Comments on: Why Do People Spend More Than They Earn?

By: admin

admin — Wed, 05 May 2010 21:24:15 +0000

Hi Jim – You are spot on. Welcome back to reality me, Americans, and the rest of the world! This downturn will make all survivors better in the long run. Thnx for sharing your thoughts!

By: Jim777

Jim777 — Wed, 05 May 2010 13:08:51 +0000

Everyone I know looks at saving money as being pessimistic. (Well not since 2008 but before that) If you SAVE, then you must think your going to loose your job. Yes I’m serious. At work you’ll notice that if you go out and buy a Brand New Car everyone will congratulate you and act like you did something wonderful… I just shake my head and think to myself; there goes another fool who went in debt for a new car when they could have bought used and saved a ton of money.

Americans have always been addicted to SPENDING and Showing Off their income. They care more about how they LOOK than their real financial situation. You can be sitting with $107.00 in your bank account but as long as you have that shiny new car sitting out in front of your mortgaged house then your doing A-OK Great in America… Please.

One great thing about the Recession of 2008, it’s starting to bring Americans back to reality. The Buzz of the Roaring 1990′s spending party is finally wearing off and people are realizing they better get real and stop lying to themselves.

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By: admin

admin — Fri, 18 Sep 2009 22:13:41 +0000

@Lee Credit is truly evil! Or perhaps, we are just too weak as humans!

By: admin

admin — Fri, 18 Sep 2009 18:12:08 +0000

Yes, I agree. Distortion is strong with this young one. The other side of the story is, if the father is rich enough, and will always support her, then maybe her her view on finances aren’t distorted!

By: George@Moneylounge.net

George@Moneylounge.net — Fri, 18 Sep 2009 17:55:33 +0000

Getting your first car is definitely a big moment in your life. Handing down an expensive Porsche is setting the bar way too high. I wonder how distorted the girl’s views are on finances, if any, considering her dad is just willing to hand down the Porsche like that. What other extravagant things is she getting?

By: Lee

Lee — Fri, 18 Sep 2009 07:15:05 +0000

Why? Because a) they can, and b) it is easy to do.

By: admin

admin — Fri, 18 Sep 2009 06:05:28 +0000

@forex That's why we suggest the "Going Broke To Win Big" method of always flushing all your money out of your main bank and into your savings bank.

By: forex

forex — Thu, 17 Sep 2009 15:48:48 +0000

That’s the low, when you get cash from your paycheck, you find so quickly the way to spend it all. The circle repeats again and the consumer basket is always empty. That’s all folks.

By: fs

fs — Thu, 17 Sep 2009 01:54:53 +0000

@TonyM @ leavingfinance.com Ford Fiesta, sweet! I had a 1986 Toyota hatchback my senior in HS and i loved it. Half the car was a darker red b/c it was in an accident! FS

By: TonyM @ leavingfinance.com

TonyM @ leavingfinance.com — Wed, 16 Sep 2009 18:19:25 +0000

Interesting reading. I agree with David. When I started driving, my Dad gave me a car. Only it was a very old Ford Fiesta. And I had to share it with my sis. But the truth is I loved that little thing. Even got chased by a random car for some odd reason and managed to get away. Was a crowing achievement. Its all about the driver behind the wheel!!

By: admin

admin — Wed, 16 Sep 2009 15:57:44 +0000

Seriously David, what is she going to buy after the Porsche, a Lamborghini?! One of the greatest feelings I know is being about to save up for something successfully, and then buy it on your own. Things just don’t seem as cherishable if it wasn’t earned.

If I were the girl, I’d try and come up with a compromise. Perhaps something a little less ostentatious so people wouldn’t pick on me, and ask for some of the savings in the form of cash for here to do what she wants. Sure, it’d be tempting to accept the Porsche, since so much about HS is trying to be cool, but I donno. Seems over the top to me.

By: David@DINKS Finance

David@DINKS Finance — Wed, 16 Sep 2009 15:52:24 +0000

“Probability says she will unlikely make over $400,000 a year to afford a second hand Porsche based on the 1/10th rule. However, since she feels entitled, it’s likely she’ll go deep into debt to consume what she feels she deserves. It’s not like she’s going to start suddenly wanting to drive an old Civic!”

You make a good point. I had a friend in high school who drove a Lexus, brand new courtesy of her dad. She was a great girl – super nice and a great friend. But she knew it as well as I did that this car is going to ruin the rest of car-purchasing life. She knew that she would have a hard time buying something that was considerably “worse” than that Lexus.

Now, I think it’s appropriate to buy your child a car if they need it to get to school (I went to high school 17 miles from my house). But we shared our car and it was a hand-me-down not worth more than a couple thousand. That was fine, though, because it made it much easier to think our $5,000 and $8,000 we bought a couple years later was an amazing purchase (we both paid cash for them!). But if my dad had given us some hand-me-down Porsche to drive wow….not sure what I would do after that.

By: William & Mary

William & Mary — Wed, 16 Sep 2009 15:46:05 +0000

Back in 2007, I made more than I ever made in my life. I thought I’d earn at least +/- 25% of what I made in 2007, but all went to hell in 2008, and my earnings declined 50%. Too late for me though, b/c I had already bought this luxurious vacation property in Maui. I got a 10% discount from the peak, price prices fell further by 15%, and my income halved.

So yes, I was delusional in thinking that I could continue making close to my peak level income in 2007 and spent accordingly. I never plan to sell the Hawaiian place, but my timing wasn’t perfect. That said, I’m still young, and expect/hope my peak earning years are still ahead of me!