Why aren't people more financially responsible?

[Anonymous]

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@Kree wrote:

Wound up going into more debt to avoid being homeless.

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I wound up becomming homeless to avoid going into debt. It worked!

[Caardvark]

I don't know the answer "why" but have you ever read the Auto Approvals section? I find it sad because there are a lot of poor financial decisions in there. 

[Anonymous]

I would rather say that financial literacy is not so accesible (Or well, people directly do not care about it enough) but yeah. I remember once uncle that for not trusting banks because they would take his precious money away... And he would take 800 fees to have the money of his paycheck, or my cousins that all of them had filled bankrupcy, I am the odd one in the family with 8 credit cards, never paid interest and almost no debt

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@800who wrote:

I never knew it growing up because my parents were good at hiding it, but they weren't the most responsible financially. In high school I took a class about personal finance and it was very basic, but somehow it got me into being financially responsible and credit etc. Now credit is almost a hobby for me. I am 19 now with a top tier credit score and I got my first credit card a month after I turned 18 and I rememeber talking to my dad about it as I was coming up on my 18th birthday and he was almost angry/dissapointed when I mentioned that I wanted to get a credit card and I was confused, today I understand why because my parents had terrible financial habits and my siblings who are significantly older than me made bad financial decisions when they first turned 18 and my dad had to suffer through it and fix it. I knew personally that I was more than capable of having a credit card. I've been working at a credit union for about a year now, and it's so weird seeing all these people that just barely scraping by... which is more expected however, I see way too many people treat credit cards as "extra" money and the crazy high balances people have and then watching them make that minimum payment every month has me so confused. The highest credit card balance I've seen personally is like $45k with a 800 or so minimum payment and I guess what I'm getting at is why is this so common. Thoughts and opinions on this?

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[Revelate]

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@Caardvark wrote:

I don't know the answer "why" but have you ever read the Auto Approvals section? I find it sad because there are a lot of poor financial decisions in there. 

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Well, objectively I'm one of them given that I could've gotten probably another 10 years out of my 2008 TSX that I dumped on Carvana a few months back.

On the flipside it is probably the last car I will ever own, and I wanted it, and I could afford it without materially increasing the number of years for me to leave my current career, so F it.

I honestly think we're going to be optimizing car purchases out of society except as luxury purchases probably within the next two decades anyway so that avenue of consumer bleeding will mostly come to a halt.

[Caardvark]

I wasn 't trying to sound like a Dave Ramsey and imply that auto loans are bad. Quite the contrary! 

My comment was regarding the approvals by posters I'd be willing to bet will be on the Rebuilding forums in another year or two because "math." I see a lot of loans that are clearly not supported by the poster's income unless they are living rent free and have no need to save for retirement.

I had to stop reading to avoid pulling my hair out. 

[fezwhy]

Some will disagree with me, but I think it starts at home or at the very least some type of personal finance class in high school.

My parents are complete opposites when it comes to money.  My dad pays things on time every month with no debt at the end of the month.  My mom charges up her cards and pays the minimum due.  She has over 15 credit cards!  That eventually ruined their marriage.  She continues to spend freely and has no intention of paying any of it off.

Almost every person I have dated has had no personal finance common sense.  But I have helped every single one of them get debts removed, negotiate the prices down with the creditors and get back on track with a savings plan.  Except one who I would get back on track and the next month do the same thing again!  Lots of unpaid bills.  So frustrating!  We broke up over this as I knew I couldn't be with someone this irresponsible that didn't care to make her life better for her and her daughter.  After I left she moved back in with her dad and that's the last I have seen or talked to her.

Honestly most of the people in this mess have no actual clue what to do or how to even get started to fix their credit. Nor do they realize it impedes their ability to get a car or house loan.  I help every single person that needs it because I at one point was in rough shape.  But I sought out help and fixed it.

[jetsfan2013]

My best friend and I were talking while watching college basketball Friday about this. To add some color, his job is commission based/variable income (he is in software sales) and he purchased a $40k pre owned Infiniti last July, financing it with payments approaching $700/mo. Fast forward to Friday, and he is telling me how much of a mistake it was to buy the car, and how in 9 months it has already dropped nearly $10K in value. He is now $5K upside down and is considering cutting losses now vs. taking more of a hit.

Buyers remorse or the harsh reality that just because the bank says you are approved, doesn't mean you can really afford it.

[arkane]

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@jetsfan2013 wrote:

My best friend and I were talking while watching college basketball Friday about this. To add some color, his job is commission based/variable income (he is in software sales) and he purchased a $40k pre owned Infiniti last July, financing it with payments approaching $700/mo. Fast forward to Friday, and he is telling me how much of a mistake it was to buy the car, and how in 9 months it has already dropped nearly $10K in value. He is now $5K upside down and is considering cutting losses now vs. taking more of a hit.

Buyers remorse or the harsh reality that just because the bank says you are approved, doesn't mean you can really afford it.

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Yep and this is why I paid cash for my car (an extraordinarily average Toyota econobox) since 0% financing wasn't an option. Taking out a loan on a depreciating asset just boggles my mind to be honest.

[Lucifer]

The thread name got my attention.

Then I read the age of the OP.

And then I though of the movie Good Will Hunting and remembered Robin Williams' line.

Something to the effect - you're a kid and you don't know anything.

So.....this isn't said in a derogatory way.   You should be commended for your approach.    You had good examples at home.  

But, life happens.   Have you had a sick child?  An imparied spouse?    Have you just had kids and been trying to feed and clothe them?  Have you lost a job unexpectedly because of a merger or some other reason?

The thread topic casts shade on anyone who has stumbled.    Life happens and it's not easy at times.    Of cource hindsight is 20/20 and maybe looking back or maybe playing armchair quaterback one could tell someone else just how to have avoided financial disasters but while one is being omnipotent in this regard, please tell me how to avoid all or any disasters that may come my way now. I'd appreicate the heads up.   Also, the winning lottery numbers would put you forever in my gratitude.

I am aware that some got into trouble on purpose almost without regard for others and the impact their poor choices make on others.  I find that group to be the minority.

Life happens.   I admire the ones who planned well.    I feel for those struggling.   I try where I can to offer information and hope to those learning.  I stand proud with those who fell, dusted themselves off and stood back up.

[iced]

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@Lucifer wrote:

The thread topic casts shade on anyone who has stumbled.    Life happens and it's not easy at times.    Of cource hindsight is 20/20 and maybe looking back or maybe playing armchair quaterback one could tell someone else just how to have avoided financial disasters but while one is being omnipotent in this regard, please tell me how to avoid all or any disasters that may come my way now. I'd appreicate the heads up.   Also, the winning lottery numbers would put you forever in my gratitude.

I am aware that some got into trouble on purpose almost without regard for others and the impact their poor choices make on others.  I find that group to be the minority.

Life happens.   I admire the ones who planned well.    I feel for those struggling.   I try where I can to offer information and hope to those learning.  I stand proud with those who fell, dusted themselves off and stood back up.

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Life may happen, but the difference between responsible and irresponsible is owning the problem and changing behavior to prevent the next event. The irresponsible ones want to be victims of their circumstance, thinking that they did everything right and still got wiped out. The people who truly saved as much as they could and still got wiped out are the minority.

The fact that almost half of this country has $0 in savings is proof of that. How many are paying on or own a car that cost more than 25% of their annual salary? How many people have a mortgage for more than 2-3x their annual salary? How many people with no savings bought a new smartphone or TV in the last 2-3 years because they wanted 4K or the latest featuremajig? Those are all irresponsible behaviors, but if I tell someone making $60,000/year they're irresponsible to buy luxuries they think they're entitled to it just ends up being a ticket to triggertown, complete with lines like YOLO and you can't take it with you.

The Dunning-Kruger effect is quite alive and well in the realm of finance, too.