Saving would be nice, but...

[FIREd]

Have you guys seen this video?

Where a home of their own is an elusive dream - Gut_Check - MSNBC.com

Having been a saver all my life, I sometimes forget how a lot of people feel about saving money. To me saving money is uplifting, it's one more step towards freedom, it's empowering, but in all fairness it requires work, discipline and sacrifice and it's not always fun.

For many people though, saving money gets in the way of life. The woman's attitude in this video is very telling: I would love to save money, I would love to have a house, but I don't want to sacrifice my current lifestyle to reach those goals. Actually it's like she does not even believe that saving money is doable, so her attitude is why even bother...

She reminds me of my sister who has always had nicer TVs, nicer computers, nicer furniture than me, but who always complains about how hard it is to save money and buy a house. She complains that the cards are stacked against her and that it is impossible for her to get ahead in this world. But when I suggest that she starts saving her money to improve her financial situation, she always looks at me like I am talking crazy. Recently she told me of her retirement plans: she thinks that saving money for retirement is futile because she expects to inherit enough money from our parents to retire comfortably.

So do you know anyone like the woman in the video? Is that attitude toward saving prevalent in your opinion?

 

[PBAT]

While I know plenty of savers, I also know several families that barely save, and spend way more than they earn. And several have children that are learning these values.
One seven year old was commenting that he felt bad that he was richer than his friends - his parents (just two of them) own four new cars, they vacation in nice places, the four young kids always have new toys and clothes, and they eat out every few days. What he doesn't know is the cars are financed, one with a HELOC (paying interest only for three years now), the grandparents pay for all vacations and preschools, and dinners and clothes are charged. And they have no college savings.

I have wondered how these folks expect to ever retire or pay for their kids' college, but after reading your comment I bet they are expecting to inherit something from their parents. Not a windfall, but at least a paid off house to sell. I'm sure they haven't considered that their parents may need to sell the homes themselves one day.

It does seem like some good fortune happens at just the right time, though. A coworker was buying too much house a couple years ago, interest only ARM of course, and with a couple weeks til closing still had no idea how to come up with 10k closing costs. BAM! she won over 10k in a radio contest!

I don't mean to sound like a savings snob - we splurge sometimes too - but other than the big screen HDTV, it is mostly on family experiences/travel, not things - and we also plan for the future. And plan. And plan...

 

[Fireup2020]

So do you know anyone like the woman in the video? Is that attitude toward saving prevalent in your opinion?

Most Americans in general! (but obviously not members of this board!)

 

[Dog]

The wife wants instant gratification - she doesn't have the patience to watch their savings grow. It's too bad the husband and wife are not on the same page. It may require that one of them takes on a second job to boost their savings. Owning a home is still a major accomplishment to be worked for and earned - not an entitlement.

 

[NinjaPigeon]

The woman's attitude in this video is very telling: I would love to save money, I would love to have a house, but I don't want to sacrifice my current lifestyle to reach those goals. Actually it's like she does not even believe that saving money is doable, so her attitude is why even bother...

While I agree with your observations, did you look at their budget? It doesn't seem to me they are being all that wasteful. Yes, they have a car payment, but as long as they plan to keep the car for many years, that isn't all that bad. The 17k on the technical school for education Dale obviously isn't using based on his job description seems to have been a very poor investment, though.

I don't think they could do much better than they are currently doing. However, her attitude is definitely going to prevent them from improving if their income gets another increase.

 

[NinjaPigeon]

To me saving money is uplifting, it's one more step towards freedom, it's empowering, but in all fairness it requires work, discipline and sacrifice and it's not always fun.

I agree with this sentiment. To me, saving is its own reward. While I am only about two years or so into my FIRE journey, I am amazed at how far I've come.

I can remember just a few years ago being worried about how I'd make my first student loan payment, which was about $350. It was almost my entire bank balance at the time, and if I hadn't gotten my consolidation completed for the following month, I'd probably have gone under. While I still have the loan (2.65%), I no longer worry about how I'll make my payments.

 

[youbet]

Per your earlier posts, you and your wife are a DINK couple (at least I've never heard you mention family) with high income jobs living in a low cost part of the country. The couple in the video appears to be a one earner family with kids living in a high cost part of the country. While I don't particulary agree with the wive's savings outlook, I understand where her attitude could come from. I'm sure there are ways they could do better. And I'm sure there are ways they could do worse. I sincerely hope they, and other lower middle class families like them, can find a way to live and prosper in today's world.

The bottom line is that we all get one pass through this thing called life and we all play the hand dealt to us the best we can.

I've never understood people who can't cope with the fact that others might live their lives differently than themselves.

 

[FIREd]

Ninja,

I agree that living on 70K in Seattle with 2 kids can't buy a lavish lifestyle though 70K is still a great deal of money. My point though is that if your most important goal is saving money to buy a house (as they both state), then you have to work on it and not just wait for money to magically appear in your savings account. Perhaps it would require reducing their spending but the woman does not seem to want to hear about it. I guess I was trying to say that they are making choices that are not compatible with their goals, but yet expect things to work out anyways.

 

[FIREd]

Per your earlier posts, you and your wife are a DINK couple (at least I've never heard you mention family) with high income jobs living in a low cost part of the country.

You are correct about that.

I've never understood people who can't cope with the fact that others might live their lives differently than themselves.

It was not long ago I was living on 15K a year in a fairly high COL area and still managed to save $500 a month. So I know what it is to live cheap and close to poverty level. I made the choice to save my money and I just kept at it. My point is you can't say you want to save money but at the same time say you don't want to sacrifice anything especially when your income is not that high to start with.

 

[haha]

I've never understood people who can't cope with the fact that others might live their lives differently than themselves.

This board might fall apart if there weren't people who live differently for us to look down on.

Ha

 

[NinjaPigeon]

This board might fall apart if there weren't people who live differently for us to look down on.

Ha

The view isn't so great from where I'm standing, but then again, I'm only about a foot above the "non-believers" I have a number of years to go building up my [-]ivory tower[/-] nest egg.

Jokes aside, I'm starting to lean more towards the "live and let live" philosophy. I truly do not understand people that don't want to save, and they don't seem to understand me either. But I'm happy to let them keep driving the economy while I profit from it

 

[youbet]

You
It was not long ago I was living on 15K a year in a fairly high COL area and still managed to save $500 a month. So I know what it is to live cheap and close to poverty level. I made the choice to save my money and I just kept at it.

And that's great FIREdreamer. I support you doing it your way. But living close to the poverty level wouldn't work for us. For DW and myself, we chose to smell the roses along the way. We had a family and DW was a stay-at-home mom for some time. We took nice vacations, had a nice home, the usual toys, etc. Not surprisingly, I had to postpone ER to 58 yo. But that's the way I wanted to do it.

I do agree with you that the wife in the video seems overwhelmed by the fact that their potential savings would grow so slowly and with such difficulty in relation to the amount they need to amass for a down payment. But, every journey begins with a first step.......

 

[laurence]

Ha makes a good (tongue in cheek) point, as do others. I used to rage at certain friends and family members (mostly to myself) for not getting ahead. But then again, here they were living a lifestyle only similar to mine, their problem is they weren't making as much as DW and myself. It's easy for me to look down my nose at someone for not saving, when I have the luxury of being able to own an HDTV, nice new(er) cars and be able to buy a house, save six months expenses away, and have significant amounts socked away in retirement accounts every month. Heck, even when DW and I first got married, we were making a combined 65-70k. Now even with her staying home and only working part time, we pull in six figures. So it's not like my friends want a personal jet, they just want a nicer car, and to be able to eat out on the weekends.

I've adjusted my viewpoint, and I loudly congratulate anyone I know who so much as get's $1 ahead in any month. The only time I get a little peeved is when they say, "you get all the breaks, how come I don't..."

 

[FIREd]

And that's great FIREdreamer. I support you doing it your way. But living close to the poverty level wouldn't work for us. For DW and myself, we chose to smell the roses along the way. We had a family and DW was a stay-at-home mom for some time. We took nice vacations, had a nice home, the usual toys, etc. Not surprisingly, I had to postpone ER to 58 yo. But that's the way I wanted to do it.

And I support you doing it YOUR way. As long as you didn't complain about not being able to retire sooner while you enjoyed your home, vacations and toys... But they are complaining they can't save money when they could reduce spending, so they are fair game...

 

[youbet]

This board might fall apart if there weren't people who live differently for us to look down on.

Ha

Excellent Ha. You are truly an insightful observer of life!

 

[Robert the Red]

She reminds me of my sister .... Recently she told me of her retirement plans: she thinks that saving money for retirement is futile because she expects to inherit enough money from our parents to retire comfortably.

That might be semi-rational on her part, depending on the parents' situation. I know a guy whose father inherited $20+ million back in the 1960s (more than $100 million in current dollars). My friend was told that he'd get none of it ever, since his folks intended to live wild and spend it all by the time they died (they did pay for his college, though, but after that he was on his own 100%). So he saved and worked hard. And earned his FI. And his folks died recently and left him about $3 million -- they hadn't quite been able to burn through all of it, though they apparently tried pretty hard. So he inherited more (double? I'm not sure) than he saved/invested with 25 years of work. Maybe he should have just loafed?

Probably not, but someone could make the argument.

 

[igsoy]

I'm not quite sure where this couple in the article is spending all their 70k. There is no state income tax in WA, they should have 48000/yr left after FICA, fed, and rent. So they need to spend on food, minimal child care, utils, trans, and gradually pay down 25,000k other debt out of 48000k. Doesn't seem too austere to me.

 

[Khan]

Something jumped out at me from the budget(other than the spelling error):

Miscellaenous: 300.
...
Spending money: 265

 

[TromboneAl]

So they need to spend on food, minimal child care, utils...,

I think they spend a lot on food.

[man, am I in trouble now!]

 

[Milton]

While I agree with your observations, did you look at their budget? It doesn't seem to me they are being all that wasteful.... I don't think they could do much better than they are currently doing.

Yes, I agree. There doesn't seem to be a tremendous amount of fat in their budget, although Khan is quite right that the $300 per month for "miscellaneous", and $265 for "spending money", bear closer examination. They could also save $130 a month if they ditched the unnecessary cell phones. Still, the potential savings don't add up to much, really.

Obviously we don't have much information to go on, but the wife's comments could be a defensive reaction to the husband's possible penny-pinching tirades (as a "conservative Republican" who is a self-confessed "devoted listener of talk radio", he is probably capable of anything!). There is nothing in the short clip, or the accompanying article, to indicate that she spends, or wants to spend, money on fancy clothes, cars, vacations, or similar frills.

I would suggest that rather than looking for additional economies, what they really need to do is focus on the "unexpected expense(s)" that have "popped up" and wiped out their past savings. What sort of expenses are those? Can they be avoided, or budgeted for, in the future? It is water under the bridge now, but there are probably important lessons that could be learned.

I have wonder how these folks expect to ... pay for their kids' college

The article addresses that issue: "Dale says the girls will need to pay for college if they decide to go".

The couple in the video appears to be a one earner family with kids living in a high cost part of the country.

Actually, both parents work: "(their) income (comes) from Darby’s job in technical support with a large electronics manufacturer and Dale’s position as a manager in a local produce business".

They chose to have two children before getting their finances under control. That was silly and irresponsible. IMHO, anyone who has a negative net worth is not in a position to incur the substantial, and largely unavoidable, expenses of childrearing.

They also choose to live in "one of the most expensive housing markets in the nation ... the cost of a home where they live is nearly double the national median”. That's also silly. It's not like they have specialized, high-paying jobs that essentially require them to live in Seattle: a grocery store manager and a technical support worker can find jobs pretty much anywhere.

We all play the hand dealt to us the best we can

Notwithstanding my comments above, I agree with your point. Their biggest handicap is probably not that they are poorly-educated, live in a high-cost area, etc.; it's that neither one of them has much of an IQ. Obviously, they can't help that.

All of us who were born with good genes and are relatively intelligent should be very grateful for winning out in the game of life, rather than scornful of the [-]stupid[/-] less fortunate. Admittedly, it can often be a challenge!

 

[youbet]

All of us who were born with good genes and are relatively intelligent should be very grateful for winning out in the game of life, rather than scornful of the [-]stupid[/-] less fortunate. Admittedly, it can often be a challenge!

Indeed......a challenge to all of "you."

 

[justin]

I'm a big time saver, but I can definitely see where the wife is coming from.

Playing devil's advocate for a minute: Why spend a ton of effort to scrimp and save just to have a $25,000 down payment for a house that will cost $400,000 and have a huge mortgage payment? Right now they are doing ok in a rented house paying only $1,050/month. After they buy the new, expensive house, then they will have to continue to scrimp and save to afford the oversized mortgage payment.

Maybe the wife wants to enjoy her time and money now instead of saving up for a big house purchase that she places a lower priority on? The husband might be stuck on this "American Dream" crap of owning your own home is the only way to be a upstanding citizen.

If it was my money to waste, I'd rather waste my money on consumer goods, vacations, and dining out instead of massive interest payments on an overpriced house that I don't really care to own, maintain, clean, insure, upgrade, etc. etc. That is, of course, assuming I couldn't just save the money and FIRE one day...

 

[FinanceDude]

I'm a big time saver, but I can definitely see where the wife is coming from.

Playing devil's advocate for a minute: Why spend a ton of effort to scrimp and save just to have a $25,000 down payment for a house that will cost $400,000 and have a huge mortgage payment? Right now they are doing ok in a rented house paying only $1,050/month. After they buy the new, expensive house, then they will have to continue to scrimp and save to afford the oversized mortgage payment.

Maybe the wife wants to enjoy her time and money now instead of saving up for a big house purchase that she places a lower priority on? The husband might be stuck on this "American Dream" crap of owning your own home is the only way to be a upstanding citizen.

If it was my money to waste, I'd rather waste my money on consumer goods, vacations, and dining out instead of massive interest payments on an overpriced house that I don't really care to own, maintain, clean, insure, upgrade, etc. etc. That is, of course, assuming I couldn't just save the money and FIRE one day...

justin, you make a lot of sense.......some people should not buy a home just to have a home...........

 

[maddythebeagle]

Good point justin....and besides, if all of these "tweeners" would just figure out buying a house and having a mortgage isnt the thing to do, then housing prices might come down and then they could afford it...

 

[Gumby]

I didn't see anywhere in the article that told their ages. It wouldn't be the end of the world if one needed to wait until their 30's to buy a house, and as Maddy points out, it may not be necessary at all. I have seen lots of people in bondage to a house and mortgage when they don't need to be.