What does it take to change?

[accountingsucks]

Was watching a Canadian news program (like 60 minutes) and they profiled the plight of a town in Ontario that has suffered alot of job losses this year as it is heavily into auto and ancillary businesses. Anyways they talked to one couple who both were laid off from the same truck factory and the reporter asked them if they would have done anything different.

The husband and wife both chuckled and looked at the reporter as if she had three heads and said no way...."we made good money and spent all of it. There's no way we could live like paupers. I like my big house, cars and all my toys". The piece also made it seem like they had quite abit of debt.

This just baffles me. You'd think that after job losses they would have some regrets and would prefer to have some money in the bank. I guess you either have the mindset of living within your means or you don't.

Also they profiled a single mom who has just a few months left on unemployment benefits. It's sad too see - if anything this reinforces my need to build up a 12 month emergency fund.

 

[Frugality_of_Apathy]

Debt addiction is just like any other addiction. You don't see the problem until you've sold your children into slavery and there's so many open sores on your hands and mouth that you could no longer even feed your addiction if you had the means.

 

[2B]

Debt addiction is just like any other addiction. You don't see the problem until you've sold your children into slavery and there's so many open sores on your hands and mouth that you could no longer even feed your addiction if you had the means.

I love your visualization but disagree with it being an addiction in the classical sense. My experiences with people are that the "debtor class" believes they "need" or "deserve" all the stuff they accumulate or consume. They may keep telling themselves and others how they need to save more but "can't" with all their "needs." They may get a rush from some consumption but it just turns into a real job spending everything they can.

I am amazed with some of the people I w*rk with. Most of the senior people in my area make safely over $100k/yr. Some are happily saving but some are stretched out on debt. I hear the stories on how they can't get by on their incomes and some have w*rking spouses making around what they do. It usually involves lots of late model cars, kids going to high priced colleges and really big houses. I've stopped saying anything except expressing sympathy because they don't want to change.

Crashing and burning is usually the only cure if even that will work.

 

[bruce1]

WHat burns me is that you and I as LBYM people are going to pay for these idiots spendthrift ways.

 

[Martha]

Rationalization is a powerful human characteristic. Otherwise we couldn't live with ourselves.

 

[ladelfina]

experiences with people are that the "debtor class" believes they "need" or "deserve" all the stuff they accumulate or consume.

I don't think they come up with this idea entirely on their own, though. The "you deserve it" is part of almost every consumer item and credit pitch (from L'Oreal saying "you're worth it" to MasterCard that tells you how to arrive at 'priceless' moments via the associated consumer spending, just the first that pop into my head).

I was just reading an article (I think at Science Direct?) about how people's brains are hard-wired to respond to items of value. So maybe the instinct to acquire those overrides rational thought. Also, what Martha said.

 

[dex]

There are many ways to explain what that couple said - non of which means they will change.
Pride - not wanting to admit they were wrong.
Entitlement - they deserved it.
Victimization - not their fault
Ignorance
Love Vs Fear - love the things more than the fear of poverty.

People don't change - the 3 generational cycle just repeats.

Savers
Maintainers
Spenders

 

[ERD50]

This just baffles me. You'd think that after job losses they would have some regrets and would prefer to have some money in the bank.

But what you don't know is - how many people did they interview before they found that one, and decided it made for "better" TV?

I saw what seemed like 100's of on-the-street interviews with people wailing about $4 gasoline, no one put me on the air saying that I thought $4 gas was OK.

Remember the guy who came around a while back, posting and looking for people who were facing problems because their ARM has increased? He had no interest in my story, where my ARM had decreased and I was happy with my ARM. I knew the risks/rewards and would accept them, good or bad.

IMO, it is not journalism when you set out to show a a single (dramatic) viewpoint, rather than asking " how is X affecting people".

-ERD50

 

[SteveL]

I like to oversimplify sometimes.....but;
I think people either find happiness within themselves, or they look for it externally. It is the latter group who fill the ranks of people pulling handles at the casinos, constantly shopping, worrying about what the Jones' have, etc. The former group find it easier to save....

 

[Frugality_of_Apathy]

I love your visualization but disagree with it being an addiction in the classical sense. My experiences with people are that the "debtor class" believes they "need" or "deserve" all the stuff they accumulate or consume. They may keep telling themselves and others how they need to save more but "can't" with all their "needs." They may get a rush from some consumption but it just turns into a real job spending everything they can.

Crashing and burning is usually the only cure if even that will work.

People addicted to smoking also say they need to quit, but they also wake up every morning and also need a cigarette. And while they may get a rush from that first dose of nicotine it just becomes inconvenient and a real job to have to smoke every hour.

Crashing and burning is usually the only cure if even that will work.

I fail to see your disagreement that it is not an addiction in a classical sense. Physical addictions are usually broken within a week and many addicts get physically clean at rehab centers and then go right back to it because it's the mental addiction that is the real culprit.

 

[wildcat]

But what you don't know is - how many people did they interview before they found that one, and decided it made for "better" TV?

I saw what seemed like 100's of on-the-street interviews with people wailing about $4 gasoline, no one put me on the air saying that I thought $4 gas was OK.

Remember the guy who came around a while back, posting and looking for people who were facing problems because their ARM has increased? He had no interest in my story, where my ARM had decreased and I was happy with my ARM. I knew the risks/rewards and would accept them, good or bad.

IMO, it is not journalism when you set out to show a a single (dramatic) viewpoint, rather than asking " how is X affecting people".

-ERD50

Yeah, agree. I notice such practices by the media almost each day I watch the news - especially when some new economic news is released.

People declaring bankruptcy - 6-8 months ago due to the rising oil prices as they reported. Now it's due to the economy. They never seem to go into great detail about the person's financial past/track record. The most recent setback is often just the straw that broke the camel's back, nothing more.

 

[freebird5825]

"Feel good spending" is what my dh2b calls it. If a person does not like themself or whoever, that person will go crazy with runaway consumer purchases to feel good inside.
He got involuntarily caught up in paying and paying and paying even more, for this type of behavior by a certain party in a previous life, but he escaped it and he's all better now.

 

[ladelfina]

freebird, I hesitate to speak for anyone but myself, but a spending spree IS satisfying on a visceral level. It's like dragging home a yummy mastodon leg: conquest!

 

[EddieG]

Beats me

Some people just want what they want and want it now. Earning it doesn't even cross their minds. I've seen it personally. I know a man who had the same same as his son. Knew his SS#, DOB, etc.
Since he had used up all his own credit, he used his son's info(stole his own sons identity) to get more credit to keep up his "life style". Sad.

I know a twenty eight yo woman who hasn't kept a job for more than 3 months in a row, but still does all her shopping at Abercrombie, etc. My wife and I shop at thrift stores and off clearance racks, and we could afford high end if we wanted to. We ask her why she doesn't do the same since she can't afford high end items. She looks at us like we're crazy. She wouldn't be caught dead in a thrift store.

Just found out her grandmother bailed her out on all her credit card bills. Like 20k. What did she learn from that?

What I've seen is that some families teach financial discipline. Some don't. The ones who do wind up paying for those who don't.

 

[UncleHoney]

The husband and wife both chuckled and looked at the reporter as if she had three heads and said no way...."we made good money and spent all of it. There's no way we could live like paupers. I like my big house, cars and all my toys". The piece also made it seem like they had quite abit of debt.

Have no fear, there are solutions to the spendy life style.

People Pulling Up to Pawnshops Today Are Driving Cadillacs and BMWs - WSJ.com

 

[ziggy29]

The ones who do wind up paying for those who don't.

That's the most infuriating thing about this.

I have a paid-for house, no debt and a year's worth of living expenses in the bank. I've never defaulted on a loan. I put nearly 25% of my income into my retirement goal regularly.

These are financial habits I was fortunate enough to get into (and work toward) since my early 20s. It was supposed to be what secured my future. But how can I secure my future when they keep taking from me in order to bail out everyone else? At the end of the day, it feels like the government is trying to secure everyone's financial future *except* my own.

"Moral hazard," indeed.

 

[freebird5825]

freebird, I hesitate to speak for anyone but myself, but a spending spree IS satisfying on a visceral level. It's like dragging home a yummy mastodon leg: conquest!

I'll take my mastadon medium rare, please, with a little A1 on the side.

 

[Bimmerbill]

I'm pretty conservative, but sometimes I get upset seeing those who get everything now. They usually get bailed out, or qualify for some sort of help.

I just plod along, saving what I can, trying to do the best I can.

Sometimes I wonder why I shouldn't just get everything I want, NOW! Am I missing out on things?

All these people who live way beyond their means will eventually get too old to work, and someone will take care of them.

I guess I want in on the action!