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Old 05-25-2011, 07:30 AM   #41
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They just started voluntary lay-offs at work. You can sign up for 1 week at a time. Almost everyone else I talked to said they couldn't afford to take even 1 week off unpaid. I'll take as much as they'll give me although if I take too much time off then it'll be too hard to go back so maybe i'll just take 1 week each month over the summer. Hard to believe most 40 or 50-somethings at work can't even afford 1 week unpaid
Sounds like a really nice summer ahead, and even nicer since you can afford it.
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Old 05-25-2011, 07:51 AM   #42
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The article makes no mention of how this has changed over any period of time. It could be an improvement vs 1999.

In the corporate world we used to call these "gee whiz numbers". They look impressive but without context don't lead to any meaningful conclusion.
I feel the opposite. While I agree that the "trend" can be interesting, I think the absolute numbers themselves are more worthy of attention. It's troubling that 75% of the population would have trouble coming up with such a relatively small amount of cash on short notice. Whether or not it was 70% or 80% 10 years ago isn't really very relevant - the fact that so many are in such a financially precarious situation is a problem.

It's like looking at the national debt. If I told you that the debt went up or down $x billion this year, that may be interesting, but it could just as easily go the other way next year, or may have been see-sawing for several years. But if I told you that as of today, the US owes $14 trillion, that's the big story. Adding a little here or paying down a little there is pretty meaningless. $14 trillion in debt is a big deal, regardless of what happened with the budget this year.
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Old 05-25-2011, 08:55 AM   #43
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They just started voluntary lay-offs at work. You can sign up for 1 week at a time. Almost everyone else I talked to said they couldn't afford to take even 1 week off unpaid. I'll take as much as they'll give me although if I take too much time off then it'll be too hard to go back so maybe i'll just take 1 week each month over the summer. Hard to believe most 40 or 50-somethings at work can't even afford 1 week unpaid
Ha. When Federal budget woes led to proposals for staggered furloughs I looked forward to the time off. I worried about the impact on some of my employees but for me time was always as important (or more so) than money. For a couple of decades managers in the Senior Executive Service could store up unlimited vacation days. Some saved as much as a year of unused time. I built up a reasonable store for emergencies then used the rest and enjoyed every minute.
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Old 05-25-2011, 10:07 AM   #44
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They just started voluntary lay-offs at work. You can sign up for 1 week at a time. Almost everyone else I talked to said they couldn't afford to take even 1 week off unpaid. I'll take as much as they'll give me although if I take too much time off then it'll be too hard to go back so maybe i'll just take 1 week each month over the summer. Hard to believe most 40 or 50-somethings at work can't even afford 1 week unpaid

Unless you are FI.... I would not take to many weeks off.... it might give them an idea of who to lay off when it is NOT voluntary....
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Old 05-25-2011, 10:12 AM   #45
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Ha. When Federal budget woes led to proposals for staggered furloughs I looked forward to the time off.
I have to admit, I was looking forward to some time off as well. And that last Friday before the budget finally got passed, I felt like a kid on the last day of school before summer vacation!
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Old 05-25-2011, 12:55 PM   #46
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Unless you are FI.... I would not take to many weeks off.... it might give them an idea of who to lay off when it is NOT voluntary....
But if you are FI and close to pulling the trigger, involuntary lay off might look appealing. If I were laid off involuntarily (rather than retiring) I would have received a severance allowance and been able to draw unemployment benefits (oh to be on the Government dole).
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Old 05-25-2011, 01:44 PM   #47
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But if you are FI and close to pulling the trigger, involuntary lay off might look appealing. If I were laid off involuntarily (rather than retiring) I would have received a severance allowance and been able to draw unemployment benefits (oh to be on the Government dole).
Agree 100%.... that is why I said FI... not everybody is right now... I know I am not... (I was, then I got married and was not)
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Old 05-26-2011, 08:43 AM   #48
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Also, nothing is better than going into a car dealer and buying a car for cash- you can really negotiate a low price if you visit a few dealers and let them know you are doing so.
Is this true? I thought they made money from the loans, so cash is a negative for them?


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Old 05-26-2011, 09:24 AM   #49
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Call it "old fashioned" if you like. Like many others here, we are happy to be with this group.(25%) By paying off cc balances each month, and saving to pay cash for cars etc. we have been able to save thousands in interest charges alone.

The look on the car dealers face when I offered 20k cash (wrote a check) for a used tundra was worth more than the "sacrifice" to save....

...getting him to finance it just wouldn't have been as much fun.

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I always thought that paying interest (other than on a home mortgage) was the biggest waste of money possible. At least if you waste money to buy some useless item you at least have something to show for it. But paying interest gives you nothing other than paying more for something than you needed to.

I rarely use my CC and never carried an outstanding balance. I paid cash for my cars, paid off my student loans in 18 months and my mortgage in 9 years (I got tired of paying that interest, too!).

For me, the CC and debit card are generally a safety net, something I use to buy an item or service when carrying cash to buy it is not feasable. Most months I receive no credit card bill, so when I use my CC it is a minor nuisance because it adds one more bill to my household, even if it is a small one.
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Old 05-26-2011, 09:31 AM   #50
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Is this true? I thought they made money from the loans, so cash is a negative for them?


-ERD50

They do make money from the loan... when my mom bought her car, the guy said 'get a loan as we can take $1,000 off the price'... he even said we can pay it off on the second payment... and who cares what the interest rate is (it was 4%)....

So, we did it that way and saved $1,000... cash is NOT king all the time...
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Old 05-26-2011, 09:34 AM   #51
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Is this true? I thought they made money from the loans, so cash is a negative for them?


-ERD50
I've heard that, too. FWIW, about 5 years ago, I took a risk and co-signed on a car loan for a good friend. They came back with an interest rate that, honestly, downright offended me, and I asked them what's the point in me co-signing, if we're still getting a crap rate? I also said something along the lines of "I don't wanna sound like a trust fund baby, but I could just pay cash for the thing"

Well, they did come back with a lower rate, and cut a deal on the extended warranty that my friend wanted to get for the thing so badly. I thought that extended warranty was still a waste of money, but he just had to go in for some a/c work, so he's getting some use out of it, at least!

Oh, and I ended up paying the thing off within about 5 months, and then just let my friend pay me back. Dunno if I'd ever co-sign again, but at least this time I didn't get screwed.
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Old 05-26-2011, 09:34 AM   #52
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Is this true? I thought they made money from the loans, so cash is a negative for them?
Indeed. I've read several times in different places that you should not tell them you're paying cash, don't mention payment and they'll usually assume financing, negotiate as low as you can, then tell them cash. Otherwise they won't negotiate as low of a price for cash.
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Old 05-26-2011, 09:37 AM   #53
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Maybe the bottom 25% of society doesn't need an emergency fund.

A third of households don't own a home, hence rent or live in government housing or government subsidized housing (a la Section 8). Renting smooths the need for emergency cash.

The bottom 25% of society has a zero net worth. They are essentially judgment proof. Medical care is a trip to the emergency room and since they can't pay their bill it gets written off (unless they have government provided health care in which case a dr's visit or hospital visit might cost a couple bucks).

The main concern for the bottom 25% is probably car repair expenses. Maybe being carless temporarily isn't a problem if you can hitch a ride with a friend or take a bus.
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Old 05-26-2011, 09:53 AM   #54
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The bottom 25% of society has a zero net worth. They are essentially judgment proof.
From you and me maybe but what about the changes in bankruptcy that protect credit cards? I haven't paid close attention since I am not a candidate for bankruptcy but CC companies (and the outfits they hand over deadbeats to) can follow you for life now, can't they?
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Old 05-26-2011, 09:59 AM   #55
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From you and me maybe but what about the changes in bankruptcy that protect credit cards? I haven't paid close attention since I am not a candidate for bankruptcy but CC companies (and the outfits they hand over deadbeats to) can follow you for life now, can't they?
I wonder what happens nowadays when a debt is charged off and forgiven, but then gets reported as taxable income, and you can't even afford to pay the taxes on that? I know back in the day, credit card companies would often write off a debt they considered un-collectible, you got a black mark on your credit report, and that was it. But nowadays, the gov't comes after you, saying that forgiven debt is now taxable income.

And, the gov't isn't as easy to shake off as a credit card company.
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Old 05-26-2011, 10:20 AM   #56
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I wonder what happens nowadays when a debt is charged off and forgiven, but then gets reported as taxable income, and you can't even afford to pay the taxes on that? I know back in the day, credit card companies would often write off a debt they considered un-collectible, you got a black mark on your credit report, and that was it. But nowadays, the gov't comes after you, saying that forgiven debt is now taxable income.

And, the gov't isn't as easy to shake off as a credit card company.
Maybe their income is so low the standard deduction would help take care of some of that forgiven debt?
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Old 05-26-2011, 10:23 AM   #57
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For those looking back in history, you also have to look at the average household income in time. The $2,000 in question represents about 4% of the average household income today, maybe a little less. When I started working I made $6,000 a year, and the average income was about $7,000. That would mean the figure I would have to come up with was $280. I don't believe we would have had a problem doing that then or now. In fact it might have been a little harder then as credit card were not as popular.
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Old 05-26-2011, 11:05 AM   #58
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It's not surprising to me. The government is a reflection of the majority of Americans. Government has been living beyond it's means for 40 years and could not raise $2000 in an emergency without borrowing or printing the money. Someone said that in a democracy we get what we deserve and I'm afraid we will.
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Old 05-26-2011, 11:42 AM   #59
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Someone said that in a democracy we get what we deserve and I'm afraid we will.
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Old 05-26-2011, 12:05 PM   #60
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Most months I receive no credit card bill, so when I use my CC it is a minor nuisance because it adds one more bill to my household, even if it is a small one.
Probably, your CC company would be happy to extract money directly from your bank account, and maybe even stop sending you bills. (I was recently notified by my phone company, which is paid automatically with one of my CCs, that they would henceforth add a surcharge to each bill that was not paid automatically.) Down with paper.
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