DjTj Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by SkinsNut73 I met someone the other day at my son's first tee-ball practice...they had $60K in credit card debt :yikes: :thud: I'm not sure what shocked me more...the fact that he had that much in credit card debt, or that he broadcast that info to someone he met for the first time that day??? I don't know how you get up each day and go about life with that much debt? I would feel so overwhelmed. Hell, everytime I read the "average American has $8K in credit card debt" I think that's way too much...but $60K... Does anyone know what the median credit card debt is? It's pretty easy for the average to be $8k. When there's one person with $60k, seven other people can have no credit card debt, and it still averages out to $8k. I bet there's people running around with much bigger totals that are really skewing the average. I'd be interested in what the median debt is - probably very low. Link to comment Share on other sites More sharing options...
jenmdixon Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by Sarge Look at what our grandparents did. If they wanted something, they saved until they had enough money to buy it. Today's society has been trained by big business to get what they want now. But in the end, it's no one's fault but the consumer. No one is making you go get all the goodies and toys This is the mantra that my husband and I follow. I don't think I have used a credit card in over 4 years now (since we paid off the final balances due for wedding crap). And I do not miss it one bit. We budget and save for things we want/need. We have a "sinking fund" for emergencies. ANd if we do not have the money, or if both of us do not agree on it, we don't buy it. It's that simple. My mother-in-law passed away last year, and my husband inherited all of her goods/belongings/contents of her house - it was a TON of stuff. Let me tell you, this has cured me forever of buying stuff just because it's cool/I like it/etc. without it having a true purpose or a need associated with it. We accumulate so much crap in this society. Why? Just so that it validates some sick sense of "I'm ok because I have this"? Link to comment Share on other sites More sharing options...
jbooma Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by DjTj I'd be interested in what the median debt is - probably very low. What would you consider low?? Even if the median is $5K that is still a lot of money to be paying interest on, when you don't have too. I would also be curious to find out what the median is though. Link to comment Share on other sites More sharing options...
jbooma Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by jenmdixon We have a "sinking fund" for emergencies. I would be curious how many people have an emergency savings?? This should consist of enough money to pay all your bills and everything else, people should shoot for 3 months worth just in case. Think of if like you lost your job or your wife did, could you afford to pay all your bills? By the way one good thing about the interest rate rising is now you will make money off of your savings. If anyone of you are looking for a good savings account, check out ingdirect.com they offer an online savings with now a 3% rate, the account is nice because you can set it up with any checking, and it takes a day or two to trasfer funds. Yes the interest rates might go up, but if you have money in the back, now that will rise as well. The key is keeping the money in the area where it can make the most, real esate is still king for now, but that could change. Link to comment Share on other sites More sharing options...
jenmdixon Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by jbooma I would be curious how many people have an emergency savings?? This should consist of enough money to pay all your bills and everything else, people should shoot for 3 months worth just in case. Think of if like you lost your job or your wife did, could you afford to pay all your bills? ...and should not include any stocks you hold, since stock prices vary wildly (in theory). Think cash reserves, my friends. Most people I know in NoVA live month-to-month. I just think that's crazy. What happens if you get hit by a bus tomorrow and are incapacitated? Long Term Disabilty does not kick in right away. Sick leave only gets you so far. Yeesh. Scary thought. Link to comment Share on other sites More sharing options...
DjTj Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by jbooma What would you consider low?? Even if the median is $5K that is still a lot of money to be paying interest on, when you don't have too. I would also be curious to find out what the median is though. Okay, I found my answer. I guess I was thinking it would be around $1k. This article says the median is $1,900, which is still a chunk of change, but not too bad... http://moneycentral.msn.com/content/Banking/creditcardsmarts/P74808.asp Link to comment Share on other sites More sharing options...
jbooma Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by jenmdixon ...and should not include any stocks you hold, since stock prices vary wildly (in theory). Think cash reserves, my friends. Most people I know in NoVA live month-to-month. I just think that's crazy. What happens if you get hit by a bus tomorrow and are incapacitated? Long Term Disabilty does not kick in right away. Sick leave only gets you so far. Yeesh. Scary thought. I completely agree, and the only way people are going to learn is if something happens. I actually now am thankful for the tech crash here in Nova because it made me open my eyes. Now I do have to say my wife and I the last couple of months are living month to month, but we are also buying a new home while keeping our other one, the reason why we have been able to do that is we have no debt and have been saving. I have learned instead of ****ing about what is happening around us, you have to take advantages of the situation you are in. Before we do anything else (including the HD i want so bad) we have to build up our savings. Link to comment Share on other sites More sharing options...
jbooma Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by DjTj Okay, I found my answer. I guess I was thinking it would be around $1k. This article says the median is $1,900, which is still a chunk of change, but not too bad... http://moneycentral.msn.com/content/Banking/creditcardsmarts/P74808.asp This is scary: More than a third -- 36% -- of those who owe more than $10,000 on their cards have household incomes under $50,000, according to the VIP Forum analysis. 13% who owe that much have household incomes under $30,000. The percentage of disposable income used to pay debts is still near record highs. The median value of total outstanding debt owed by households rose 9.6% between 1998 and 2001. Bankruptcies set another record in 2003, with 1.6 million personal filings, the American Bankruptcy Institute reports. Link to comment Share on other sites More sharing options...
SkinsNut73 Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by jbooma :laugh: :laugh: I guess they haven't gotten a credit score anytime soon, the more accounts you open in a short period of time might hurt you more then you think. You and I might be concerned about our credit scores jbooma. But people like the guy I met at my son's practice ($60K in debt) or the lady I work with (new card every 6 months) don't care. Banks are still going to give them credit cards, loans, etc. Yea, at significantly higher interest rates than you or I...but they are still getting their hands on money. A couple of years ago my brother-in-law filed for bankruptcy...got to be too much after he was laid off and out of work for a year...so at the advice of his attorney he filed for bankruptcy. SIX MONTHS after that he pulls into my driveway in a brand new sportscar. His monthly payment is $480...but he got the loan and that's all that mattered to him:doh: I worry about the children and what types of habits they are learning from mom and dad. My dad constantly drilled credit rating into my head. I got so sick of listening to it, but looking back I'm glad he preached that message. But I'm afraid the message today is, if you can't pay for it in cash, charge it....and if eventually it comes to a point where it's too much...file for bankruptcy and get a "fresh start".:doh: Link to comment Share on other sites More sharing options...
jenmdixon Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by jbooma Now I do have to say my wife and I the last couple of months are living month to month, but we are also buying a new home while keeping our other one, the reason why we have been able to do that is we have no debt and have been saving. It's a temporary situation, right? That's completely different from living off credit month-to-month. Sounds like a good investment to me, by the way. Hubby and I did something similar, and it has paid dividends for us. Link to comment Share on other sites More sharing options...
SkinsNut73 Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by jenmdixon ...and should not include any stocks you hold, since stock prices vary wildly (in theory). Think cash reserves, my friends. Most people I know in NoVA live month-to-month. I just think that's crazy. What happens if you get hit by a bus tomorrow and are incapacitated? Long Term Disabilty does not kick in right away. Sick leave only gets you so far. Yeesh. Scary thought. So true... Honestly, in thinking about the people I know and talk to at work/in the neighborhood/etc, I would say 90% of them are two weeks away from disaster. They live paycheck-to-paycheck and just a small 'disaster' will crush them. Link to comment Share on other sites More sharing options...
jenmdixon Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by SkinsNut73 I worry about the children and what types of habits they are learning from mom and dad. My dad constantly drilled credit rating into my head. I got so sick of listening to it, but looking back I'm glad he preached that message. But I'm afraid the message today is, if you can't pay for it in cash, charge it....and if eventually it comes to a point where it's too much...file for bankruptcy and get a "fresh start".:doh: How many children/teens are taught true money management skills (checkbooks, what credit cards are and how they compute interest, simple interest vs. compund interest, reading the stock pages, etc.)? I mean, not just once in 7th grade - I mean taught it as an important life skill? How many adults have ever taken a class on money management or accounting or personal business management in college or as a personal enrichment class? One that was not required of them for their major? I am a huge proponent to make it required for all college students to take such classes - keep telling them, showing them, making them use those ideas in controlled class situations to have them understand what it REALLY means to use credit and how to manage their own financial future. Catch them before they make huge mistakes. They don't need to be geniuses or money wizards - they just need to have some fundementals. And I do not think that many people truly have a good grasp on it, unfortunately. Link to comment Share on other sites More sharing options...
du7st Posted April 12, 2005 Share Posted April 12, 2005 As a kid, there was a short time when my family had financial problems. I didn't realize it until recently but that has had a big impact on the way I look at credit cards, debt, etc. I can't imagine going out and buying something frivilous and financing it by a high interest loan. In my mind all I see is interest = throwing money away. Why should I give credit card companies money I worked hard to earn? It doesn't make sense. BTW, with the inflation and interest rate hikes and possible housing bubble burst...what will this do to rental prices? I will be renting an apartment pretty soon and I'm trying to figure out if I should go short term lease, long term lease, etc. or just find some sort of way to play it to my advantage. Any thoughts? Link to comment Share on other sites More sharing options...
Kilmer17 Posted April 12, 2005 Share Posted April 12, 2005 Dont rent. Buy a house and find roommates to help cover the mortgage. Link to comment Share on other sites More sharing options...
du7st Posted April 12, 2005 Share Posted April 12, 2005 Kilmer, So I should put my name on the lease and have them pay me like they are paying rent? Is this the idea? Link to comment Share on other sites More sharing options...
SkinsNut73 Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by jenmdixon How many children/teens are taught true money management skills (checkbooks, what credit cards are and how they compute interest, simple interest vs. compund interest, reading the stock pages, etc.)? I mean, not just once in 7th grade - I mean taught it as an important life skill? Again jen...another great point. My kids (10 yrs, 8 yrs and 6 yrs) get pissed at me now because I tell them how much of their allowance/birthday money/etc they can spend and how much should be saved. Someday they will thank me, but not now. As a 17 yr old kid I got my first credit card...from Sears. That first month I went out and bought $100 worth of tools. The bill came and said my minimum payment was $10. "Holy crap" I thought...only $10???. So the next month I went out and spent $200-$300 more...and now my minimum payment was only $30. I thought "this is great"!!! It wasn't until a month or two after that when it clicked that I wasn't even making a dent in my overall balance:laugh: . Fortunately it wasn't that much money in the long run and I was able to recover quickly.:doh: Link to comment Share on other sites More sharing options...
jenmdixon Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by du7st Kilmer, So I should put my name on the lease and have them pay me like they are paying rent? Is this the idea? He didn't say lease it, he said for you to BUY it. Then, make out lease agreements with your tenants (who will be living with you - your roommates). Link to comment Share on other sites More sharing options...
du7st Posted April 12, 2005 Share Posted April 12, 2005 Sorry I ment buy - I used the wrong terminology. Link to comment Share on other sites More sharing options...
Kilmer17 Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by du7st Kilmer, So I should put my name on the lease and have them pay me like they are paying rent? Is this the idea? Yes. You buy the house, then have seperate lease agreements with your roommates. Link to comment Share on other sites More sharing options...
DjTj Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by du7st Kilmer, So I should put my name on the lease and have them pay me like they are paying rent? Is this the idea? If at all possible, try to scrape together a down payment and buy the property you're living in. Look for "For Sale" signs, not "For Rent". I know it can be really hard to pull off (I'm renting right now while I'm in school) but if it can be done, it can save a lot of money in the long run. Link to comment Share on other sites More sharing options...
Kilmer17 Posted April 12, 2005 Share Posted April 12, 2005 Ask Blitz this ?, But Im sure you can find a MTG with very little down. Some even go 105% these days. But obviously the more down you can swing the better. Link to comment Share on other sites More sharing options...
du7st Posted April 12, 2005 Share Posted April 12, 2005 Will the roomates not be put off by paying me rent knowing that I am ending up with the ownership? Maybe I just need to find dumb roomates? Link to comment Share on other sites More sharing options...
Kilmer17 Posted April 12, 2005 Share Posted April 12, 2005 Some might be, but why care about that? Find other roommates who dont care about it. Link to comment Share on other sites More sharing options...
jenmdixon Posted April 12, 2005 Share Posted April 12, 2005 Originally posted by DjTj If at all possible, try to scrape together a down payment and buy the property you're living in. Look for "For Sale" signs, not "For Rent". I know it can be really hard to pull off (I'm renting right now while I'm in school) but if it can be done, it can save a lot of money in the long run. Indeed. Not only would you have a great investment for future years (think equity), and tax advantages (you can deduct real estate taxes and mortgage interest, and if you make the rental legal, repairs and maintenance and other similar costs as well, off your tax return each year), it also would mean that you will have an easier time later of graduating up to a larger house if you so wanted. Once you go through your first mortgage rigamarole, it gets easier. Not to mention that you're ahead of the game if you buy when you are younger. Link to comment Share on other sites More sharing options...
du7st Posted April 12, 2005 Share Posted April 12, 2005 I think my biggest concern is that this is the peak of housing prices. If I buy say at 300g, it drops to 200g and I put 50g into it, wouldn't I be at a net loss? As an alternative, what if I rent for a year or two and wait for prices to go down? Link to comment Share on other sites More sharing options...
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