Revolving debt, home equity I must have it now syndrome

[dumpster56]

http://www.nytimes.com/2007/05/19/us/19debt.html?hp

Debt I am amazed that people can live like this.

 

[bssc]

Interesting quotes:

Ms. Moellering’s basket recently included more unwelcome news: $2,693 due on a Visa card through her credit union, including finance charges of $25, and $13,680 on a CashBuilder Elite Visa, including a monthly finance charge of $200.

How could this be news? Did the debt elves run up the bills while they were out?

It doesn’t matter what you do, you always have that credit card debt.”

I bet no one here pays any finance charges, much less late fees.

“In such a short period of time, there’s no way to do it other than credit card debt,” Mr. Moellering said.

We did our wedding for 100 people on about $5K. And we did most of our bathroom remodelling work ourselves. And we saved up the money before we started.

we don’t want to spend time going through the bills.

I think that they are either in denial about the whole situation or see themselves as victims. Unfortunately, I think that they are pretty typical.

 

[crazy connie]

Let me think.... Oh yea I remember now... $25 for the preacher, a cake from a bakery, a corsage for my mom, a single boutineer for hubby and a nosegay boquet for me... My mom got some meat out of the freezer and cooked some salads to go with and the groom bought a couple of bottles of booze... VOILA a wedding reception for 50 people! No honeymoon and we saved up 20% downpayment on 1st home within 6 months.

We got pets we could afford and never got a bill for more than routine care.

Hmmm let's see... I also remember working 2 jobs and a hell of a lot of 60 hour work weeks. My kids needed a roof over their heads and food in the tummy more than an $800 dollar TV or every evening playtime and weekend playtime with me after their dad died.

One of these "PARENTS" could get a 2nd job or they could step down in housing and get a real grip on the bills. In Ypsilanti MI it is not gonna be a great job market for a long long time... Too many auto workers hitting the bricks! Oh well, they can always do BK right?

Yea bssc, I know it's always those damn "debt elves"!!!!

 

[chinaco]

This is a case of Natural Selection in the world of personal finance and FI. It is mother natures way of improving the quality of the herd!

... They didn't look both ways before walking across the borrowing street and got hit by the debt Bus! Ouch!

Or you could look at it as the predator and the prey. (you know big eats little)... In this case smart eats dumb!

 

[LOL!]

The Moellerings are gonna get a lot of flack for this story. They just don't seem very bright.

John Leland and The NYTimes should be ashamed of themselves for publishing this because I think it helps legitimize financial stupidity and the "not my fault" attitude. Maybe Mr. Leland has similar debt problems and he is trying to show he is normal?

 

[Moemg]

I have seen so many of my former co-workers live like this .Continually taking home equity loans so some of them now owe more than there houses would sell for .I want to just shake them and say wake up to financial reality!

 

[FinanceDude]

This is a case of Natural Selection in the world of personal finance and FI. It is mother natures way of improving the quality of the herd!

... They didn't look both ways before walking across the borrowingstreet and got hit by the debt Bus! Ouch!

Or you could look at it as the predator and the prey. (you know big eats little)... In this case smart eats dumb!

Their story is repeated tons of times across America everyday

 

[crazy connie]

John Leland and The NYTimes should be ashamed of themselves for publishing this because I think it helps legitimize financial stupidity and the "not my fault" attitude. Maybe Mr. Leland has similar debt problems and he is trying to show he is normal?

This one got to me for some reason, perhaps because I pity foolish folks. I popped off the following to the OP/ED at NYT last night.

"This couple has done more wrong than right and so have the experts you chose to quote. It would serve the country and individuals better to have the stories which highlight the successes of average earners who manage expenses properly. People who live and spend in fairytale fashion wind up in bankruptcy which just costs everyone else in the foodchain more. If people saved money before buying there would not be such a vast foreclosure or consumer debt rate. They justify it with the "everyone else is in the same boat" aka "keeping up with the Jonses". Everyone is not entitled to every consumable available. It is all about choices. Choices can range from excellent to horrible. I have yet to meet a good choice with 30% intrest. I can and do live without. Maybe that is why I have money in the bank and retired early!"

It's not that we are so brilliant and do not have a modicum of luck on our side, rather that the media choses to perpetuate the poor me syndrome. When people (like children) see and read about the positve steps taken over time perhaps this countries average workers can start to realize they too can make better choices daily! LYBM is NOT instant gratification.

OK... I will step down off my soapbox with the thought that behavior modification can work!!! :

 

[runchman]

I (and I bet a lot of others here) have 2 kids and guess what ... I can find time to look at my bills! Amazing, isn't it

I'm also guessing many of us with our (relatively) large net worths would *never* spend $800 on a present for our spouse.

These folks need to watch that Steve Martin video "Don't buy stuff".

And 30-some k for software design? He must not be much of a programmer, that is a crazy low salary for someone that can code.

The price of being dopes, I guess

- John

 

[cute fuzzy bunny]

My whole side of the family is pretty good with money. My wifes side of the family spends until the credit card company stops letting them charge, then they get more cards. No insurance, no savings, no retirement plan.

Its interesting to see the difference. They're not stupid people, just living right in the immediate moment.

The funny part is, right when one of the wheels comes off, something or somebody always seems to step in and solve the problem. Look at the subprime mortgage situation with the government about to step in and make it all better for those who made mistakes...

 

[crazy connie]

The funny part is, right when one of the wheels comes off, something or somebody always seems to step in and solve the problem. Look at the subprime mortgage situation with the government about to step in and make it all better for those who made mistakes...

Yup and we get to collectively bail the moronic individuals out. I do not have a problem supporting the truly defective, ill, infirm or aged. I resent paying for greedy, dumb and or lazy though.

 

[Jarhead*]

I do not have a problem supporting the truly defective, ill, infirm or aged.

Bless you Crazy Connie. 8)

 

[bssc]

I am sure that they thought that they were showing self control by not buying a home theater system with the TV. My friend did it and had it professional installed. I didn't see that much difference.

But not only is their spending out of control but their refusal to pay attention to things like balances and due dates is probably costing them just as much in late fees and higher interest rates (the 30+% rates are default rates).

On the other hand, people like that pay for my CostCo tiered cashback program.

 

[bssc]

Yup and we get to collectively bail the moronic individuals out. I do not have a problem supporting the truly defective, ill, infirm or aged.

I don't know about the aged, unless it is medical, they should know better. I agree with the rest.

 

[bright eyed]

growin up is hard to do huh? i know people who don't seem quite grown, despite their age, children and other responsibilities!

I always wonder why people in this type of situation let others in to see the craziness? unless, of course, it's oprah and she's towing along someone who will give you an extreme financial makeover or something - but this was just a spotlight with nothing but public humiliation in tow!

I also think it is interesting - the denial - but also just the overall spiralling out of control-ness of the story. they eat out when they have a bad day - i don't think they feel in control of their lives - and look up and wonder why they are depressed.

 

[crazy connie]

I don't know about the aged, unless it is medical, they should know better. I agree with the rest.

My best friend in the whole world just celebrated her 88th birthday. Three families work together to keep her independant. After working in retailing on her feet in small town middle America for more than 20 years, she and her husband retired from farming in their mid-60's. She worked at home childcare for another 15 years and took in sewing. On her SS of $686 a month, she is still saving for her old age and has almost 200K in CD's! Only pension they had went away when her husband died 15 years ago. If she gets much weaker she will move in with us. What family she has, have the bright idea she should move in with a 68 year old daughter and her husband in Florida. If they ever listened to her they would know that she will stay here and be buried by her husband when her days are done.

 

[Sam]

http://www.nytimes.com/2007/05/19/us/19debt.html?hp

"Wisdom usually comes with age. But sometimes, age arrives by itself."

 

[lazygood4nothinbum]

Its interesting to see the difference. They're not stupid people, just living right in the immediate moment.

in an earlier discussion--i think on so-called predatory mortgage practices (with apologies to the author as i can not remember which poster contributed this)--someone noted that many people fall into financial traps because the average intelligence level is, well, not quite even average. and so there is something to say about bad lenders, advertisers, etc.

i have a cousin who might not understand rocket science but certainly she is of intelligence enough above average that she should know one day all those purchases will require payment.

she doesn't just live in the here and now. she lives in a world where big-u universe will provide into the future as well. perhaps it isn't just intelligence but maybe it is beliefs that encourage us to make savings entries or that allow us to enter into debt.

 

[bssc]

My best friend in the whole world just celebrated her 88th birthday. Three families work together to keep her independant. After working in retailing on her feet in small town middle America for more than 20 years, she and her husband retired from farming in their mid-60's. She worked at home childcare for another 15 years and took in sewing. On her SS of $686 a month, she is still saving for her old age and has almost 200K in CD's! Only pension they had went away when her husband died 15 years ago. If she gets much weaker she will move in with us. What family she has, have the bright idea she should move in with a 68 year old daughter and her husband in Florida. If they ever listened to her they would know that she will stay here and be buried by her husband when her days are done.

She should be a good example for the people who try to retire but come back because they were spending more than they could afford (see the couple in the "Can this Retirement be saved?" thread.)

 

[cute fuzzy bunny]

Bless you Crazy Connie. 8)

She had you on all counts, didnt she?

 

[dumpster56]

Funny the picture of the family sitting at the kitchen table looks alot like a Far Side cartoon!!!

Lets think of a smart line here!

 

[Nords]

This is a case of Natural Selection in the world of personal finance and FI. It is mother natures way of improving the quality of the herd!
... They didn't look both ways before walking across the borrowing street and got hit by the debt Bus! Ouch!
Or you could look at it as the predator and the prey. (you know big eats little)... In this case smart eats dumb!

The Moellerings are gonna get a lot of flack for this story. They just don't seem very bright.

Yup and we get to collectively bail the moronic individuals out.

Their story is repeated tons of times across America everyday

Hey hey hey, a little respect here!

These are the people who are helping to drive the consistent & insanely great returns seen by the financial sector for the last few years. Why, they're probably supporting 0.003% of my ER portfolio all by themselves.

And these are the people who will be working the rest of their lives to bail out Social Security & Medicare with their payroll taxes...

 

[chinaco]

Hey hey hey, a little respect here!

These are the people who are helping to drive the consistent & insanely great returns seen by the financial sector for the last few years. Why, they're probably supporting 0.003% of my ER portfolio all by themselves.

And these are the people who will be working the rest of their lives to bail out Social Security & Medicare with their payroll taxes...

Point taken!

 

[deserat]

Until our congress critters see how 'horrible' this is and 'how good we savers have it' and justify taking from us 'just to help them and even out the playing field.' This kind of story scares the crap out of me.

Deserat

 

[dex]

There is a radio personality - Jeff Beck I think - that takes calls from people just like the ones in the story. It is amazing.