelate

@Revelate...so you are 43, and have no kids. Why do you need an someplace with a good school??? That part of your post has me confused.


Possibly for the same reason I do (also in my 40s and with no kids): resale value. Those who do choose to spawn tend to like nice school districts, and at least around here, a neighborhood with good schools adds hundreds of thousands to the value of a home over those neighborhoods without good schools.

Message 24 of 65
Established Contributor

Re: Why aren't people more financially responsible?

Yup exactly. In the SF bay area it's gotten to the point people would rather commute 30 miles to work and send their kids to a good school, than live much closer to work but in a terrible school district.

And not surprisingly, the houses in the good school district command a ridiculous premium, even if they're literally in the middle of a valley. Ridiculous.

8/4/18:

Message 25 of 65
New Contributor

Re: Why aren't people more financially responsible?

Interesting discussion. Very thought provoking. I wonder if financial habits in the home influence a youngster? Does DNA play a role? I grew up in a home where savings was a religion, debt was the devil and cash was king. I had all necessities and a few wants. There were no excesses even thought adequate funds were available. I learned early about the relationship between productivity and having some things I wanted. Parents paid for college. No student debt. I worked and paid for books, lab fees, transportation etc. The little stuff. 

 

I never had a written budget to this day. There seems to be some internal mechanism that regulates spending for me. It's difficult to explain. I have also been very fortunate. No significant health issues, job loss or other hardships that many suffer. Sometimes it may be just dumb luck. 

 

Retirement plans were not stressed when I was younger. Many jobs had define benefit plans. Mine did not.

 

I was in my local bank one day and saw a tiny sign about IRA. The max then was $1500/yr or 10% of wages whichever was less. I wanted to open an IRA. The bank manager sat down with me and talked in a fatherly way. He was concerned that I would commit funds that may be needed sooner than age 591/2. He stressed that it would be more than 40 years before I could access funds without a 10% penalty. My response was that if I worked all year and did not end up $1500.00 ahead of the game I may as well quit immediately. He laughed and took the papers from his desk to open the IRA. IRA was not avaiable to people with pension plans at work then. Regs chaged over the years. There was no ROTH.

 

Have I ever "blown" money? Of course. I had accumulated savings from my first real job and wanted a new car. I ordered a luxury vehicle. A the time I signed the deal I didn't have all the funds. I was not certain I would in six weeks. I was able to pick up a few extra shifts and was funded when the car came in. I broke the bank and paid cash for the car. I *loved* that car. Still have the window sticker. 

 

I think that lack of hardship and some ok financial habits helped me a bunch. I was extremey fortunate to marry a person who was comfortable with me handling the funds. Said I was better at it and it reduced stress for my better half. 

 

 Don't leave me alone in a room with fine chocolate. Smiley Happy

 

 

 

 

 

 

Message 26 of 65
Valued Contributor

Re: Why aren't people more financially responsible?


@Save-n-Invest wrote:

Interesting discussion. Very thought provoking. I wonder if financial habits in the home influence a youngster? Does DNA play a role? I grew up in a home where savings was a religion, debt was the devil and cash was king. I had all necessities and a few wants. There were no excesses even thought adequate funds were available. I learned early about the relationship between productivity and having some things I wanted. Parents paid for college. No student debt. I worked and paid for books, lab fees, transportation etc. The little stuff. 

 

I never had a written budget to this day. There seems to be some internal mechanism that regulates spending for me. It's difficult to explain. I have also been very fortunate. No significant health issues, job loss or other hardships that many suffer. Sometimes it may be just dumb luck. 

 

Retirement plans were not stressed when I was younger. Many jobs had define benefit plans. Mine did not.

 

I was in my local bank one day and saw a tiny sign about IRA. The max then was $1500/yr or 10% of wages whichever was less. I wanted to open an IRA. The bank manager sat down with me and talked in a fatherly way. He was concerned that I would commit funds that may be needed sooner than age 591/2. He stressed that it would be more than 40 years before I could access funds without a 10% penalty. My response was that if I worked all year and did not end up $1500.00 ahead of the game I may as well quit immediately. He laughed and took the papers from his desk to open the IRA. IRA was not avaiable to people with pension plans at work then. Regs chaged over the years. There was no ROTH.

 

Have I ever "blown" money? Of course. I had accumulated savings from my first real job and wanted a new car. I ordered a luxury vehicle. A the time I signed the deal I didn't have all the funds. I was not certain I would in six weeks. I was able to pick up a few extra shifts and was funded when the car came in. I broke the bank and paid cash for the car. I *loved* that car. Still have the window sticker. 

 

I think that lack of hardship and some ok financial habits helped me a bunch. I was extremey fortunate to marry a person who was comfortable with me handling the funds. Said I was better at it and it reduced stress for my better half. 

 

 Don't leave me alone in a room with fine chocolate. Smiley Happy

 


I doubt DNA plays a role. The rest of my family by and large aren't great savers and often live paycheck to paycheck, so I didn't inherit it via genes.

 

I suspect it's more of a matter of self-control with a good measure of personal preference tossed in.

 

In the end, I think most people are filling a void or scratching a metaphorical itch with their spending or saving habits. That void may be the need to compete and one-up their peers materially, or that itch might be to see just how big of numbers they can have in their accounts. Perhaps what really separates the savers from the spenders isn't upbringing or genetics or any of that - it's just that some people want to save because it makes them happy and helps them sleep at night, while others don't feel good with money in the bank because it's not the same as TVs on their wall or cars in their garage.

Message 27 of 65
Established Contributor

Re: Why aren't people more financially responsible?


@iced wrote:

@Save-n-Invest wrote:

Interesting discussion. Very thought provoking. I wonder if financial habits in the home influence a youngster? Does DNA play a role? I grew up in a home where savings was a religion, debt was the devil and cash was king. I had all necessities and a few wants. There were no excesses even thought adequate funds were available. I learned early about the relationship between productivity and having some things I wanted. Parents paid for college. No student debt. I worked and paid for books, lab fees, transportation etc. The little stuff. 

 

I never had a written budget to this day. There seems to be some internal mechanism that regulates spending for me. It's difficult to explain. I have also been very fortunate. No significant health issues, job loss or other hardships that many suffer. Sometimes it may be just dumb luck. 

 

Retirement plans were not stressed when I was younger. Many jobs had define benefit plans. Mine did not.

 

I was in my local bank one day and saw a tiny sign about IRA. The max then was $1500/yr or 10% of wages whichever was less. I wanted to open an IRA. The bank manager sat down with me and talked in a fatherly way. He was concerned that I would commit funds that may be needed sooner than age 591/2. He stressed that it would be more than 40 years before I could access funds without a 10% penalty. My response was that if I worked all year and did not end up $1500.00 ahead of the game I may as well quit immediately. He laughed and took the papers from his desk to open the IRA. IRA was not avaiable to people with pension plans at work then. Regs chaged over the years. There was no ROTH.

 

Have I ever "blown" money? Of course. I had accumulated savings from my first real job and wanted a new car. I ordered a luxury vehicle. A the time I signed the deal I didn't have all the funds. I was not certain I would in six weeks. I was able to pick up a few extra shifts and was funded when the car came in. I broke the bank and paid cash for the car. I *loved* that car. Still have the window sticker. 

 

I think that lack of hardship and some ok financial habits helped me a bunch. I was extremey fortunate to marry a person who was comfortable with me handling the funds. Said I was better at it and it reduced stress for my better half. 

 

 Don't leave me alone in a room with fine chocolate. Smiley Happy

 


I doubt DNA plays a role. The rest of my family by and large aren't great savers and often live paycheck to paycheck, so I didn't inherit it via genes.

 

I suspect it's more of a matter of self-control with a good measure of personal preference tossed in.

 

In the end, I think most people are filling a void or scratching a metaphorical itch with their spending or saving habits. That void may be the need to compete and one-up their peers materially, or that itch might be to see just how big of numbers they can have in their accounts. Perhaps what really separates the savers from the spenders isn't upbringing or genetics or any of that - it's just that some people want to save because it makes them happy and helps them sleep at night, while others don't feel good with money in the bank because it's not the same as TVs on their wall or cars in their garage.


I think DNA could in some cases play a role. They found a gene that is responsible for some alcoholism. Why not a gene for financial habits?

Message 28 of 65
Valued Contributor

Re: Why aren't people more financially responsible?


@Kree wrote:

I think DNA could in some cases play a role. They found a gene that is responsible for some alcoholism. Why not a gene for financial habits?


Alcoholism has some chemical interactions where genetics can predispose someone to an increased chance of addiction, but I'm not aware of such a correlation with financial spending. I'm of the opinion that the decisions people make is completely within their ability to control, and even attempting to link it to some external factor beyond their control is only going to enable those who choose to make poor decisions to try to justify and excuse their poor decisions (and we're back to reason vs. excuse on that one).

 

I have read that there's some possible links between genetics and compulsive gambling (which this behavior most resembles), but how does one separate what's learned from one's parents versus what's inherited from them genetically? Even in these studies, they'll admit they can't tell how genetics plays a role, or what it's doing to facilitiate compulsive gambling, and most will also add that genetics alone doesn't cause the addiciton; environmental/learned behaviors must also be present.

 

I firmly stand in the camp where people must own and take responsibility for their financial decisions. There's no excuse or justification for being financially irresponsible other than their own choices. They need to own and accept that they screwed up, not be allowed to think their mistakes might not be their fault. Nobody can honestly tell me they opened credit lines and bought stuff, knowing they didn't have the money to pay it off, went into debt anyway, and then tell me they had no control over their actions and that it just happened. 

Message 29 of 65
Highlighted
Regular Contributor

Re: Why aren't people more financially responsible?

From observation of family, friends, and coworkers, I think if people would “think” more and “feel” less, the better off they would be.

 

Put math before emotion. That includes family too. You don’t have to be a participant or enabler in their chronic bad decision making. It’s okay to be the bad guy for the greater good.

 

The only help I offer is what I’ve done to get where I’m at.

Message 30 of 65