Will the monthly payment be the death of us?

[samclem]

Own2Feet,
Welcome to the board. Drop us a line over at the "Hi, I am. . . " forum and let us know about you (as much as you'd like to share).

I can tell you've been looking over the information here. You'll find all kinds of people here, some who probably spend a lot more than you do, but there are some folks who probably do just fine while spending less.

Again, welcome.

 

[Bestwifeever]

Wow, Own2Feet--all I would add is that our library carries or can get almost all periodicals--you could cut back a little more by cancelling those subscriptions, you spendthrifts

 

[old woman]

I spend about 367 a month on Cable, Internet, Cell phone, Water, Sewer, Electric, Gas, Garbage and have a mortgage. Twice a year I pay car insurance and property taxes and once a year house insurance. Cutting cable and internet and cell won't save me much. Getting rid of the mortgage would be a big help but other than that saving on taxes is my main thing I can cut.
Now I put away 20.5K for retirement which cuts my income tax to about 2,500 a year. Nothing I can do about property taxes yet. When I retire I will be low income elderly so my property taxes will be cut to about 10%.

 

[Hershey102]

Used cars, excuse me, I mean previously owned cars, are advertised now with 96 month loans. If it takes 8 years to pay off a car or truck, maybe . . . just maybe . . . you can't afford it. Unfortunately, the mindset is to look at the affordability of monthly payments, not the actual cost.

 

[audreyh1]

From my perspective, the "monthly payment" will bring down the economy. Think about it....

cable bill
internet bill
satellite radio
cell phone bill
day care
car lease
credit card interest

Not my problem nor do I think it will "bring it down". So my neighbor has debt? That means he/she has to work as long as he/she is able. That's not necessarily a bad thing. Personally, I kind of think the "monthly payment" has been a boost to the economy for a long time....

People take on these things by choice. Then they get to work forever to pay them off. I made different choices. But I'm happy to invest my money in companies catering to all these consuming folks.

Audrey

 

[FIREd]

From my perspective, the "monthly payment" will bring down the economy. Think about it....

cable bill
internet bill
satellite radio
cell phone bill
day care
car lease
credit card interest

I'm sure I've forgotten quite a few, but consider it. All these things are small monthly expenses that add up to things we'll never own. We talk about the savings of our parents or grandparents and wonder why they were able to do it on such small incomes? They bought things, paid them off, then needed much less income to survive in retirement. What is going to have to happen to save the economy from a surefire broke economy in our senior years? You may think it won't affect you because you've saved, but we can already see the government's involvement with bailing out people. Is Rome about to burn? Even though you've saved, will you be paying for your neighbors retirement?

I am always on the lookout for opportunities to cut fixed expenses (including monthlies). This year I have worked hard to reduce our phone bill, electric bill, and internet/cable bill. I am also hunting for bank and investment fees (ATM fees, bank download fees, broker fees and commissions, custodial fees, tax preparer fees...). So far we have reduced fixed expenses by almost $2000 this year. One of the biggest scams I think was my landline phone bill. Almost $45 a month just for local calling, full of taxes, fees, features we never used. A real sham!

 

[JustCurious]

So, many people apparently just can't distinguish between "wants" and "needs". People in the '30s knew that what they needed was food, clothing and shelter and everything else was "wants".

Walt, I think there are a few more things that qualify as "needs" for those of us who live in modern society... medical care, a quality education, electricity, running water, transportation, and some form of communication.

 

[JustCurious]

One of the biggest scams I think was my landline phone bill. Almost $45 a month just for local calling, full of taxes, fees, features we never used. A real sham!

I agree. I cancelled my landline service about 2 years ago, and I don't miss it.

 

[Bimmerbill]

I think thats how a lot of people get into trouble. Just one little monthly payment, then another, then another. Then something happens, and people don't realize how tight money is and the house of cards falls.

 

[youbet]

Property taxes are a source of major angst for most of the retired people I know. The only way to make it stop is to sell the house -- an unsatisfactory solution at best. After retirement, with a paid off mortgage, property tax will be my single biggest monthly expense. It is currently $729 per month, and I have noticed it never goes down.

Gee Gumby..... An issue where I seem to be on your left!

I believe in progressive taxes and property taxes are no exception. Make a big footprint with your domicile = pay a big tax bill. Keeping significant assets tied up in real estate, IMO, shouldn't shield you from paying your fair share.

Selling the house isn't an unsatisfactory solution, it's a very viable solution. You're retired, the kids are grown and out of the house, the needs for space and fancy amenities are reduced, so sell and make a little smaller footprint than earlier in life. It makes sense to me.

 

[freebird5825]

cable + internet + telephone + security & fire alarm system bill -yes
satellite radio - nope
Netflix - yes
cell phone bill -yes
day care - nope
car lease - nope
credit card interest - nope
housecleaner - yes
garbage -yes
car/house/boat insurance - yes

best thing we did was put all bills we could on autodeduct from a shared bank account and tallied it all up in a spreadsheet.
then we trimmed the cell phone minutes and the lowered the frequency of housecleaner ( i have carpal tunnel, so it's a necesity), plus re-evaluated the car insurance.
we saved!

 

[Gumby]

Gee Gumby..... An issue where I seem to be on your left!

I believe in progressive taxes and property taxes are no exception. Make a big footprint with your domicile = pay a big tax bill. Keeping significant assets tied up in real estate, IMO, shouldn't shield you from paying your fair share.

Selling the house isn't an unsatisfactory solution, it's a very viable solution. You're retired, the kids are grown and out of the house, the needs for space and fancy amenities are reduced, so sell and make a little smaller footprint than earlier in life. It makes sense to me.

You would be surprised at how a rather modest "footprint" can generate a very big tax bill in this area of the country. My $8700 annual tax bill is for 2500 square feet with a 1/3 acre property

Actually, I have never regretted paying my property taxes, even though half of the money goes to the schools and I do not have any children. The way I see it, someone paid for me when I was young. But I am cognizant that it will be my largest single expense in retirement, and it would be a great disappointment to have to sell because we couldn't afford the taxes..

 

[Own2Feet]

To Bestwifeever: Great suggestion, but spouse just loves to get those magazines in the mail. Something about when you retire, the mailbox becomes a magic portal you must visit several times a day to see if the postal fairy has left you anything Plus, I read the magazines while riding the elliptical machine or treadmill--so that counts as recycling
As for being thrifty, I know that dial-up Internet resonates with a bunch of people. I don't mention it at work because folks would stare. Yet we resent the "bundling" scams for Internet, phone and TV. We don't need that long-distance phone service that is bundled in, but can't get a decent high-speed internet connection, all by itself, for less than $70 a month including all the taxes and fees. So I'll keep on with the dial-up until nothing will load anymore. So far, it's still a quick, easy way to spend money, pay bills, and send e-mail, and I don't think I'm missing much by not watching You Tube.

 

[youbet]

I'll keep on with the dial-up until nothing will load anymore..

You might want to check if ATT DSL is available at your house. I discovered the slowest version of ATT DSL at $10/mo was cheaper than the dial-up service I was using. Yet, the slowest ATT DSL screams with speed compared to what the dial-up provided......and I actually save $5/mo!

 

[accountingsucks]

I suspect many of you here also track your monthly expenses and if not notice when one of your bills goes up. I track mine in Excel and this has been a great tool in helping me slowly cut costs(although I was always very frugal before this). I would suggest that each month you pick a monthly bill and try to get it reduced....for example I just got my land line reduced by about $15 a month by threatening to switch to a competitor. In a year I will call them again and try to get it dropped again. One bill I cringe at is net and cable which is $115 a month. We do have one step above basic cable and high speed net but to me it's still high. We are in Canada though and it seems as though cable, net and phone costs are MUCH lower in the US. Thankfully we have had more options recently so this bill is next on my hit list.

AS others have said I have zero interest costs on my CC....except for last month when I forgot to pay it on time which I've never done before. Interest was around 20 bucks on about a $800 balance...ouch

 

[Independent]

I'll be (mildly) contrarian and point out that the "regular monthly expenses" has a mirror image for some people. Many of those who save do it by having automatic payroll deduction for 401K plans. I've heard that employers are promoting 401k more strongly by automatically enrolling people - you need to actively reject the deduction in order to opt out.

And, since interest rates are set by supply/demand, if lots of people borrow and spend and only a few save, the savers (that's us) get better rates.


(Yes, I know about the negatives. 401k's replace pensions which were 100% automatic, the balance in the 401k makes people feel rich so they spend even more, all the borrowers drive the dollar down when they vote the same way they live. But I'm trying to find a silver lining here.)

 

[old woman]

Down grading your housing isn't always wise even if you save on property taxes. My brother is retired and 59 YO now and buying a 5 bedroom house with a 5 car garage and 3 bathrooms. Mom is 82 and moving in with him and his wife and he has business that will be in the garage. He is spending 200K more to get a bigger house and not charging mom rent. She is selling her house to his son and he is selling his house. The housing market seems good in our family. My brother is buying from his daughter and a friend of a neighbor is buying his old house for cash.

 

[BLS53]

I'd eat dog food before going back to dial-up Internet.

I'd choose broadband over indoor plumbing.

 

[W2R]

I'd choose broadband over indoor plumbing.

After Katrina, I didn't have either in my home in New Orleans. After finding that out I went to Alabama and did not return until the indoor plumbing/sewer was working again in my neighborhood. Cable TV/internet was not working but I was still glad to be back.

However, getting my cable internet back was WONDERFUL!! Then I truly felt that I was back home.

So, from that experience I can conclude that in my case, I would choose indoor plumbing over broadband.

 

[Khan]

Quote:
Originally Posted by ziggy29
I'd eat dog food before going back to dial-up Internet.

I'd choose broadband over indoor plumbing.

I'm somewhere between these two.

 

[HFWR]

If your "pipe" was big enough, you could always email some "packets" to some deserving person, say your Congress critter...

 

[John23]

I don't know if the monthly payments will kill us, but I think the steady dumbing down will.

When I was a kid in the 80's (this is when houses in Southern California were $200 k, no Suze Orman, no psycho babble on tv, you weren't hearing about your credit score every 5 minutes), people were on top of things. You add distraction and this steady erosion, dumbing down. And aggressive credit card companies....

It was only 15 years ago, but people weren't idiots back then like they are now. I don't know what's changed...you've still got tv, cable, a phone (now more than one phone). Instead of a video rental store, you've got netflix. A car. Video games. What's changed in peoples lifestyles?

I think a lot of stuff in the last 10-15 years, its been way too confusing, too much to keep with for the average person. Points, erewards, surveys, ...points, erewards, surveys. Miles. A lot of fees and charges have been chopped up into 10 or 15 pieces. Perhaps making it harder to keep track of things. I would simplify things massively....you dont have control over your life if you don't.

 

[Khan]

I don't know if the monthly payments will kill us, but I think the steady dumbing down will.

When I was a kid in the 80's (this is when houses in Southern California were $200 k, no Suze Orman, no psycho babble on tv, you weren't hearing about your credit score every 5 minutes), people were on top of things. You add distraction and this steady erosion, dumbing down. And aggressive credit card companies....

It was only 15 years ago, but people weren't idiots back then like they are now. I don't know what's changed...you've still got tv, cable, a phone (now more than one phone). Instead of a video rental store, you've got netflix. A car. Video games. What's changed in peoples lifestyles?

I think a lot of stuff in the last 10-15 years, its been way too confusing, too much to keep with for the average person. Points, erewards, surveys, ...points, erewards, surveys. Miles. A lot of fees and charges have been chopped up into 10 or 15 pieces. Perhaps making it harder to keep track of things. I would simplify things massively....you dont have control over your life if you don't.

Not 'monthly payments', but one thing that I think has changed vastly in the last 30 or so years is the frequency of dining out, whether fast food or sit down.

 

[BLS53]

I don't know if the monthly payments will kill us, but I think the steady dumbing down will.

When I was a kid in the 80's (this is when houses in Southern California were $200 k, no Suze Orman, no psycho babble on tv, you weren't hearing about your credit score every 5 minutes), people were on top of things. You add distraction and this steady erosion, dumbing down. And aggressive credit card companies....

It was only 15 years ago, but people weren't idiots back then like they are now. I don't know what's changed...you've still got tv, cable, a phone (now more than one phone). Instead of a video rental store, you've got netflix. A car. Video games. What's changed in peoples lifestyles?

I think a lot of stuff in the last 10-15 years, its been way too confusing, too much to keep with for the average person. Points, erewards, surveys, ...points, erewards, surveys. Miles. A lot of fees and charges have been chopped up into 10 or 15 pieces. Perhaps making it harder to keep track of things. I would simplify things massively....you dont have control over your life if you don't.

Go back to the 60's and you'll see an even bigger difference in how personal finances were handled. The remarkable thing is, that other than cable TV, internet, and cell phones, there's really few technological break thrus in consumer goods. Products are more reliable yes, but nothing in the scope of "aircars" or other costly futuristic devices have come to pass.

Most "new stuff" is simply repackaged products, that are aggressively marketed as a "must have".

The emergence of consumer credit is another issue. We've replaced the local banker, with huge information networks, where the number of consumers is so great, no lender really knows who they're lending to. Hence we have credit scoring, which in itself is often inaccurate and subject to consumer manipulation.

 

[CRABBY JERRY]

Well you've hit on another problem. People don't buy things based on need, they buy on wants. Our parents may have had one TV and one car. Perhaps a stereo and that was about it. They didn't go out and buy a 60" big screen because the 48 inch just wasn't big enough, or because you needed one in each room. They didn't upgrade their kitchens just because they were tired of the old cabinets.
Interestingly, this isn't by any means limited to Americans. I know a woman who went to live in Singapore. She said when they needed new computer equipment or cell phones, they went to the dump. She said they are crazy over there about keeping up with new technology. In fact, things like blu-ray are much bigger over there than in the US.

Wish the wife was up so I could show her the kitchen cabinet story and maybe she'd understand why I don't see the need to replace 5 year old cabinets and appliances.It's like talking to the wall. I could understand if they were destroyed.