Will the monthly payment be the death of us?

[Canadian Grunt]

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?

Where I live up in Edmonton Alberta, Canada the companies have managed to harness our reserves of cash by applying monthly standing charges for piping gas, and infrastructure costs whether you use it or not.

So up here you can add.

Water, Sewage, and Garbage pick up
Natural Gas
Municipal Taxes
Electicity

 

[Milton]

All of the monthly expenses listed by Art G are purely optional.

• cable bill - I don't have cable
• internet bill - I use a dial-up service, which costs less than $10 a month. And if necessary, I could easily do without
• satellite radio - I don't even know what that is (why would anyone pay for radio?)
• cell phone bill - I don't have a cell phone
• day care - I don't have children
• car lease - I paid cash for my Corrolla
• credit card interest - I do use a no-fee credit card, but of course I pay the balance in full every month, so there is no interest.

People are free to spend their money, or save it, as they see fit. Personally, I have no sympathy for the spenders.

 

[Art G]

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.

Going through stores like Home Depot or Lowe's can be deadly now. Everytime I walk through the store I see things I'd love to have in my home. The new toilets and sinks are beautiful! I replaced all the faucets in my house and spent about $1300, JUST FOR FAUCETS! Of course I could have gone the cheap route for around a hundred, or not replaced them at all. Lately, every weekend my wife finds something else to work on.

BTW, to add to my original thoughts, how many of you out there are on a long term contract with your phone company, or didn't take the free phone, but instead paid for the upgrade? How many of you have kids with texting?....or games?

 

[Milton]

Going through stores like Home Depot or Lowe's can be deadly now. Everytime I walk through the store I see things I'd love to have in my home. The new toilets and sinks are beautiful!

Please tell me you're kidding.

 

[FinanceDude]

Please tell me you're kidding.

He's not. Home Depot and Lowes are to men like J Jill and Kohls are for women. Places to spend money.

 

[Milton]

Well, maybe some men.

Personally, I can't get excited over the Fall 2008 toilet line-up (!). The latest sinks and faucets don't do anything for me, either.

 

[ikubak]

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?

Maybe we can get the government to bail us out of our monthly payments to save the the economy.

 

[Art G]

Please tell me you're kidding.

No I'm not kidding. They've got some really cool looking sinks and stuff!

 

[Milton]

They've got some really cool looking sinks and stuff!

Ah yes. One should never underestimate the insatiable drive of the American consumer to acquire 'stuff'.

 

[Art G]

Hey, I didn't say anything about practicality. In fact, it's proof that we spend on stuff we don't need. Any chance Ace Hardware would have carried anything like that a generation ago? It's crazy I tell ya'!
But at least I'm not paying monthly for it!!

 

[Marquette]

Discretionary monthly expenses:

$65 - Sprint family plan (phones were free with purchase)
$15 - Netflix
$12 - Rhapsody
$350 - auto (but $4k left on this, which means we'll probably pay it off by end of October)

Two of those (Netflix and Rhapsody) easily pay for themselves w/r/t cost avoidance (no movie purchases, no music purchases).

 

[tmm99]

Maybe it's a good thing some people spend money on nice looking sinks and faucets and replacing things that are only 5 years old, etc. I mean what would happen to economy if everyone was frugal like some of us here? Tons of companies would go under, for sure.

 

[Milton]

Perhaps. But with all respect, that's not such a long stretch from arguing it's a good thing that we have wars, otherwise all the missile companies and nerve gas manufacturers would be forced out of business.

If we could eliminate the throw-away society, we might have less employment but with a little social engineering we could all wind up with more leisure time. It'd be easier on the planet, too.

Anyway, it's probably a moot point. There is zero chance a majority of people will stop wanting to buy the latest "new and improved" products, regardless of whether they can afford them.

 

[CRABBY JERRY]

Home Depot

No I'm not kidding. They've got some really cool looking sinks and stuff!

I don't know Art, but I think it would look just as good with the orange 5 gallon bucket they sell. And guess what! They just lowered the price 50%.

 

[Marquette]

Oh, almost forgot one expense... monthly retainer fee for a penguin exterminator.

 

[John23]

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.

Yeah, I don't get it.

Compared to 20 or 30 years ago, what's different?

-People still sit in front of a tv.

-They listen to music.

-They call people on the telephone.

They drive, they fill up their cars with gas. Instead of a transistor radio, it's an Ipod. But I dont get all the confusion, the billing. "Paper" has exploded by about 50 times.

Marketing has gotten much more aggressive, some of it bordering on insanity (black friday, who cares?).

You'd think we were living with flying cars, or hoverboards (like Back to the Future II). But all the confusion and clutter, I honestly dont get. Like in the 80's, early 90's, if you wanted to buy a video game, you go to the mall and buy a game (maybe with cash). And now you've got your bonus points, and cards, and points, and all this "Stuff".

Seems like since about 94-97, that's when all these guru's started popping up (Orman, Kiyosaki, etc). Marketing got much more aggressive. People use to buy through classified ads. And now it's ebay, and your payment is chopped up into 15 pieces (selling fee, final value fee, paypal fee, all that). Commecials started getting annoying, much more aggressive.

I don't know, people got on this monthly payment, dumbed down conveyor belt. Credit cards got crazy aggressive. Steady dumbing down of apr, and all kinds of things. Peoples lives are about the same, but it's like they don't know anything anymore.

People have gotten more and more manipulated, but their lives haven't improved.

 

[Art G]

People have gotten more and more manipulated, but their lives haven't improved.

No, I'd say lives have gotten worse. I think my kids have missed so much because of all the organized events these days. Of course, I think kids also have much more pressure on them these days. I guess we all do. The expression, "The check's in the mail" is gone. Or, "I was out of pocket".

 

[al_bundy]

Please tell me you're kidding.

Home Depot and Lowes are low end. HD owns a snobby chain called Expo Design Center that sells $3000 showers and $1000 sinks along with tiles that cost $30 a square foot and kitchens that cost $100,000 or so with all the fixins.

back in the bubble days wife and I found some deals there at times and the place was almost always full

 

[JustCurious]

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".

I disagree, I think there have been many technological breakthroughs and improvements in consumer goods that we now take for granted, that simply didn't exist 40 years ago. Some examples come to mind:

-flat screen and widescreen TVs that are larger and high definition
-digital audio systems that are generations improved over the 1960's
-ipods and mp3 players that are digital, as opposed to tapes or cds
-online billpaying and banking
-online everything, including travel sites, shopping, insurance, investing
-computers and laptops that are getting faster and more useful every year
-software (remember using a manual typewriter or doing your taxes by hand?)
-online sharing of information (like this board)
-PDAs that use 3G technology to access email, internet, etc
-wireless networks to access the internet from almost anywhere
-safer cars (think airbags, ABS brakes, side impact bars, rollcages, etc)
-more efficient and reliable cars (remember how dirty the exhaust was?)
-hybrid cars (soon to be all electric cars...google "Chevrolet Volt")
-airplanes that are much more efficient and quieter (remember how loud airplanes were?)
-satellite TV
-GPS navigation and location devices (they can save your life if you are lost in the woods or at sea)
-remote control devices (for TV, garage doors, car alarms, etc)
-microwave ovens
-more energy efficient and safer building and home improvement materials (remember asbestos and lead paint?)
-more diverse energy technologies now available, like solar, wind
-lighter and more efficient and more comfortable clothing (google "lycra")
-lighter and stronger composite materials (remember wooden tennis racquets?)
-digital audio and video (remember VHS tapes and audio cassettes?)
-VOIP internet communications (remember paying $$$ for international calls?)
-greatly reduced or eliminated long distance domestic telephone charges (remember paying for long distance calls by the minute?)
-email
-Google maps, Google docs, or Google anything for that matter
-UPC scanners in retail stores at checkout (remember paper price stickers on every product?)
-self checkout kiosks at some stores
-ATM machines
-credit cards that are accepted almost everywhere, and give you cash back
-realistic video game systems
-3d movies
-massive data storage in miniature size, eg. USB thumb drive
-digital storage of data and statements, eg. PDF files (remember large filing cabinets for old statements?)
-Wikipedia (remember buying Encyclopedias?)

These are just some that come to mind. I'm sure there are others that I left out.

 

[samclem]

Of this (impressive) list, only four have made a significant impact on my life:
- The microwave oven
- The online sharing/availability of information (which includes many individual advances--cheap, fast home computers, the Internet inforation infrastructure, high-speed data to residences).
- Cell phone technology (voice only--no need are desire for on-the-go texting or internet).
- ATMs

I think it is the same for most people. Lots of gadgets, lots of "overhead" in monthly bills, lots of thinking time needed to use/keep up with the gadgets, but not a lot of true payoff.

 

[JustCurious]

I think it is the same for most people. Lots of gadgets, lots of "overhead" in monthly bills, lots of thinking time needed to use/keep up with the gadgets, but not a lot of true payoff.

Sam, I disagree, and I think it's a matter of perspective. I think that most of those items make my life much easier, more efficient, more comfortable, more productive, and some of those items actually save my money compared to the old ways. This may be a generational thing, and I suspect you are older than me.

By the way, you forgot to include safer and more reliable cars. You don't drive?

 

[samclem]

By the way, you forgot to include safer and more reliable cars. You don't drive?

Reliable: I kinda enjoy tinkering with cars, and miss carburetors and points. But, I do enjoy the reliability of today's cars, I just wouldn't say it's a life-changing advance.
Safety: Way over-rated! You pay for it for years, and you only get to sue it for milliseconds! Seriously, it's nice to have a safe car, but the major safety advancement was available decades ago-seat belts (with shoulder harnesses). Folks just didn't use them.

 

[jIMOh]

I agree the monthly "payment" is a HUGE consumer issue. In addition to the payment, the CONTRACT is also quite tough to deal with.

How many of you have a cell phone? Does it have a contract?
I found out my home security system has a FIVE year contract which renews into another 5 year contract the month after the first 5 year contract ends. OUCH.
Cable and bundling have contracts built in.

Between the payments and the contracts, I actually think the average business which does work with the average consumer is out to screw the consumer from a good credit rating (if it wasn't for my credit score I would walk away from the home security system deal right now).

 

[JustCurious]

I found out my home security system has a FIVE year contract which renews into another 5 year contract the month after the first 5 year contract ends. OUCH.

When did you find out? Was it before or after you signed the contract? I would never agree to a five year contract.

 

[Milton]

Home Depot and Lowes are low end.

Yes, I know that Home Depot is down-market, and that it's easy to find more expensive places.

It wasn't the prices that I found difficult to believe: it was the idea of a grown man getting excited about toilets and sinks. But to each his own, I guess.