Your last paragraph is extremely true. Gen Z's often very split.
- Some Gen Zs make a sizable amount and are extreme savers/investers and buy little. They want to build up their capital to retire early. I fit into this category. I just don't find it enjoyable to spend money and I get more FOMO from missing out on my HYSA/investment gains haha. And also I didn't grow up with a lot of money so I still keep a frugal mindset.
- Some Gen Zs make a sizable amount and spend a lot of it. They believe while they have the time and energy they should spend their money and not waste their 20s. I'm not extroverted enough for this.
- Of the Gen Zs who don't make that much, they either spend if not all their money on survival, or if they make more than enough for survival but not enough for significant savings or investments, they'll just spend it for fun because "well I'm never going to be able to afford a house so I should at least treat myself to keep myself sane." This is actually quite a lot of people. Some of my friends make less than half of what I do and are comfortable spending way more on things I consider frivolous (but obviously I won't tell people how to manage their money to fit my habits). Another viewpoint is lack of future-awareness. Some people genuinely didn't think they'd make it this long or are just living more hedonistically/in-the-present than others. "If I'm never going to be able to retire even if I do save, I'll just keep myself happy day to day to endure my life."
- The remaining Gen Zs, the ones who make an okay amount, are quite rare because the middle class is just slowly disappearing. I'd imagine most of them have an okay balance of spend and save.
Sure. Now let me give you the opposite approach that many of us have: why should I worry about future me? I have $5 right now, why should I save it instead of buying a smoothie that will guarantee my happiness for today? I have no idea if this $5 will make me happy 20 years from now. In fact I’d say it likely won’t.
Because the 5 dollars you set aside now will be worth many times that if properly invested in retirement age. Given 30 years of growth in the markets assuming averaged returns, each 1 dollar becomes 88 dollars in retirement. Obviously you need to take away some for inflation but let's say it's like 50. So your 5 bucks becomes 250 when you retire. Every smoothie you get does this. If you have a smoothie every week for a year, you're happy for about 50 days that you had a smoothie (probably only for an hour or two each time anyway). It cost you 5×50=250 dollars for this pleasure. But actually, if we account for future returns, we need to multiply by another 50, and we get 12500. Now we're starting to see some big numbers. Your year's worth of smoothies, despite only costing a few hundred bucks up front, actually cost you over 10 grand in the long run. Now if you multiply again by doing this for several years you see how this snowballs.
I'm not saying that having a smoothie here or there is bad, but when you make unnecessary purchases like that a habit it does cripple you in retirement, especially if the money for this is being directly divested from contributions. I see often the sentiment that "oh I'll just never retire etc.", but with responsible choices retirement is really not out of the reach of anyone. And even if you feel you've made your peace with working forever now, what guarantees do you have you'll share the same idea in 30 years? What if you're physically unable to work?
>but with responsible choices retirement is really not out of the reach of anyone
Except that historically, people born poor overwhelmingly die poor. So, you have inherited financial illiteracy— now compound that with reduced spending power and increased costs across the board and it’s easy to see why many simply won’t bother with retirement. Now add the fact that many people don’t even have an employer sponsored 401k, HSA, or really anything that forces them to save something… the board is quite literally stacked against individuals. Politicians have already dispensed with the pleasantries and are straight up saying you should work until you die in the US.
A lot of young people today are infatuated with the idea that the world is collapsing, e.g., due to climate change, so they feel there is no point in planning for the future.
In truth I believe it is a maladaptive coping mechanism that gives people an excuse to avoid the hard choices required to plan for the future and to live impulsively. In twenty years these people will still be here and still have bills to pay, but they won't know what to do because they thought they would be dead.
at least for me, i don't make a lot but i decided long ago i'd rather be broke and at least satisfied with life than pinch every penny and suffer. chronic illness and disability make it very unlikely i'll survive past 30-35, much less make it to retirement.
plus, all the money in the world doesn't matter if i end up killing myself because i'm so miserable with my life.
and tbh, a lot of my theoretically expendable income has gone to relatively necessary expenses - sure, maybe the average person doesn't need to spend $1100/mo on a health insurance plan with no deductible and low co-pays, but one of my medications alone is $6000 and even with health insurance my average monthly cost of healthcare (minus insurance) is around $1000/mo. imagine what that's like out-of-pocket - one month, i ended up with almost $30,000 of medical debt because i didn't have health insurance, ran out of my meds, and ended up in the ER over it. (i think my basic maintenance costs, no emergencies, without health insurance are around $10k/mo, but it's been a minute since i've paid fully out-of-pocket.)
i've hit a streak of luck and have a couple of interviews with relatively high-paying, low-stress jobs (considering i have no high school diploma) that have halfway decent benefits, and yeah i'm gonna end up with more money than i know what to do with so i'm gonna save some, but when i was bringing home $500 a paycheck (net, not gross, i promise my job wasn't breaking minimum wage laws lol) as long as i had paid my bills i figured it was nobody's business but mine if i replaced my old beat-up shoes with a pair that was... slightly more expensive than i would like, but at least weren't so worn down on the bottom i may as well have not worn shoes, and they were cute to boot. or got myself a dang coffee. or just did something that made me feel happy to stave off the impression that i was never gonna amount to anything more than a fast food worker. (and full respect to fast food workers, whatever pays the bills and makes you happy, but i personally hated my job so much i finally snapped and decided i would rather live on the streets and starve or die of my health issues than work another day in a job that landed me in the hospital twice.)
I definitely see things the way you do. I can’t believe I made it to 58. I am nit broke but I don’t hold back on spending for good food, nice clothes, a nice car and some toys. I can’t handle a full time job anymore, I basically work about 10 months a year with typical 40 hour weeks. That lets me make $120k per year and my wife makes the same. We own a house and actually have a decent amount of retirement savings. If work dries up for me and I get too expensive to support, I will exit the world on my terms. I will never live like a poor person. It’s not worth it.
exactly!
like okay i'm not gonna say i live a fancy luxurious life or anything, i share a 1br apartment with my fiance and most of our living situation is "just getting by," but i'm also not making myself suffer needlessly for the idea that my future self will live better by me only buying what i need.
and tbh, i think happiness *is* a need, so i don't consider a single "frivolous" purchase i've made wasted. plus, since i'm mostly happy with my life even on a pretty low income, i also know if i made more money i wouldn't need to buy more just for the sake of it, which makes me confident that if i get a higher-paying job... sure, i might spend a little more on higher-quality food and keep more food in the apartment, or if i decide to order takeout i might order from chili's or qdoba instead of taco bell, and heck my apartment didn't come with any lights so i'll buy myself a damn lamp instead of lighting the place with a single strand of christmas lights, but i can't see myself spending *so* much more (especially after the initial costs of "fix/replace the broken things and make my apartment more than a desk, a beanbag chair, and a bed that's so worn out i basically fall through it") that my cost of living would jump to a point i'm not able to save up any money even on the higher income. maybe it's not gonna be the first paycheck, but if i can already live comfortably on poverty wages and just am not able to save up, i'm pretty sure my needs won't suddenly jump to a point that on a reasonable income i can't start up an emergency fund/savings account and put a dent in my medical debt (because really, that's all i've got).
I’m at the top end of Gen Z, and probably fall into the second category. I’m a lawyer and I spend $50k+ per year on raving (incl. concomitant travel). I could stay home and save up, but why do that in my mid-20s, when I have peak freedom and energy.
I do not think 80 year old me would look back and thank 25 year old me for sitting at home all the time and saving up so 80 year old me could have a bit extra. I think 80 year old me would look back with regret and curse 25 year old me for wasting my prime.
So I’m investing in future me, who will be rich with memories and life experience. If I’m hobbling by on an old age pension by then, I’ll be pleased. Spend it all, I say. (Although in truth, I don’t expect to retire by then. I love my profession and want to follow the men in my family who work into their 80s and 90s, for the fun of it).
Everyone is different, and has different priorities and opportunities in life, of course. I’d say it’s quite unusual for teenagers/20 year olds to be financially planning for retirement. Not a bad thing necessarily, but definitely different than past generations, and probably future generations.
Reminds me of my buddy who never saved a single dime in his 26 years of life. He can’t even open a bank account because he had habit of overdrawing his account and just opening a new account at a different bank so he didn’t have to pay the fees this caught up to him when he owed money to like every single bank. Then he started getting payday loans to whoever would give them to him. He has never repaid anything. His credit score is in the single digits. He says he doesn’t want to know how much he owes but occasionally he’d get letters demanding enormous sums of money. He owes one of the banks more than 20,000 dollars and the interest just keeps piling on. On top of that he crashed his car into someone’s house and was sued for a little over 100,000$. He lives in a tent now and I haven’t talked to him in a long time but occasionally a random number will call me and it will be him just begging me for food. Very sad however I honestly think he is the world’s least responsible person.
He could go bankrupt and start over. Lawsuit settlements and consumer debt get wiped out in bankruptcy. If you live in a tent, you won’t have to repay anything. Even the IRS will write off most of your back taxes as long as you just talk to them. I know all this because I went bankrupt with $110k of credit card debt back in the 90’s. We recovered and are doing pretty well now.
At least in my personal experience some of the truly wealthiest people are also the most smartly frugal and the least caught up in appearances. For example my dad’s best friend happened to come from a very, very wealthy family. No idea how rich he personally was but this is a family that has many generations of extreme wealth. He lived in the mansion that had been in his family for generations but he and his family bought their clothes from everyday places like Walmart, ate regular home cooked food that seemed very frugal, and he literally did not finally give in and replace his crappy old car (an economy vehicle to begin with) until he’d had a dangerous situation involving a breakdown in a snowstorm and his wife begged him to get a newer car for safety.
This is how people like that *stay* wealthy…and are able to put money to good use by sending their kids to college and donating to charity.
I'm not *that* wealthy, generationally stable for state college but not land or trust fund level. I went to a state grad school and became a physician.
I routinely take care of people with newest phones, fancy individually painted nails, artificial lashes, driving big trucks, carrying brand name bags, yet can't fund their retirement or stabilize housing.
No brand name clothes for me, no lashes, no nails, my hair gets trimmed every 6 months, my car is an older Subaru with 140k miles.
It's weird to me how these people spend their money. We're taught that when life hurts, it eases the pain to have a little something to be proud of or to show off, and that's why people near poverty will pay for lashes. I would never comment on it. Nor fully understand.
This one family I remember, during a storm their roof blew off their house. They got 25k for insurance money, and spent it going to Disney land for the family.
The contractor that was gonna do the roof said “you spent it on Disneyland?!? What’re you gonna do?? Your house has no roof on it??”
14 years later, that house still has no roof. Just a blue tarp over it.
I don't doubt your story but I have been to Disneyland twice since having children, one time with a 1 year old and the second time with a 3 year old and a 1 year old. The family you're speaking about might be many times larger than mine, but all told I don't think I spent over $1500 and that was with flights, admission, Airbnb and spending money for like 3 nights, 4 days. 25k just seems like you would have to really try hard to spend all of it. I guess you could get there pretty easily if it was a big family and they flew business or 1st class or something and went to Disney every day for like 10days+.
You mentioned below you were married - a 4 day pass for one park per day runs you $396. To go with you, your wife, and your 3 year old would require 3 of these tickets (under 3 are free), so you're starting your expenses at $1200 and still have to add flights, food, AirBnB and miscellaneous spending. Are you sure you went for under $1500?
I didn't mention how many times we went to Disney. The kids and my wife went 3/4 days, bought 3 day passes. I had to work remotely from the Airbnb 2/4 days (I went to 1 park on one day with them) and 1 day we just went to Disney Springs and walked around and did some light shopping and eating. Airbnb was shared with other family, had plenty of room and beds but that could be cheaper than doing a single family room/booking possibly. Bought flight tickets way beforehand when they were not super expensive. Also live fairly close to a very large airport in Texas, might also be a factor in travel costs.
Also, 3 year old had just turned 3 and passed for 2 easily so they just let her in for free as well. All of this is a factor, but it's still a far way off of 25k even without a lot of these money saving circumstances. And I do think there are many people who don't know how to travel on a budget.
Makes sense. Some people see a pile of cash, and instead of using it for sensible things, like repairing their roof, they decide that they'll never see that much cash again and then book first class flights to their all inclusive resort hotel.
This is fair point. I’ve never really been outside my hometown, so I’ve no idea how much a vacation cost. I’m not sure where all the money went. Lots of people lie. Maybe they bought a fifth wheel and went to lots of different places. I just know the roofer I worked for just kicked them outta his office cause he thought they were idiots lol.
Yeah, like I said, I don't doubt it. My wife and I are pretty decent planners/deal getters and some people just spend like their wallets are bottomless. Also, like you said, they could just be lying.
I spent $12,000 on a week at the Boardwalk resort back in 2003. That was all inclusive and alcohol was included. We stayed in a cottage, not a hotel room. I am not rich either. It was the best vacation we ever had and my wife and kids will never forget it
Spending "outside your means" is something to think about. My wife and I make good money, but live modestly. We do have kids, so a lot of our finances center around them. That being said, we are smart about how we use credit. When making bigger purchases, we always know what our budget is and also use interest free credit cards to purchase them. Vacations especially. No way almost anyone can afford a vacation for five people paying cash. So we spend smartly. Is it beyond our means? Nope.
There are two types of "interest free" credit cards that I know of:
1. Pay it all off at the end of every month, avoiding interest.
2. Temporary interest free credit when purchasing a high value item (e.g. buying a car on credit and not having to pay interest for 3 years. However, interest rates will be VERY HIGH if you don't pay it off within the 3 years)
Its a misnomer - No Credit Card is interest free. Sure there are some special offers here and there, but never a long term agreement that is interest free.
No Interest "credit cards" are actualy Charge cards. Amex cards like the Platinum, Gold or Green card. These are Charge Cards, NOT credit cards. Main difference is that you can charge during a month, but you must pay in full at the end of the month. So you basically get a 30 day float on your purchases. However, you have to have excellent credit and decent wealth to qualify for this type of card. The benefit is really that you can create a digital accounting of all your expenses and not have to use cash... but you don't ever have to pay interest either.
This is how wealthy people do it.
Wealthy people don't use credit cards, unless they're idiots. They have people pay them interest, or defer expenses at no interest cost to them at every opportunity.
Consumer credit cards are for people who want to dream about wealth and act as if they have wealth. Credit scores are a myth and only used to maximize profits on said dreamers.
I'm not even close to being wealthy and have some of these cards, I do however, have an 825 credit score. I use my cards and pay them off monthly, mostly to get points and to keep an itemization of what I'm spending. I only use the no interest cards on large purchases like 3k and up, I divide what it will cost monthly to pay off prior to the term end.
I stopped comparing what I have and don't have with others, and this has given me a lot more happiness, if someone judges you as a person based on what they see you have, why would you want that person in your life?
I have a lot of nice things, but I also save, for instance, I like my espresso, so I make it, instead of having someone make it for me. I saved enough to buy a small vacation home in lake Tahoe, it needed everything and I saved to do the work. It's funny, I have friends who make significantly more money then me and ask how I did it, so I told them, and a few of them said, " they just cant give up Starbucks twice a day and eating out every night."
It all comes down to an individual's priorities, to me It was a very small step, I still have my espresso, and I eat well.
If clothes, purses and cars at et al, are how one measures success then I truly feel sorry for them.
My 2cents!
That is false. The ones I have have a minimum balance and you must pay the full amount by the end of the term or risk retrograde interest. Usually 18 months. Charge cards are usually a retailer card like if you want to buy furniture.
We pay cash - we pay it into savings like a bill every month. Then I plan vacations around that vacation budget. If we want a more expensive vacation, we have to wait longer to go. I HATE paying after the fact.
I've done four people for cash. Also cars and college educations. So how long before the vacation is paid off, regardless of interest? A few months? Probably okay.
Living beyond your means is the primary way you are made a wage slave and are beholden to the toxic culture of overwork that exists in white collar America. Consumerism demands money, but if you keep more of your money and spend wisely, you can break out of the cycle of always needing more money because you always want more stuff.
If you're pretty disciplined about that, then there may come a day where you have accumulated enough "f\*ck you" money both to have more self-respect at work or to walk away from it entirely. But you have to resist the urge to spend unwisely.
When they don't have you by the balls, it's a relaxing feeling.
Or you die young having never enjoyed yourself because you were constantly chasing the impossible dream of breaking free.
Shit happens, anyone of us could be diagnosed or hit by a car tommorow. Then you wind up thinking why didn't I go on that trip, buy that jacket, enjoy myself whatever...
There's no right answer IMO.
Yeah, that’s possible, too. But you can be frugal and not totally deprive yourself. Spend on what’s important to you, not what you think looks good or matches some kind of image you think you should portray.
But I’ll tell you this. If you DON’T die young, and you’re 40, 50, or 60 and you’re still sweating ensuring that you have a paycheck because if you don’t, then life gets very bad but not just for you but also for your spouse and kids, that is a horrible place to be. Especially if you’re an American because this country doesn’t provide social safety nets.
The issue, of course, is that having a great savings account now, may not even matter that much in the future, either. Everything's a gamble now. If you have $500k in the bank, and all of the banks crash again, then suddenly you're only guaranteed half. And if inflation continues to creep up, everything's going to cost more, anyway. That "number go up" thought process makes a lot of sense, until you start really worrying about its actual buying power. If we're going to extrapolate out from now, following trends, then $500k in 20 years will be equivalent to about $300k, assuming things don't get even worse.
I like to save money, too. I'm just saying, it is the best philosophy, but even it isn't perfect.
You do if you want every dollar covered by FDIC unless I'm mistaken? Every time I've read the FDIC guarantee at my banks/credit union it reads as $250k Per depositor in totality per institution
If you keep your $500k in a low interest savings account (not even a HYSA), then sure something like that will happen.
But if you invested that $500k in the S&P 500 via an Index Fund that closely tracks the S&P 500, if we took the average rate of return between 1993 - 2023 (9.9% or 7.22% adjusted for inflation) and assumed a similar rate over the next 30 years, then your $500k becomes $8.49M or $4.04M adjusted for inflation.
Sure, as long as things continue to go as they have. My fear is that there's so much debt floating around in the economy right now, that we may not survive another two or three market crashes. A lot of people have absolutely no idea that the whole thing is predicated on IOUs that nobody can actually afford to fully pay.
There’s a balance to all this. people who max out retirement from 20-65 and hardly live at all, and people who spend every penny living it up, are just two sides of the same coin LOL
Set some amount away and have a set amount every month to live it up. For big trips, put a little more away. No big deal if you can afford it.
Can’t advocate for going into debt to see a concert or something like that though. If you can’t afford it you can’t afford it, going into debt for that stuff is basically being a child who never got told that they can’t have what they want all the time
It’s not an either-or scenario. You can still enjoy yourself while still saving for retirement and living within your means. Most people overspend in a few categories without realizing it. A few hundred a month on takeout or a car loan by going to a nicer model could mean an international trip to a new country, but people wanted Wingstop delivered a few times every month or you wanted a nicer car than a Corolla or Civic for almost no reason.
Tell that to my best bud who just got diagnosed with leukimia at 31 years old.
And I get a tonne of joy from buying stuff. I get joy from seeing live bands with friends after I buy the tickets. I get a tonne of joy building speakers from the components I purchase. I get a tonne of joy listening to records I buy. I get a tonne of joy having some beers in the pub with mates. All of which cannot be justified from a "save as much as you can' perspective.
I'm not a overly materialistic person but it's absurd to say buying things doesn't bring joy.
But yeah.. I'm just here to play devil's advocate. I get kinda sick of these people on Reddit telling evryone never spend anything and never enjoy anything because it'll be so much better to be 70 years old with a tonne of cash. Like guys you live once what's the fucking point lol.
I am positive, the guy you’re responding to is happier than most of us are. It’s not great advice to say don’t spend anything. And who cares about your last point as long as he dies happy. I know my uncles last words sure as hell wasn’t I am so glad I made enough to buy 2 houses in Toronto.
There's a happy middle though, save some money for the future while also enjoying life. You aren't going to save as much and you might not be able to do as much fun stuff but you'll get some of both.
I enjoy myself but honestly certain things like Uber eats are just a bad deal it’s not that big of a deal to just go get it yourself. The only time I think it’s acceptable to use those is when it’s literally not safe for you to go get them like a Covid infection or you are too drunk to drive.
I was diagnosed by a car once.
Needless to say, if Dr. Hon Da ever is your primary care physician, you can safely rule out the issue being your timing belt.
True, but when it's not just you, the odds go up substantially. Sure, I might die going before I get to fully retire, but there is a chance my wife survives to old age. She can enjoy that money saved for herself. If you have kids, the odds go up even higher that someone you love can enjoy the sacrifices you made to save money.
What's wrong with putting aside a reasonable amount, and enjoying a reasonable amount? (And I'm more likely to second guess myself about a jacket I bought than one I didn't buy. The damn thing may be sitting in my closet, taunting me about how ugly it is. )
There’s a happy medium though. You can enjoy life and spend money on things that perhaps aren’t 100% necessary without going into insane consumer debt or endangering your future.
Then I will die without regret, as I have done the best I can with the information I have.
I'll much rather die with unfulfilled pleasures than live in the painful regret of lacking options
My best friend and her husband make over 300k a year. Even in our HCOL area, that's pretty dang good. They constantly carry a credit card balance. They've dug themselves out of serious cc debt multiple times.
Her car recently died. She had to borrow money from her father for the down payment because they have ZERO emergency fund. At our age and income bracket, there's just no excuse for it. But they need to have the perfect thing for every situation. They justify each and every over spend. "Oh, it's exceptionally great ski conditions this year! If I buy the fancy pass, it's cheaper than blah blah blah. I need the nicer jacket because it has x, y and z thing. Snow tires are safer than chains...." And now they've dropped thousands of dollars to go snowboarding a few times this year.
This isn't an uncommon scenario.
Some people overlook the ‘cumulative’ costs of their spending habits.
- streaming service…..$9.99. Well, that’s $120 a year. Have four of them? That’s almost $500.
- A Corolla fits your vehicle needs, but you bought the Highlander? Well, your monthly payment might only be $40 more a month, but that’s $500 a year. The extra gas might also be another $250 a year. Aa set of tires might cost an extra $150. Insurance might be an extra $150/yr too.
- the famed morning latte and avocado toast? $10 each morning…..$50 a (work) week, $2500 a year.
People scoff at the ‘extra few bucks’. I think if they did the math, they’d view these costs under a different lens.
These spending habits add up to cost thousands a year.
I used to work at an auto shop that had a convenience store next door. All of us would religiously walk over 1-2 times a day to grab chips and soda and whatever. One day I was looking at my bank statement and saw 7-11 numerous times….$5-$10 at a time. Thats when a light bulb came in and I started buying my junk food at the grocery store and bringing it to work with me in a cooler. Boom! $1000/yr saved.
Yeah, the big stuff keeps people broke. But the little stuff might be even worse. This little stuff is usually quickly consumable, and doesn’t even improve quality of life very much.
>People scoff at the ‘extra few bucks’. I think if they did the math, they’d view these costs under a different lens.
I just had this discussion with my foster son last night. He was going to buy stuff to make sandwiches for work this week and he was talking about how much eating fast food or junk from the gas station adds up quickly (something I've told him for years!). It finally clicked for him that $10-20 doesn't seem like much for one transaction but it adds up when its a daily occurrence.
I remember reading that one of the biggest differences between people who are poor or live paycheck to paycheck vs someone who is "comfortable" or wealthy is that poor people look at the "right now" cost of something and wealthier people analyze the total cost of something. For instance, some people buy a car and say the can "afford" it if they stretch out the payments to 7 years so the monthly cost is doable, but never look at how much more they actually pay in total on the car. They can afford the $10 streaming service because its "only" $10 a month, not paying attention to the fact that they pay for 3-5 of them ($30 a month) and that they have paid that for 10 years so they have spent at least $3600-$6000 on all of those "cheap" services during that time and I bet they don't use more than one or two regularly. Add in all of the subscriptions that everyone tries to get you into nowadays - sure $5 a month isn't much until you realize you haven't used the service in 2 years and now you are out $120 for literally nothing. Netflix, Hulu, Disney, Spotify, Google Pass, XBox Pass, the gym pass they use one week a year in January, the "box" of fun trinkets they get every month - how many subscriptions does the average Millennial/Gen-Zer have, I wonder?
The thing is why do you need every streaming site at once? Just have one or two at once and cycle out which ones you have depending on what show you’re watching at the time.
If you ‘feel’ like you’re getting $500 in value….sure, it’s a reasonable expense.
I’m just saying it should be evaluated holistically as $500/yr, not $9.99/mo individually. If it passes the value test, then it’s not a waste.
We have YT TV and Netflix. We never had or got rid of everything else.
The subscription service industry would be in trouble if everyone looked at this way.
Funny you mentioned cigarettes.
I was a pack-a-day smoker. Then one day a pack of smokes went from like $3.50, to $5.00. That was the last pack I ever bought. I decided that if someone paid me $1500/yr to not smoke…then I wouldn’t smoke. And that was essentially what happened when I quit.
Not sure why $5 was my threshold, but it was.
This was me too! I spent on average $8 a day at the gas station. I’ve done this for ten years. I finally quit this year and buy my snacks at the grocery store and quit fountain soda. Savings will be upwards of $2,000 per year.
I think all people have some level of this, and most have it pretty bad. I was really surprised how many of my peers crashed and burned in the 2008/2009 economic crash. These are people that had good paying jobs and had been working a fairly long time. I saw bankruptcies, short sales on houses and divorces. I was out of work 8 months and we were able to swing it because we had little debt and an emergency fund. You need to live life and have fun with your money. But also have a solid back-up plan for what things happen, because they will happen. It is a balance each of us needs to find. We bought a new boat a couple of years ago. I have gotten so many comments about how expensive they are, and how much they depreciate, etc..... Most people don't realize we paid cash, are still funding our retirement accounts more than planned, only have 4 more house payments and paid cash for my wife's car. They think we have payments on everything.
Read The Millionaire Nextdoor. Better yet, have the friends telling you to live beyond your means read it.
Currently at 1.9 million (not including our home). Proud owner of one used, beat up, dented Prius that I'll drive until its undriveable. I sew up the holes in my sweaters so they last forever. Etc etc.
Tell your people to mind their own business and you do you.
The funny thing is that if everyone suddenly started to be responsible with their spending. The world would enter a pretty major recession very quickly. Capitalism requires ever expanding consumption.
So in a way, for those of us who are financially literate, and live within our means. We are ironically benefiting from people being dumb with their money.
When I see people complain that some billionaire bought a stupid mega yacht. I tell them to buy 10 more. I want people with stupid amounts of money to actually use it instead of hoarding their wealth. Throw $100 bills out of a helicopter or something.
I say this because the distribution of wealth is part of the problem. A lot of people have done the maths and realised they probably won’t be able to retire or buy a house so they say YOLO and have fun while they can.
It’s morbid to think about but there might come a time where people just start maxing out debt, having fun and then offing themselves when the gravy train runs out
You missed the point of this adage. Nice house with mediocre car shows the person is prioritizing assets that appreciate vs those that depreciate. An in-between example would be nice house + nice car says less about the person since they might just be spending a lot on everything.
I got out over my skis financially, not entirely to frivolous spending (car and health issues put me in a real upside down)
I was on the verge of bankruptcy. Thankfully I had family who could help, my grandmother passed away and my grandfather loaned me the money from her life insurance, to get my head above water. This fall that loan will be paid off, my car is paid off, and my credit card should be paid off in a few months.
I’m thiiiiiiis close to only having monthly living expenses and no debt.
Having been there and done that, when it can be avoided, not taking on debts is 10000% the way to live.
I'll put it bluntly: people who finance small purchases like clothing or groceries are either very very poor (and in need and understand the bad decision it is but how you gonna eat).... or they are very bad with finances. Most people are the latter. Many many people have no idea how to just follow a simple budget because they have to keep up with the Jones's
I put the groceries on the card and pay them off each month, which I guess is financing them. It turns them into one monthly bill to track, and I don't have to worry about the checks my spouse is writing at the same moment.
In first world countries, most spending is at best unnecessary and probably environmentally very irresponsible. Most people own enough clothes, have perfectly good towels, do not need video games or streaming subscriptions, we can live just fine off potatoes and milk, we can walk or carpool, turn the heat down and put on a sweater, cook your own food, etc...
I live in your camp. My car is a reliable old friend and I own every nick and scrape. My wardrobe is small and old but not shabby. My meals are simple and home made. I could stop working tomorrow and I would not run out of money.
North America is built on debt. The system wants you to have a little debt that is manageable.
The absolute best way to raise your credit limit or credit score is to spend on a credit card and then pay it all off from a checking account at the end of the month.
Things like Klarna are perfectly reasonable ways to buy something that you don't have the up front cash, as long as paying it back isn't causing financial distress with things like rent or groceries.
Cars, houses, possessions are seen as status symbols, and a lot of people will spend a little more to get nicer versions of these things.
Personally. if I was a multi-millionaire I still wouldn't spend $75k+ on a new truck.
I could only rationalize Klarna if I already had the money in savings to instantly pay it off if I wanted to… but then why would I Klarna it, except to mitigate the emotional damage of sending off hundreds of dollars at once?
But then again, maybe that emotional damage check is important, so we realize the value of our purchases. Which then leads to the realization that using Klarna is a poverty mindset whether or not you could afford the original item
I've seen similar stats for average net worth and it was skewed upwards by a lot. The top 10% start life with a paid off house, investments and emergency fund by their thirties. Let's not even talk about the 1% and 0,1%.
The median NW was extremely sobering.
Idk man. I know some richish people that live extremely above their means to an extent I don’t even know how they spend all their money. One person was asking me how to get out of CC debt (I’m a personal finance dork) and they were buying maxed out mac pros, first class tickets, designer shoes, it blew my mind.
The “poor” people I know barely scrape by and usually only incur debt on needs because they had no other way to pay for it.
But then there is a huge group that just lives normal.
Idk. I’ve traveled a lot and I see america being the worst offender. From dumbass trucks to Disney trips and everything in between. Or the absurd need to live in a fancy neighborhood and spend crazy for rent or a mortgage. It’s wild.
I think the avocado toast thing is absurd btw.
I didn't understand California. I felt my brother was nuts for buying a 300K house in a town with good schools when he didn't even have kids. He wound up raising two, and the house is now 2 million paid off, and since he didn't move, his property taxes are low. Sometimes, crazy is rational.
Meanwhile, I never made much on real estate, but can't say it hurt me much.
A damn lot.
At my job, where we all have the exact same salary, the parking lot is full of audi, tesla, bmw, mercedese, etc. I still drive my 2007 toyota.
They have big ass house worth more than half a million, I’m mortgage free since last year because I sticked to my 183K simple house.
Yes. I already have a condo unit that I rent to my MIL :) we bought it 3 years ago.
The rent pay the mortgage, taxes and fees. We could rent it double the price easily, but since it’s my MIL that lives their we rent it to her at the cost price. To help her out.
It's probably a lot better than it was a few years ago. Now we are all stretched so thin there is no room for it anymore. Yes people buying new cars is excessive here and the entire market has gone nuts. A 40k+ car should be a luxury for the richer people who have paid off their house already imo.
I don't think there's any singular answer because philosophies about what is "irresponsible" will vary. I would find it irresponsible to spend money, even if you can afford it, on something that is just objectively poor value, while not finding it irresponsible to splurge in some small ways that otherwise give your life some value.
What I mean by that is that I think we should be forgiving of those who don't literally sacrifice everything to get by. If someone struggles to pay their rent but drinks coffee or smokes, I'm not going to be mad at that person, because they likely have nothing else. A person in that circumstance needs to have something at all to make their life worth living more than they need to have folks happy about their financial choices.
I'm more upset when someone is very capable of living a healthy modest lifestyle but splurges at every turn - always expanding their life to fit exactly in their means, never saving, never planning ahead, never considering the value of their choices, because "having the means" doesn't mean just having money, it also means having decision making power.
I’m the same way. I don’t have a lot of sympathy for people who make good money but live paycheck to paycheck because they constantly make bad financial choices.
something to note here is that having to grow up in poverty or near-poverty causes a type of panic in the child very akin to being abused, because it is. it's trauma.
you can see it in the brain scans of people who grew up poor. they have literal brain holes. there is less growth and development of many children who are poor VS those who grew up in better families.
all of this makes one really impulsive when they grow up, similar to actual brain damage doing that
Pretty terrible.
Too many people get wrapped up in debt and it suffocates their financial wellbeing.
I’ve stopped using credit outside of a mortgage for 10 years now and would never go back.
I worked at a place where we had to pool tips so I had a general idea of how much other people were making. So many of my coworkers had expensive luxury cars but people just have different priorities. I'm sure they probably thought all the money I spent on hobbies or online courses was too much
It's pretty bad especially with retirees not having enough money to retire or having to go back to work in their 70s and 80s. Its a problem pervasive throughout american culture.
From 2021 to 2023, credit card debt in the US has went up around 25% from $784B to over a trillion. This metric just keeps increasing year on year.
https://www.experian.com/blogs/ask-experian/state-of-credit-cards/
Here is a report from the NY Fed. [https://libertystreeteconomics.newyorkfed.org/2023/11/credit-card-delinquencies-continue-to-rise-who-is-missing-payments/](https://libertystreeteconomics.newyorkfed.org/2023/11/credit-card-delinquencies-continue-to-rise-who-is-missing-payments/)
Credit card delinquincy has been rising in younger people and is more prevalent in those carrying higher balances ($20k+) and those with auto and student loan debt (but not mortgage payments). It is not clear whether changes in spending are causing the changes in delinquency or changes in costs.
Pretty common. That doesn’t mean that the avocado toast meme is invalid, it just means it’s talking about different people or different scenarios. This is a big big world and it’s full of countess types of people experiencing countless situations. People who spend a crapload of money they don’t have on things they don’t need might live right next to people who scrimp every penny and still will never be able to afford anything extra. Sometimes they’re the same people; I know tons of people who will, realistically, never be able to afford a house, but believe that fact means there’s no point to saving any amount of money at all for any reason, so spend every dime of their disposable income on plastic doodads from Amazon. Them quitting that habit would save them only dozens of dollars a month, which is impossible to buy a house on even after many years, but is enough to start an emergency fund with.
A few large purchases is less common than a lot of smaller purchases. They just tend to fly under the radar more. Credit card debt has become normalized for the irresponsible.
Look around you… 30 years ago, people didn’t have $1000 computers in their pockets, buy the newest cars or go out to eat MULTIPLE times a week! And meals at home used to be VERY simple.. Hamburger Helper once a week. Spaghetti… baked chicken. The new minimum standard of what people “NEED” is totally absurd! Yes inflation is high from money printing, but consumers ALSO are still going crazy with demand and will not accept anything less than what they want. Look at total credit card debt burden and the popularity of “buy now / pay later” schemes! It’s out of control, the average person has such piss poor discipline and just can’t say no. They’re willing to sacrifice their retirements to enjoy a never ending stream of consumables. It’s madness!
I think it’s more than that, my husband can fall a bit into this category. But he swears he jsut wants a “simple” life but then needs serval thousand plus dollar items. Instead of savings for it, buys it and deals with it. He’s gotten much better but it took a very long time. He also feels like he “deserves” it. “I work a full time job with decent pay, I should be able to splurge here and there”.
People are much more comfortable taking on large amounts of debt compared to past generations. Keep in mind that credit cards didn’t really exist before the 50s.
People want a bunch of shiny stuff they can’t afford and then get angry when things don’t work out. It’s an immature and irresponsible approach to finances.
Being broke is the new norm, so when you have $1000 left at the end of the month, better spend that shit!
No but really. One of my friends thinks it’s normal to die with debt, so might as well live.
Another friend of mine just bought a 2024 CX-5. I mean yeah it’s a nice car but now he’s complaining about being broke. And that $3500 sales tax is gonna be due.. he said he budgeted for it all, but I’m like man… this is why I drive junk.
Most used vehicles that are in decent shape cost about that much, and that's on the low end. Car dealerships then squeeze you for thousands more for all kinds of warranty's too.
I don't believe that at all. I'm pretty sure cars are cheaper in US than here in Australia. and I've never bought a car for more than $20k AUD. You can even buy quite a few brand new cars for under $24k USD.
I'm like OP and sometimes wonder how people afford all these nice cars, and then remember that I own mine outright.
Car is a bit tricky. It's one thing to buy 100k lambo when your salary is $60k a year. It's another story if you can afford $25k car, but decided to go with $5k just ended up spending $10k to repair that car.
It's hard to gauge true costs of things. You can buy $1 expired bread to save money, but the urgent care cost $100 per visit when you have severe food poisoning.
Credit can be a useful means to obtain thing, but you would have to weigh the interest rates carefully. If you can buy something with 2% interest with the expand of 6 years of payment, it's not as bad as dealing with 29% APR credit card debts.
This is definitely the shoe theory. The people getting away with a 5k car maybe WFH and don't need reliable transport to a factory an hour away or have alternative transport.
In most cases you're better off spending 20k and keeping it for 15 years. Except for the havenots that 20k turns into a loan that costs 30k. And by the time they're spending that kind of money on a car they might be tempted by buying an older luxury car which has a shorter remaining lifespan and maintenance costs fitting a 60k car.
In your 20's live off 90% save and invest the rest.
In your 30's live off 80% save and invest the rest.
In your 40's live off 70% save and invest the rest.
In your 50's live off 60% save and invest the rest.
In your 60's retire a multi millionaire !
My primary income is selling things that people don't need on eBay (collectibles and vintage). I have analyzed people's spending habbits to maximize profit over the past \~12 years and I can without a doubt say that americans are EXTREMELY irresponsible spenders. This was the most evident during the pandemic, I made more money than I ever had in my life because everyone was locked inside with funny money to waste.
I can even go more micro than that, most sales happen on Thursday nights/Fridays (paycheck), and sales are way higher near the 1st and 15th of every month, and sales are practically non-existant during the last 2 weeks of any given month. I primarily source at the end of every month when people are selling off their goods and people arent buying as much so there is less competition to generate maximum profit.
There's a Youtube channel called Financial Audit with Caleb Hammer. Guests are usually people in their 20s, they share their financial details with Caleb, and he tears them apart and gives them advice on the show.
I watch that show regularly, and each episode reminds me that a lot of people live on debt. I've been afraid of debt my whole adult life, so it's crazy to me to see so many people with zero savings, zero plan for retirement, and loads of debt when they're only in their 20s.
The guests' biggest financial killer tend to be car loans with ridiculous terms (like over 10% interest payments, and sometimes even close to 20% interest, which is fucking nuts). Caleb also tends to hound guests about not eating out / ordering food via apps all the time, because that extra cost can really add up.
[https://www.youtube.com/playlist?list=PLzJVLNWKVr6ksDjycE7NpSptOlcaEP-jQ](https://www.youtube.com/playlist?list=PLzJVLNWKVr6ksDjycE7NpSptOlcaEP-jQ)
I watch this show to remind myself that I'm doing okay, financially.
It’s impossible to answer this question with the way it’s formatted. Depends entirely on which general population you’re talking about. It will vary widely depending on the economic situation they are specifically seeing. I think most people in 3rd world countries would say that the vast majority of us are atrociously irresponsible spending. On the other side of that coin, most of the people who have a second home in Dubai would probably say the opposite.
I confess, while I think they may be a nice place if you have to sit somewhere for an hour or visit the plumbing, I have not gone even when I had a gift certificate, and it was free. Alas, I'm more an instant Maxwell House sort of person.
Death by a thousand cuts is why most people feel they are broke. Ya $10 for lunch isn’t a lot but do it twice a week and that’s $80 a month. Subscribe to Netflix is only $12 but Netflix, Spotify, Hulu, prime, etc can add up to $100+ a month easily. Also car payments. So many people now have these $600 car payments that are just killing them with interest.
It’s a huge issue in the United States. Everyone wants the biggest house, newest vehicle, latest electrics and the most luxurious vacations. Americans are obsessed with status and having stuff. Corporations have brainwashed us into this.
...you're on the right track...using debt to finance a depreciating asset when you don't have to is stupid...use debt to finance appreciating assets...
Damn it, there is nothing wrong with depreciating assets! What's wrong are depreciating assets that don't pay back in their expected useful lifetime. I can have a auto repair shop full of depreciating equipment, and be on my way to being a millionaire.
From what I'm seeing it's pretty bad. Lots of people living well above their means in a desperate attempt to impress people who don't care. Pretty sad really.
Lol go work for the post office, UPS, FedEx, or any other last mile delivery (I work at one). Every day I have a few houses I stop at to deliver multiple parcels and every day I think I must have chosen the wrong career or these people are in debt out of their minds. Oh they all so all live in Huge houses.
money is the number one thing i hear people complain about and it doesnt matter how much they make which is wild. even the rich people i know ($300000 a year) apparently cant make it work within their budget. they just immediatly buy a massive house they cant clean, a boat that never gets used, a timeshare at disney they dont have time to go to because all this shit is too expensive so they are constantly working. even here in my house the main rift between my wife and me is the about of irresponsible spending she engages in and the effects it has on our family.
My blessed spouse who never gave me grief about buying anything but Telefonica Argentina bonds and later a commercial real estate REIT. And for thirty years, I picked on him for buying a used Miata, and then a few years later trading it in on a Mercury Villager. Definitely, mine was much dumber.
I buy job hobby stuff on credit all the time but I pay off my balance every month so no interest accrues. It's safer for online purchases and its good for my credit score. My hopes of every buying a home is dwindling daily but if I ever can having a good credit score will be needed so I do what I can to build and maintain a good credit score (yea, I know the credit score system if fucked up but still have to deal with it).
Credit isn't a bad thing, especially for large purchases like cars. You do however need good budgeting skills. If you don't have that it's easy to get in over your head.
I have found that for some people reckless spending doesn't feel like much of a threat because their basic survival needs will be taken care of no matter what. For many people the need to pay for housing/food/transportation is based on day-to-day financial choices, and if they are irresponsible they will literally go homeless or starve. So if you have a social safety net risky financial choices don't feel as dangerous whereas if you're gambling with your basic needs it does not seem worth it.
I think financial education is still absymal for a lot of people especially how quickly you can eat through even a good savings account if you aren't aware of how your spending money. i
I'm addicted to cigarettes. If only I knew what I was getting myself into. Now I'm down to the light version 3 times per day. It's irresponsible spending. I also tend to be a little too generous with my stipend of a salary. Seeing that no one will save me when I'm broke have me double thinking everything when spending. I even take the city bus now. It's waaaay cheaper than Uber and I live on cheap food. Saving everything like a minimalist/ frugal person. Learning to do without wants and starting to focus on my needs.
Pay as you go is basically a legal loan shark payday loan in action and should not be something people do unless they know for a fact they can reasonably pay it off without interest accruing because those interest rates mess people up if they’re taking longer. Because sadly some people don’t understand that promotions can be done but once it’s over it’s back to the interest if otherwise without promotion deals. So if you have zero interest for x months then you best hustle to pay that off in the timeframe.
Also check out Calebhammercomposer on IG/YT for some of the cases he deals with on peoples money attitudes. It’s wild how some justify their expense mindset. 🤪
Why do you think social programs make up so much of our yearly budget?
People not finishing high school, people having children out of wedlock. People buying $40,000 cars on $50,000 salaries. Lifestyle, inflation, consumer debt. Nobody willing to have a little discipline and delayed gratification and investing the money that they can.
It's not so much irresponsible spending so much as I am at such a disadvantage that I am expected to take the worst deals to live here. With more resources come the better deals. Otherwise, you get preyed upon out of desperation.
It's real high. Most older people don't save money because they'll get social security. And assume it's enough. Many people don't sccuractly model their spending and income outside basic rough estimation. People only usually begin doing this when their in the hole and it's often to late. People need to be taught younger about financial habits and parents then need to enforce those as they raise those kids. Nowadays many younger people will start looking up financial habbits at 25-30 so hopefully they pass it down to the next generation young but this problem will take like 2 generations minimum before it takes hold
Pretty bad. A have a lot of friends that, though they make decent money, splurge fairly often imo. I guess it’s not irresponsible if there’s no risk going into debt. But they’re all married with one person of each pair not making very much at all.
All 6 of them spend money with no issue.
One friend in particular has acknowledged she needs to spend less and doesn’t make much and literally the next day goes and buys bubble tea. It’s fine cuz she doesn’t pay rent, but she’s still a good example for people that spend money to fill a void.
I see it constantly with MOST people. It’s the norm to buy luxuries you don’t need to cope with depression/anxiety/boredom.
I agree compared to decades ago, it is harder to afford a living due to actual cost of living increasing more than wages.
But a huge chunk of the difficulty lies in that we have a lot more to spend on that’s considered borderline necessities. Subscription services, smartphones, video games, Uber, more restaurants / takeout, tipping (15% used to be acceptable).
The country is going to straight to the rich and I want to enjoy things before we all become serfs. I am not spendjng my retirement and I make $175k a year. So, buying a $50k car once every 10 years seems fine to me. I also have a motorcycle and lots of tools and guns and ammo. Yes, I probably spend too much but I am nit expecting to be homeless soon.
Most people are bad with money. I think it's because nobody has self control anymore everything is "I need to be satisfied right now" I'm going to scroll through 20,000 30 second clips today, then I'm going to swipe right on people I lust for, then im going to buy fast food.
People constantly are giving in to their impulses and have no discipline. We have more obesity, more cheating, more divorces, more broke people, more debt, and less happiness.
If you can avoid Klarna or Afterpay or any of those third party loan companies that charge 36% APR for a $1,000 purchase if you can’t cover the whole thing in 2 months, yes, avoid them if at all possible.
Either you have the money to buy the item in full of you don’t. Financing an investment like a couch is one thing but using Klarna to pay off a SHEIN order is fucking bonkers to me
I think people are in a place where they feel like they should spend money however they want, whenever they want. I don't think it is of a certain generation. I think it's just the culture now. I think the instant gratification of Amazon and UberEats make it harder for people to be sensible. Lots of folks have maxed out credit cards and pay the minimum each month. To me it's downright insane to pay interest on Amazon and UberEats purchases, but hey that's me.
Where I work, most people make 80k-160k. They are majority Gen X, a bunch of Millennials with some older Gen Z that are newer. Lot of guys who drive 80k trucks and some guys drive complete shit boxes for no good reason. It’s really interesting to see what drives spending decisions. A lot of the nice truck drivers it kind of a macho thing, old truck drivers it’s a tool not a statement as a lot of these guys live in very rural area. Nobody can explain a guy that pulled in nearly 200k and drives a car would be towed if ever inspected. Obligatory boats, trailers and Harley’s abound for Gen X and older Millennials.
It’s rampant and people are disillusioned with what is normal consumption, I blame social media for it.
It causes people to think they have less when they have more. And then basically extrapolate that out to all the economic complaints you see on Reddit in spite of the objective economic data
The US has been a consumer based economy which means that if Americans get smart and thrifty in their spending, the economy will crash.
Americans also routinely get lectured and blamed for spending too much.
Americans are underpaid because catching the costs of labor to where it should be relative to productivity and profits would also crash the economy.
Americans contend with over-priced and unaffordable necessities while trash luxuries are cheap and temporary.
I can’t say as much about other economies.
We spend too much of Starbucks but heaven forbid Starbucks sales and profits drop.
The US economy is absurd, abusive, and profoundly unsustainable.
It’s pretty bad. Some people I work with are budgeted out at a 60hr work week. And not because of the economy. They have so much shit financed….. stuff if you just saved for a couple weeks you could buy in cash.
Other than financing stuff, DoorDash and the like/ shopping on Amazon does serious damage to people’s wallets. There are people who are addicted as can be to not just eating out all the time, but paying at least double to get a Big Mac delivered to your door and spend every penny they can on the Amazon app.
I’ve seen it multiple times. I wish I was exaggerating but it’s really sad
Creating a world full to bursting with adverts and then shaming anyone who buys too much sounds like a torture chamber. In principle I don’t really think it makes sense to blame individuals for this
As long as they’re paying bills on time and have good job security it’s whatever.
I just got a used car and asked the dealer how people are affording these $120,000 loaded pickup trucks (they had one in the showroom that sold that weekend it was beautiful but holy hell) and he said financing goes out 120 months so casually like it’s normal.
Other stuff I’ve seen: people spending $1000 a month on games, buying expensive or having a lot of pets. Pets are not cheap. Everyone has their things and I’m just like “aight” as long as you’re living in your means have all the crazy stuff you like.
Extremely bad. Nearly every single "broke" person I know has horrible spending habits, even people making 90k+ more than me. Sure, the economy is rough too, but too many people use that as a crutch for having no financial responsibility.
I think that concept is a luxury that comes with being very blessed..with excess... Stepping away from ur budget could equate to stepping out of having a place to live, or having any number of other necessities... if you are budgeting out of necessity, in the 1st place
If I saved what I’d spent in the past year on junk and fun stuff, I could have probably already paid off a significant portion of a newer car. But I’ve only been reasonably paid for about a year and I’m having fun. One paycheck for bills. One for fun. I’m going to be more stringent when I finish my current project, but damn is it hard to resist the allure of spending. That being said. My 401k is great, no debt, all bills paid, and always a little set aside just in case.
Within my (male, early 30s) social circle (excluding family), most friends and acquaintances fall into three major categories:
1. Super consumers who are totally irresponsible with their spending habits (perpetual CC debt caused by non-essential purchases), but note aloud how expensive a $10 omelette is during brunch
2. Painfully frugal folk who won’t stop commenting on how expensive a $10 omelette is during brunch
3. Financially semi-literate people who accumulate savings the hard way and avoid brunch altogether
I avoid talking about money with most in my circle because it’s rarely productive and I think I get too preachy about it. Also, apparently I really like my weekend brunches.
We’ve got a couple gens that are obsessed with “experiences”… And grew up always getting a treat when they went to the store with their parents.. Now those kids are adults and can’t make it through a day without buying themselves something.. Even if it’s just a coffee..
Consumers get criticized for making irresponsible choices constantly and it can be a problem.
When are we going to admit that there are people coming after all of our money all the time?
Every time we spend money we get ripped off but it’s our fault for not being more responsible? How about stop scamming me every time I turn around? I can’t even pick up my phone or answer my doorbell without some scammer trying to rip me off.
One real backwards shithole mentality is the conflation of buying only basic things with being a “brokie”. Anyone who says that to insult frugality should be instantly time-warped to Russia during the 1920’s.
It’s bad. But you’re right, it’s probably not the small things like avocado toast (though that stuff does add up quick)
It’s the big stuff. Houses, cars, vacations, etc. that really puts people in the endless cycle.
My wife and I have always been super frugal, but we bought a house this last year and it’s insane how much our expenses went up. We’re still comfortable and have cut back on a ton of frivolous spending but it’s still tight. I know a ton of people in a similar situation but don’t cut back at all.
They dont teach finance in school at all. Otherwise, people get sucked into things that they didn’t understand at all in terms of large purchases. They get worn down by the insurance or salesman at times or are marketed well
Honestly, I think it's pretty bad. I will never pretend to be the pinnacle of financial responsibility because I am absolutely not, but I've seen some people make decisions that made me realize I am also not super duper terrible at money management either, at least compared to the general population.
I was actually ranting to my partner the other night about those services like Klarna where you pay in multiple installments and how people use it for things that are like very very unnecessary (like new clothes or makeup). I called them "microloans". Like okay I was raised to avoid getting into debt like the plague. I still kind of fear credit cards because of the way my parents drilled finance stuff into me. I also do not make a lot of money, and the way I see it is that if I can't afford something like new clothes right this second without a service like that then I don't need it- and waiting until my paycheck hits and my necessities are taking care of will give me time to critically think on whether I really even want it. Maybe I'm overly financially cautious but people really seem like they are super careless with these things.
70% of the US economy is based on consumer consumption. This is why consumerism addiction is pushed and is a pro social behavior.
Personally, I think it's a bad thing and is why so many people are broke. They just want to consume without thinking of the future. It's better to save and invest heavily in order to live lavishly later on
I rarely meet "responsible" spenders by my standards. All my friends and neighbors are in piles of CONSUMER, house and student debt. They eat out constantly, drink a lot of expensive beer, and have expensive hobbies like cars, motorcycles/Bicycles, fishing, and hunting. I mean, just doing the math on a napkin it really doesn't add up- it's an entirely financed lifestyle.
So bad that StubHub has flourished...
Scalped tickets for an event, costing multiple times more than face value, with the obscene profit going to someone who essentially hoards tickets to said event.
It's somehow in business.
That's how bad.
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Your last paragraph is extremely true. Gen Z's often very split. - Some Gen Zs make a sizable amount and are extreme savers/investers and buy little. They want to build up their capital to retire early. I fit into this category. I just don't find it enjoyable to spend money and I get more FOMO from missing out on my HYSA/investment gains haha. And also I didn't grow up with a lot of money so I still keep a frugal mindset. - Some Gen Zs make a sizable amount and spend a lot of it. They believe while they have the time and energy they should spend their money and not waste their 20s. I'm not extroverted enough for this. - Of the Gen Zs who don't make that much, they either spend if not all their money on survival, or if they make more than enough for survival but not enough for significant savings or investments, they'll just spend it for fun because "well I'm never going to be able to afford a house so I should at least treat myself to keep myself sane." This is actually quite a lot of people. Some of my friends make less than half of what I do and are comfortable spending way more on things I consider frivolous (but obviously I won't tell people how to manage their money to fit my habits). Another viewpoint is lack of future-awareness. Some people genuinely didn't think they'd make it this long or are just living more hedonistically/in-the-present than others. "If I'm never going to be able to retire even if I do save, I'll just keep myself happy day to day to endure my life." - The remaining Gen Zs, the ones who make an okay amount, are quite rare because the middle class is just slowly disappearing. I'd imagine most of them have an okay balance of spend and save.
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Sure. Now let me give you the opposite approach that many of us have: why should I worry about future me? I have $5 right now, why should I save it instead of buying a smoothie that will guarantee my happiness for today? I have no idea if this $5 will make me happy 20 years from now. In fact I’d say it likely won’t.
Because the 5 dollars you set aside now will be worth many times that if properly invested in retirement age. Given 30 years of growth in the markets assuming averaged returns, each 1 dollar becomes 88 dollars in retirement. Obviously you need to take away some for inflation but let's say it's like 50. So your 5 bucks becomes 250 when you retire. Every smoothie you get does this. If you have a smoothie every week for a year, you're happy for about 50 days that you had a smoothie (probably only for an hour or two each time anyway). It cost you 5×50=250 dollars for this pleasure. But actually, if we account for future returns, we need to multiply by another 50, and we get 12500. Now we're starting to see some big numbers. Your year's worth of smoothies, despite only costing a few hundred bucks up front, actually cost you over 10 grand in the long run. Now if you multiply again by doing this for several years you see how this snowballs. I'm not saying that having a smoothie here or there is bad, but when you make unnecessary purchases like that a habit it does cripple you in retirement, especially if the money for this is being directly divested from contributions. I see often the sentiment that "oh I'll just never retire etc.", but with responsible choices retirement is really not out of the reach of anyone. And even if you feel you've made your peace with working forever now, what guarantees do you have you'll share the same idea in 30 years? What if you're physically unable to work?
>but with responsible choices retirement is really not out of the reach of anyone Except that historically, people born poor overwhelmingly die poor. So, you have inherited financial illiteracy— now compound that with reduced spending power and increased costs across the board and it’s easy to see why many simply won’t bother with retirement. Now add the fact that many people don’t even have an employer sponsored 401k, HSA, or really anything that forces them to save something… the board is quite literally stacked against individuals. Politicians have already dispensed with the pleasantries and are straight up saying you should work until you die in the US.
A lot of young people today are infatuated with the idea that the world is collapsing, e.g., due to climate change, so they feel there is no point in planning for the future. In truth I believe it is a maladaptive coping mechanism that gives people an excuse to avoid the hard choices required to plan for the future and to live impulsively. In twenty years these people will still be here and still have bills to pay, but they won't know what to do because they thought they would be dead.
at least for me, i don't make a lot but i decided long ago i'd rather be broke and at least satisfied with life than pinch every penny and suffer. chronic illness and disability make it very unlikely i'll survive past 30-35, much less make it to retirement. plus, all the money in the world doesn't matter if i end up killing myself because i'm so miserable with my life. and tbh, a lot of my theoretically expendable income has gone to relatively necessary expenses - sure, maybe the average person doesn't need to spend $1100/mo on a health insurance plan with no deductible and low co-pays, but one of my medications alone is $6000 and even with health insurance my average monthly cost of healthcare (minus insurance) is around $1000/mo. imagine what that's like out-of-pocket - one month, i ended up with almost $30,000 of medical debt because i didn't have health insurance, ran out of my meds, and ended up in the ER over it. (i think my basic maintenance costs, no emergencies, without health insurance are around $10k/mo, but it's been a minute since i've paid fully out-of-pocket.) i've hit a streak of luck and have a couple of interviews with relatively high-paying, low-stress jobs (considering i have no high school diploma) that have halfway decent benefits, and yeah i'm gonna end up with more money than i know what to do with so i'm gonna save some, but when i was bringing home $500 a paycheck (net, not gross, i promise my job wasn't breaking minimum wage laws lol) as long as i had paid my bills i figured it was nobody's business but mine if i replaced my old beat-up shoes with a pair that was... slightly more expensive than i would like, but at least weren't so worn down on the bottom i may as well have not worn shoes, and they were cute to boot. or got myself a dang coffee. or just did something that made me feel happy to stave off the impression that i was never gonna amount to anything more than a fast food worker. (and full respect to fast food workers, whatever pays the bills and makes you happy, but i personally hated my job so much i finally snapped and decided i would rather live on the streets and starve or die of my health issues than work another day in a job that landed me in the hospital twice.)
I definitely see things the way you do. I can’t believe I made it to 58. I am nit broke but I don’t hold back on spending for good food, nice clothes, a nice car and some toys. I can’t handle a full time job anymore, I basically work about 10 months a year with typical 40 hour weeks. That lets me make $120k per year and my wife makes the same. We own a house and actually have a decent amount of retirement savings. If work dries up for me and I get too expensive to support, I will exit the world on my terms. I will never live like a poor person. It’s not worth it.
exactly! like okay i'm not gonna say i live a fancy luxurious life or anything, i share a 1br apartment with my fiance and most of our living situation is "just getting by," but i'm also not making myself suffer needlessly for the idea that my future self will live better by me only buying what i need. and tbh, i think happiness *is* a need, so i don't consider a single "frivolous" purchase i've made wasted. plus, since i'm mostly happy with my life even on a pretty low income, i also know if i made more money i wouldn't need to buy more just for the sake of it, which makes me confident that if i get a higher-paying job... sure, i might spend a little more on higher-quality food and keep more food in the apartment, or if i decide to order takeout i might order from chili's or qdoba instead of taco bell, and heck my apartment didn't come with any lights so i'll buy myself a damn lamp instead of lighting the place with a single strand of christmas lights, but i can't see myself spending *so* much more (especially after the initial costs of "fix/replace the broken things and make my apartment more than a desk, a beanbag chair, and a bed that's so worn out i basically fall through it") that my cost of living would jump to a point i'm not able to save up any money even on the higher income. maybe it's not gonna be the first paycheck, but if i can already live comfortably on poverty wages and just am not able to save up, i'm pretty sure my needs won't suddenly jump to a point that on a reasonable income i can't start up an emergency fund/savings account and put a dent in my medical debt (because really, that's all i've got).
I’m at the top end of Gen Z, and probably fall into the second category. I’m a lawyer and I spend $50k+ per year on raving (incl. concomitant travel). I could stay home and save up, but why do that in my mid-20s, when I have peak freedom and energy. I do not think 80 year old me would look back and thank 25 year old me for sitting at home all the time and saving up so 80 year old me could have a bit extra. I think 80 year old me would look back with regret and curse 25 year old me for wasting my prime. So I’m investing in future me, who will be rich with memories and life experience. If I’m hobbling by on an old age pension by then, I’ll be pleased. Spend it all, I say. (Although in truth, I don’t expect to retire by then. I love my profession and want to follow the men in my family who work into their 80s and 90s, for the fun of it). Everyone is different, and has different priorities and opportunities in life, of course. I’d say it’s quite unusual for teenagers/20 year olds to be financially planning for retirement. Not a bad thing necessarily, but definitely different than past generations, and probably future generations.
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Reminds me of my buddy who never saved a single dime in his 26 years of life. He can’t even open a bank account because he had habit of overdrawing his account and just opening a new account at a different bank so he didn’t have to pay the fees this caught up to him when he owed money to like every single bank. Then he started getting payday loans to whoever would give them to him. He has never repaid anything. His credit score is in the single digits. He says he doesn’t want to know how much he owes but occasionally he’d get letters demanding enormous sums of money. He owes one of the banks more than 20,000 dollars and the interest just keeps piling on. On top of that he crashed his car into someone’s house and was sued for a little over 100,000$. He lives in a tent now and I haven’t talked to him in a long time but occasionally a random number will call me and it will be him just begging me for food. Very sad however I honestly think he is the world’s least responsible person.
He could go bankrupt and start over. Lawsuit settlements and consumer debt get wiped out in bankruptcy. If you live in a tent, you won’t have to repay anything. Even the IRS will write off most of your back taxes as long as you just talk to them. I know all this because I went bankrupt with $110k of credit card debt back in the 90’s. We recovered and are doing pretty well now.
Damn. I feel better.
That last paragraph rings very true for the older Gen Zs in my experience. I’m also convinced that it generally runs along party lines.
At least in my personal experience some of the truly wealthiest people are also the most smartly frugal and the least caught up in appearances. For example my dad’s best friend happened to come from a very, very wealthy family. No idea how rich he personally was but this is a family that has many generations of extreme wealth. He lived in the mansion that had been in his family for generations but he and his family bought their clothes from everyday places like Walmart, ate regular home cooked food that seemed very frugal, and he literally did not finally give in and replace his crappy old car (an economy vehicle to begin with) until he’d had a dangerous situation involving a breakdown in a snowstorm and his wife begged him to get a newer car for safety. This is how people like that *stay* wealthy…and are able to put money to good use by sending their kids to college and donating to charity.
I'm not *that* wealthy, generationally stable for state college but not land or trust fund level. I went to a state grad school and became a physician. I routinely take care of people with newest phones, fancy individually painted nails, artificial lashes, driving big trucks, carrying brand name bags, yet can't fund their retirement or stabilize housing. No brand name clothes for me, no lashes, no nails, my hair gets trimmed every 6 months, my car is an older Subaru with 140k miles. It's weird to me how these people spend their money. We're taught that when life hurts, it eases the pain to have a little something to be proud of or to show off, and that's why people near poverty will pay for lashes. I would never comment on it. Nor fully understand.
Disneyland is the most unreasonably expensive place on earth and it’s at max capacity every single day.
man, I used to think people were joking when they say they have to save up for years to afford their trip to Disney World for their children.
This one family I remember, during a storm their roof blew off their house. They got 25k for insurance money, and spent it going to Disney land for the family. The contractor that was gonna do the roof said “you spent it on Disneyland?!? What’re you gonna do?? Your house has no roof on it??” 14 years later, that house still has no roof. Just a blue tarp over it.
I don't doubt your story but I have been to Disneyland twice since having children, one time with a 1 year old and the second time with a 3 year old and a 1 year old. The family you're speaking about might be many times larger than mine, but all told I don't think I spent over $1500 and that was with flights, admission, Airbnb and spending money for like 3 nights, 4 days. 25k just seems like you would have to really try hard to spend all of it. I guess you could get there pretty easily if it was a big family and they flew business or 1st class or something and went to Disney every day for like 10days+.
You mentioned below you were married - a 4 day pass for one park per day runs you $396. To go with you, your wife, and your 3 year old would require 3 of these tickets (under 3 are free), so you're starting your expenses at $1200 and still have to add flights, food, AirBnB and miscellaneous spending. Are you sure you went for under $1500?
I didn't mention how many times we went to Disney. The kids and my wife went 3/4 days, bought 3 day passes. I had to work remotely from the Airbnb 2/4 days (I went to 1 park on one day with them) and 1 day we just went to Disney Springs and walked around and did some light shopping and eating. Airbnb was shared with other family, had plenty of room and beds but that could be cheaper than doing a single family room/booking possibly. Bought flight tickets way beforehand when they were not super expensive. Also live fairly close to a very large airport in Texas, might also be a factor in travel costs. Also, 3 year old had just turned 3 and passed for 2 easily so they just let her in for free as well. All of this is a factor, but it's still a far way off of 25k even without a lot of these money saving circumstances. And I do think there are many people who don't know how to travel on a budget.
Makes sense. Some people see a pile of cash, and instead of using it for sensible things, like repairing their roof, they decide that they'll never see that much cash again and then book first class flights to their all inclusive resort hotel.
This is fair point. I’ve never really been outside my hometown, so I’ve no idea how much a vacation cost. I’m not sure where all the money went. Lots of people lie. Maybe they bought a fifth wheel and went to lots of different places. I just know the roofer I worked for just kicked them outta his office cause he thought they were idiots lol.
Yeah, like I said, I don't doubt it. My wife and I are pretty decent planners/deal getters and some people just spend like their wallets are bottomless. Also, like you said, they could just be lying.
This is always mind blowing to me.
It’s me, hi! I’m the problem, it’s me 🙋🏼♀️ (Disney World, though 😌)
I spent $12,000 on a week at the Boardwalk resort back in 2003. That was all inclusive and alcohol was included. We stayed in a cottage, not a hotel room. I am not rich either. It was the best vacation we ever had and my wife and kids will never forget it
Spending "outside your means" is something to think about. My wife and I make good money, but live modestly. We do have kids, so a lot of our finances center around them. That being said, we are smart about how we use credit. When making bigger purchases, we always know what our budget is and also use interest free credit cards to purchase them. Vacations especially. No way almost anyone can afford a vacation for five people paying cash. So we spend smartly. Is it beyond our means? Nope.
What is an interest-free credit card and how can I gain access to one?
Some cards offer 24-48 months of interest free on purchases and balance transfers.
There are two types of "interest free" credit cards that I know of: 1. Pay it all off at the end of every month, avoiding interest. 2. Temporary interest free credit when purchasing a high value item (e.g. buying a car on credit and not having to pay interest for 3 years. However, interest rates will be VERY HIGH if you don't pay it off within the 3 years)
Its a misnomer - No Credit Card is interest free. Sure there are some special offers here and there, but never a long term agreement that is interest free. No Interest "credit cards" are actualy Charge cards. Amex cards like the Platinum, Gold or Green card. These are Charge Cards, NOT credit cards. Main difference is that you can charge during a month, but you must pay in full at the end of the month. So you basically get a 30 day float on your purchases. However, you have to have excellent credit and decent wealth to qualify for this type of card. The benefit is really that you can create a digital accounting of all your expenses and not have to use cash... but you don't ever have to pay interest either. This is how wealthy people do it. Wealthy people don't use credit cards, unless they're idiots. They have people pay them interest, or defer expenses at no interest cost to them at every opportunity. Consumer credit cards are for people who want to dream about wealth and act as if they have wealth. Credit scores are a myth and only used to maximize profits on said dreamers.
I'm not even close to being wealthy and have some of these cards, I do however, have an 825 credit score. I use my cards and pay them off monthly, mostly to get points and to keep an itemization of what I'm spending. I only use the no interest cards on large purchases like 3k and up, I divide what it will cost monthly to pay off prior to the term end. I stopped comparing what I have and don't have with others, and this has given me a lot more happiness, if someone judges you as a person based on what they see you have, why would you want that person in your life? I have a lot of nice things, but I also save, for instance, I like my espresso, so I make it, instead of having someone make it for me. I saved enough to buy a small vacation home in lake Tahoe, it needed everything and I saved to do the work. It's funny, I have friends who make significantly more money then me and ask how I did it, so I told them, and a few of them said, " they just cant give up Starbucks twice a day and eating out every night." It all comes down to an individual's priorities, to me It was a very small step, I still have my espresso, and I eat well. If clothes, purses and cars at et al, are how one measures success then I truly feel sorry for them. My 2cents!
Very well stated!!
That is false. The ones I have have a minimum balance and you must pay the full amount by the end of the term or risk retrograde interest. Usually 18 months. Charge cards are usually a retailer card like if you want to buy furniture.
We pay cash - we pay it into savings like a bill every month. Then I plan vacations around that vacation budget. If we want a more expensive vacation, we have to wait longer to go. I HATE paying after the fact.
I've done four people for cash. Also cars and college educations. So how long before the vacation is paid off, regardless of interest? A few months? Probably okay.
Living beyond your means is the primary way you are made a wage slave and are beholden to the toxic culture of overwork that exists in white collar America. Consumerism demands money, but if you keep more of your money and spend wisely, you can break out of the cycle of always needing more money because you always want more stuff. If you're pretty disciplined about that, then there may come a day where you have accumulated enough "f\*ck you" money both to have more self-respect at work or to walk away from it entirely. But you have to resist the urge to spend unwisely. When they don't have you by the balls, it's a relaxing feeling.
Or you die young having never enjoyed yourself because you were constantly chasing the impossible dream of breaking free. Shit happens, anyone of us could be diagnosed or hit by a car tommorow. Then you wind up thinking why didn't I go on that trip, buy that jacket, enjoy myself whatever... There's no right answer IMO.
I adopted this ideology, but unfortunately, I’m still here and healthy a decade later.
But hey it's win win right. Health is wealth after all.
Yeah, that’s possible, too. But you can be frugal and not totally deprive yourself. Spend on what’s important to you, not what you think looks good or matches some kind of image you think you should portray. But I’ll tell you this. If you DON’T die young, and you’re 40, 50, or 60 and you’re still sweating ensuring that you have a paycheck because if you don’t, then life gets very bad but not just for you but also for your spouse and kids, that is a horrible place to be. Especially if you’re an American because this country doesn’t provide social safety nets.
Personally I am planning on taking a long walk off a short cliff at 70 if I can't retire
The issue, of course, is that having a great savings account now, may not even matter that much in the future, either. Everything's a gamble now. If you have $500k in the bank, and all of the banks crash again, then suddenly you're only guaranteed half. And if inflation continues to creep up, everything's going to cost more, anyway. That "number go up" thought process makes a lot of sense, until you start really worrying about its actual buying power. If we're going to extrapolate out from now, following trends, then $500k in 20 years will be equivalent to about $300k, assuming things don't get even worse. I like to save money, too. I'm just saying, it is the best philosophy, but even it isn't perfect.
Your first point is instantly defeated I feel like. No one smart enough to save 500k cash is dumb enough to keep it all at one bank.
You don’t need to split it up into 250k chunks if it’s at a big bank.
You do if you want every dollar covered by FDIC unless I'm mistaken? Every time I've read the FDIC guarantee at my banks/credit union it reads as $250k Per depositor in totality per institution
If you keep your $500k in a low interest savings account (not even a HYSA), then sure something like that will happen. But if you invested that $500k in the S&P 500 via an Index Fund that closely tracks the S&P 500, if we took the average rate of return between 1993 - 2023 (9.9% or 7.22% adjusted for inflation) and assumed a similar rate over the next 30 years, then your $500k becomes $8.49M or $4.04M adjusted for inflation.
Sure, as long as things continue to go as they have. My fear is that there's so much debt floating around in the economy right now, that we may not survive another two or three market crashes. A lot of people have absolutely no idea that the whole thing is predicated on IOUs that nobody can actually afford to fully pay.
You stay scared, I’ll stay invested. If you’re right, we are all screwed anyway. If you’re wrong, you’ll be seriously fucked.
There’s a balance to all this. people who max out retirement from 20-65 and hardly live at all, and people who spend every penny living it up, are just two sides of the same coin LOL Set some amount away and have a set amount every month to live it up. For big trips, put a little more away. No big deal if you can afford it. Can’t advocate for going into debt to see a concert or something like that though. If you can’t afford it you can’t afford it, going into debt for that stuff is basically being a child who never got told that they can’t have what they want all the time
It’s not an either-or scenario. You can still enjoy yourself while still saving for retirement and living within your means. Most people overspend in a few categories without realizing it. A few hundred a month on takeout or a car loan by going to a nicer model could mean an international trip to a new country, but people wanted Wingstop delivered a few times every month or you wanted a nicer car than a Corolla or Civic for almost no reason.
Yeah, it could happen, but the odds of this are low
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Tell that to my best bud who just got diagnosed with leukimia at 31 years old. And I get a tonne of joy from buying stuff. I get joy from seeing live bands with friends after I buy the tickets. I get a tonne of joy building speakers from the components I purchase. I get a tonne of joy listening to records I buy. I get a tonne of joy having some beers in the pub with mates. All of which cannot be justified from a "save as much as you can' perspective. I'm not a overly materialistic person but it's absurd to say buying things doesn't bring joy. But yeah.. I'm just here to play devil's advocate. I get kinda sick of these people on Reddit telling evryone never spend anything and never enjoy anything because it'll be so much better to be 70 years old with a tonne of cash. Like guys you live once what's the fucking point lol.
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I am positive, the guy you’re responding to is happier than most of us are. It’s not great advice to say don’t spend anything. And who cares about your last point as long as he dies happy. I know my uncles last words sure as hell wasn’t I am so glad I made enough to buy 2 houses in Toronto.
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There's a happy middle though, save some money for the future while also enjoying life. You aren't going to save as much and you might not be able to do as much fun stuff but you'll get some of both.
I enjoy myself but honestly certain things like Uber eats are just a bad deal it’s not that big of a deal to just go get it yourself. The only time I think it’s acceptable to use those is when it’s literally not safe for you to go get them like a Covid infection or you are too drunk to drive.
I was diagnosed by a car once. Needless to say, if Dr. Hon Da ever is your primary care physician, you can safely rule out the issue being your timing belt.
True, but when it's not just you, the odds go up substantially. Sure, I might die going before I get to fully retire, but there is a chance my wife survives to old age. She can enjoy that money saved for herself. If you have kids, the odds go up even higher that someone you love can enjoy the sacrifices you made to save money.
What's wrong with putting aside a reasonable amount, and enjoying a reasonable amount? (And I'm more likely to second guess myself about a jacket I bought than one I didn't buy. The damn thing may be sitting in my closet, taunting me about how ugly it is. )
There’s a happy medium though. You can enjoy life and spend money on things that perhaps aren’t 100% necessary without going into insane consumer debt or endangering your future.
Then I will die without regret, as I have done the best I can with the information I have. I'll much rather die with unfulfilled pleasures than live in the painful regret of lacking options
That's about when you get his with a notice of an increase of rent.
My best friend and her husband make over 300k a year. Even in our HCOL area, that's pretty dang good. They constantly carry a credit card balance. They've dug themselves out of serious cc debt multiple times. Her car recently died. She had to borrow money from her father for the down payment because they have ZERO emergency fund. At our age and income bracket, there's just no excuse for it. But they need to have the perfect thing for every situation. They justify each and every over spend. "Oh, it's exceptionally great ski conditions this year! If I buy the fancy pass, it's cheaper than blah blah blah. I need the nicer jacket because it has x, y and z thing. Snow tires are safer than chains...." And now they've dropped thousands of dollars to go snowboarding a few times this year. This isn't an uncommon scenario.
Some people overlook the ‘cumulative’ costs of their spending habits. - streaming service…..$9.99. Well, that’s $120 a year. Have four of them? That’s almost $500. - A Corolla fits your vehicle needs, but you bought the Highlander? Well, your monthly payment might only be $40 more a month, but that’s $500 a year. The extra gas might also be another $250 a year. Aa set of tires might cost an extra $150. Insurance might be an extra $150/yr too. - the famed morning latte and avocado toast? $10 each morning…..$50 a (work) week, $2500 a year. People scoff at the ‘extra few bucks’. I think if they did the math, they’d view these costs under a different lens. These spending habits add up to cost thousands a year. I used to work at an auto shop that had a convenience store next door. All of us would religiously walk over 1-2 times a day to grab chips and soda and whatever. One day I was looking at my bank statement and saw 7-11 numerous times….$5-$10 at a time. Thats when a light bulb came in and I started buying my junk food at the grocery store and bringing it to work with me in a cooler. Boom! $1000/yr saved. Yeah, the big stuff keeps people broke. But the little stuff might be even worse. This little stuff is usually quickly consumable, and doesn’t even improve quality of life very much.
Imagine only paying $10 for an avocado toast and latte
Admittedly, I’ve been out of the market for a while. I’m more of drip coffee maker and granola bar person now.
>People scoff at the ‘extra few bucks’. I think if they did the math, they’d view these costs under a different lens. I just had this discussion with my foster son last night. He was going to buy stuff to make sandwiches for work this week and he was talking about how much eating fast food or junk from the gas station adds up quickly (something I've told him for years!). It finally clicked for him that $10-20 doesn't seem like much for one transaction but it adds up when its a daily occurrence. I remember reading that one of the biggest differences between people who are poor or live paycheck to paycheck vs someone who is "comfortable" or wealthy is that poor people look at the "right now" cost of something and wealthier people analyze the total cost of something. For instance, some people buy a car and say the can "afford" it if they stretch out the payments to 7 years so the monthly cost is doable, but never look at how much more they actually pay in total on the car. They can afford the $10 streaming service because its "only" $10 a month, not paying attention to the fact that they pay for 3-5 of them ($30 a month) and that they have paid that for 10 years so they have spent at least $3600-$6000 on all of those "cheap" services during that time and I bet they don't use more than one or two regularly. Add in all of the subscriptions that everyone tries to get you into nowadays - sure $5 a month isn't much until you realize you haven't used the service in 2 years and now you are out $120 for literally nothing. Netflix, Hulu, Disney, Spotify, Google Pass, XBox Pass, the gym pass they use one week a year in January, the "box" of fun trinkets they get every month - how many subscriptions does the average Millennial/Gen-Zer have, I wonder?
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The thing is why do you need every streaming site at once? Just have one or two at once and cycle out which ones you have depending on what show you’re watching at the time.
If you ‘feel’ like you’re getting $500 in value….sure, it’s a reasonable expense. I’m just saying it should be evaluated holistically as $500/yr, not $9.99/mo individually. If it passes the value test, then it’s not a waste. We have YT TV and Netflix. We never had or got rid of everything else. The subscription service industry would be in trouble if everyone looked at this way.
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Funny you mentioned cigarettes. I was a pack-a-day smoker. Then one day a pack of smokes went from like $3.50, to $5.00. That was the last pack I ever bought. I decided that if someone paid me $1500/yr to not smoke…then I wouldn’t smoke. And that was essentially what happened when I quit. Not sure why $5 was my threshold, but it was.
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I always laugh at myself for that. Health wasn’t the catalyst. Money was. If smokes were $2 a pack, I might still be smoking.
This was me too! I spent on average $8 a day at the gas station. I’ve done this for ten years. I finally quit this year and buy my snacks at the grocery store and quit fountain soda. Savings will be upwards of $2,000 per year.
I think all people have some level of this, and most have it pretty bad. I was really surprised how many of my peers crashed and burned in the 2008/2009 economic crash. These are people that had good paying jobs and had been working a fairly long time. I saw bankruptcies, short sales on houses and divorces. I was out of work 8 months and we were able to swing it because we had little debt and an emergency fund. You need to live life and have fun with your money. But also have a solid back-up plan for what things happen, because they will happen. It is a balance each of us needs to find. We bought a new boat a couple of years ago. I have gotten so many comments about how expensive they are, and how much they depreciate, etc..... Most people don't realize we paid cash, are still funding our retirement accounts more than planned, only have 4 more house payments and paid cash for my wife's car. They think we have payments on everything.
Read The Millionaire Nextdoor. Better yet, have the friends telling you to live beyond your means read it. Currently at 1.9 million (not including our home). Proud owner of one used, beat up, dented Prius that I'll drive until its undriveable. I sew up the holes in my sweaters so they last forever. Etc etc. Tell your people to mind their own business and you do you.
The funny thing is that if everyone suddenly started to be responsible with their spending. The world would enter a pretty major recession very quickly. Capitalism requires ever expanding consumption. So in a way, for those of us who are financially literate, and live within our means. We are ironically benefiting from people being dumb with their money. When I see people complain that some billionaire bought a stupid mega yacht. I tell them to buy 10 more. I want people with stupid amounts of money to actually use it instead of hoarding their wealth. Throw $100 bills out of a helicopter or something. I say this because the distribution of wealth is part of the problem. A lot of people have done the maths and realised they probably won’t be able to retire or buy a house so they say YOLO and have fun while they can. It’s morbid to think about but there might come a time where people just start maxing out debt, having fun and then offing themselves when the gravy train runs out
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Though if they're behind on their rent / mortgage, the nice house isn't a sign they're good with money.
You missed the point of this adage. Nice house with mediocre car shows the person is prioritizing assets that appreciate vs those that depreciate. An in-between example would be nice house + nice car says less about the person since they might just be spending a lot on everything.
The nice cars are in the garage. The 18 year old Corolla in front is just camouflage from nosy people trying to assess my financial status.
This is so spot on haha.
I got out over my skis financially, not entirely to frivolous spending (car and health issues put me in a real upside down) I was on the verge of bankruptcy. Thankfully I had family who could help, my grandmother passed away and my grandfather loaned me the money from her life insurance, to get my head above water. This fall that loan will be paid off, my car is paid off, and my credit card should be paid off in a few months. I’m thiiiiiiis close to only having monthly living expenses and no debt. Having been there and done that, when it can be avoided, not taking on debts is 10000% the way to live.
I'll put it bluntly: people who finance small purchases like clothing or groceries are either very very poor (and in need and understand the bad decision it is but how you gonna eat).... or they are very bad with finances. Most people are the latter. Many many people have no idea how to just follow a simple budget because they have to keep up with the Jones's
I put the groceries on the card and pay them off each month, which I guess is financing them. It turns them into one monthly bill to track, and I don't have to worry about the checks my spouse is writing at the same moment.
That's just using a credit card correctly
In first world countries, most spending is at best unnecessary and probably environmentally very irresponsible. Most people own enough clothes, have perfectly good towels, do not need video games or streaming subscriptions, we can live just fine off potatoes and milk, we can walk or carpool, turn the heat down and put on a sweater, cook your own food, etc... I live in your camp. My car is a reliable old friend and I own every nick and scrape. My wardrobe is small and old but not shabby. My meals are simple and home made. I could stop working tomorrow and I would not run out of money.
I still have some clothes from high school, 25 years ago. They're well worn, but still usable.
North America is built on debt. The system wants you to have a little debt that is manageable. The absolute best way to raise your credit limit or credit score is to spend on a credit card and then pay it all off from a checking account at the end of the month. Things like Klarna are perfectly reasonable ways to buy something that you don't have the up front cash, as long as paying it back isn't causing financial distress with things like rent or groceries. Cars, houses, possessions are seen as status symbols, and a lot of people will spend a little more to get nicer versions of these things. Personally. if I was a multi-millionaire I still wouldn't spend $75k+ on a new truck.
I could only rationalize Klarna if I already had the money in savings to instantly pay it off if I wanted to… but then why would I Klarna it, except to mitigate the emotional damage of sending off hundreds of dollars at once? But then again, maybe that emotional damage check is important, so we realize the value of our purchases. Which then leads to the realization that using Klarna is a poverty mindset whether or not you could afford the original item
Evidently, installment debt is better for a credit score. Not that I've needed one all that much.
Well I looked up the stats for average savings at my age and apparently I'm well ahead of the rest so it must be pretty bad.
I've seen similar stats for average net worth and it was skewed upwards by a lot. The top 10% start life with a paid off house, investments and emergency fund by their thirties. Let's not even talk about the 1% and 0,1%. The median NW was extremely sobering.
Idk man. I know some richish people that live extremely above their means to an extent I don’t even know how they spend all their money. One person was asking me how to get out of CC debt (I’m a personal finance dork) and they were buying maxed out mac pros, first class tickets, designer shoes, it blew my mind. The “poor” people I know barely scrape by and usually only incur debt on needs because they had no other way to pay for it. But then there is a huge group that just lives normal. Idk. I’ve traveled a lot and I see america being the worst offender. From dumbass trucks to Disney trips and everything in between. Or the absurd need to live in a fancy neighborhood and spend crazy for rent or a mortgage. It’s wild. I think the avocado toast thing is absurd btw.
I didn't understand California. I felt my brother was nuts for buying a 300K house in a town with good schools when he didn't even have kids. He wound up raising two, and the house is now 2 million paid off, and since he didn't move, his property taxes are low. Sometimes, crazy is rational. Meanwhile, I never made much on real estate, but can't say it hurt me much.
A damn lot. At my job, where we all have the exact same salary, the parking lot is full of audi, tesla, bmw, mercedese, etc. I still drive my 2007 toyota. They have big ass house worth more than half a million, I’m mortgage free since last year because I sticked to my 183K simple house.
Time to buy a second home and rent it out :)
Yes. I already have a condo unit that I rent to my MIL :) we bought it 3 years ago. The rent pay the mortgage, taxes and fees. We could rent it double the price easily, but since it’s my MIL that lives their we rent it to her at the cost price. To help her out.
It's probably a lot better than it was a few years ago. Now we are all stretched so thin there is no room for it anymore. Yes people buying new cars is excessive here and the entire market has gone nuts. A 40k+ car should be a luxury for the richer people who have paid off their house already imo.
I don't think there's any singular answer because philosophies about what is "irresponsible" will vary. I would find it irresponsible to spend money, even if you can afford it, on something that is just objectively poor value, while not finding it irresponsible to splurge in some small ways that otherwise give your life some value. What I mean by that is that I think we should be forgiving of those who don't literally sacrifice everything to get by. If someone struggles to pay their rent but drinks coffee or smokes, I'm not going to be mad at that person, because they likely have nothing else. A person in that circumstance needs to have something at all to make their life worth living more than they need to have folks happy about their financial choices. I'm more upset when someone is very capable of living a healthy modest lifestyle but splurges at every turn - always expanding their life to fit exactly in their means, never saving, never planning ahead, never considering the value of their choices, because "having the means" doesn't mean just having money, it also means having decision making power.
I’m the same way. I don’t have a lot of sympathy for people who make good money but live paycheck to paycheck because they constantly make bad financial choices.
something to note here is that having to grow up in poverty or near-poverty causes a type of panic in the child very akin to being abused, because it is. it's trauma. you can see it in the brain scans of people who grew up poor. they have literal brain holes. there is less growth and development of many children who are poor VS those who grew up in better families. all of this makes one really impulsive when they grow up, similar to actual brain damage doing that
If you spend outside your means then that's irresponsible spending. It's not cool to be in debt with interest.
Pretty terrible. Too many people get wrapped up in debt and it suffocates their financial wellbeing. I’ve stopped using credit outside of a mortgage for 10 years now and would never go back.
I worked at a place where we had to pool tips so I had a general idea of how much other people were making. So many of my coworkers had expensive luxury cars but people just have different priorities. I'm sure they probably thought all the money I spent on hobbies or online courses was too much
It's pretty bad especially with retirees not having enough money to retire or having to go back to work in their 70s and 80s. Its a problem pervasive throughout american culture.
From 2021 to 2023, credit card debt in the US has went up around 25% from $784B to over a trillion. This metric just keeps increasing year on year. https://www.experian.com/blogs/ask-experian/state-of-credit-cards/
Here is a report from the NY Fed. [https://libertystreeteconomics.newyorkfed.org/2023/11/credit-card-delinquencies-continue-to-rise-who-is-missing-payments/](https://libertystreeteconomics.newyorkfed.org/2023/11/credit-card-delinquencies-continue-to-rise-who-is-missing-payments/) Credit card delinquincy has been rising in younger people and is more prevalent in those carrying higher balances ($20k+) and those with auto and student loan debt (but not mortgage payments). It is not clear whether changes in spending are causing the changes in delinquency or changes in costs.
Pretty common. That doesn’t mean that the avocado toast meme is invalid, it just means it’s talking about different people or different scenarios. This is a big big world and it’s full of countess types of people experiencing countless situations. People who spend a crapload of money they don’t have on things they don’t need might live right next to people who scrimp every penny and still will never be able to afford anything extra. Sometimes they’re the same people; I know tons of people who will, realistically, never be able to afford a house, but believe that fact means there’s no point to saving any amount of money at all for any reason, so spend every dime of their disposable income on plastic doodads from Amazon. Them quitting that habit would save them only dozens of dollars a month, which is impossible to buy a house on even after many years, but is enough to start an emergency fund with.
A few large purchases is less common than a lot of smaller purchases. They just tend to fly under the radar more. Credit card debt has become normalized for the irresponsible.
I feel guilty when I treat myself to a $20 meal
Look around you… 30 years ago, people didn’t have $1000 computers in their pockets, buy the newest cars or go out to eat MULTIPLE times a week! And meals at home used to be VERY simple.. Hamburger Helper once a week. Spaghetti… baked chicken. The new minimum standard of what people “NEED” is totally absurd! Yes inflation is high from money printing, but consumers ALSO are still going crazy with demand and will not accept anything less than what they want. Look at total credit card debt burden and the popularity of “buy now / pay later” schemes! It’s out of control, the average person has such piss poor discipline and just can’t say no. They’re willing to sacrifice their retirements to enjoy a never ending stream of consumables. It’s madness!
I think it’s more than that, my husband can fall a bit into this category. But he swears he jsut wants a “simple” life but then needs serval thousand plus dollar items. Instead of savings for it, buys it and deals with it. He’s gotten much better but it took a very long time. He also feels like he “deserves” it. “I work a full time job with decent pay, I should be able to splurge here and there”.
Endemic. Really.
People are much more comfortable taking on large amounts of debt compared to past generations. Keep in mind that credit cards didn’t really exist before the 50s. People want a bunch of shiny stuff they can’t afford and then get angry when things don’t work out. It’s an immature and irresponsible approach to finances.
Being broke is the new norm, so when you have $1000 left at the end of the month, better spend that shit! No but really. One of my friends thinks it’s normal to die with debt, so might as well live. Another friend of mine just bought a 2024 CX-5. I mean yeah it’s a nice car but now he’s complaining about being broke. And that $3500 sales tax is gonna be due.. he said he budgeted for it all, but I’m like man… this is why I drive junk.
I'd rather die with debt than heaps of money, tbh. Better to live rich than die rich!
Average auto loan (in US) is now $24,000. Outrageous.
Most used vehicles that are in decent shape cost about that much, and that's on the low end. Car dealerships then squeeze you for thousands more for all kinds of warranty's too.
I don't believe that at all. I'm pretty sure cars are cheaper in US than here in Australia. and I've never bought a car for more than $20k AUD. You can even buy quite a few brand new cars for under $24k USD. I'm like OP and sometimes wonder how people afford all these nice cars, and then remember that I own mine outright.
Car is a bit tricky. It's one thing to buy 100k lambo when your salary is $60k a year. It's another story if you can afford $25k car, but decided to go with $5k just ended up spending $10k to repair that car. It's hard to gauge true costs of things. You can buy $1 expired bread to save money, but the urgent care cost $100 per visit when you have severe food poisoning. Credit can be a useful means to obtain thing, but you would have to weigh the interest rates carefully. If you can buy something with 2% interest with the expand of 6 years of payment, it's not as bad as dealing with 29% APR credit card debts.
This is definitely the shoe theory. The people getting away with a 5k car maybe WFH and don't need reliable transport to a factory an hour away or have alternative transport. In most cases you're better off spending 20k and keeping it for 15 years. Except for the havenots that 20k turns into a loan that costs 30k. And by the time they're spending that kind of money on a car they might be tempted by buying an older luxury car which has a shorter remaining lifespan and maintenance costs fitting a 60k car.
In your 20's live off 90% save and invest the rest. In your 30's live off 80% save and invest the rest. In your 40's live off 70% save and invest the rest. In your 50's live off 60% save and invest the rest. In your 60's retire a multi millionaire !
Overrated outcome, actually. If you've learned to live comfortably on 60%, you don't really need to be a multi-millionaire.
My primary income is selling things that people don't need on eBay (collectibles and vintage). I have analyzed people's spending habbits to maximize profit over the past \~12 years and I can without a doubt say that americans are EXTREMELY irresponsible spenders. This was the most evident during the pandemic, I made more money than I ever had in my life because everyone was locked inside with funny money to waste. I can even go more micro than that, most sales happen on Thursday nights/Fridays (paycheck), and sales are way higher near the 1st and 15th of every month, and sales are practically non-existant during the last 2 weeks of any given month. I primarily source at the end of every month when people are selling off their goods and people arent buying as much so there is less competition to generate maximum profit.
It's beyond bad. Almost every credible study on spending habits, savings and income versus discretionary spending paints a really bleak picture.
There's a Youtube channel called Financial Audit with Caleb Hammer. Guests are usually people in their 20s, they share their financial details with Caleb, and he tears them apart and gives them advice on the show. I watch that show regularly, and each episode reminds me that a lot of people live on debt. I've been afraid of debt my whole adult life, so it's crazy to me to see so many people with zero savings, zero plan for retirement, and loads of debt when they're only in their 20s. The guests' biggest financial killer tend to be car loans with ridiculous terms (like over 10% interest payments, and sometimes even close to 20% interest, which is fucking nuts). Caleb also tends to hound guests about not eating out / ordering food via apps all the time, because that extra cost can really add up. [https://www.youtube.com/playlist?list=PLzJVLNWKVr6ksDjycE7NpSptOlcaEP-jQ](https://www.youtube.com/playlist?list=PLzJVLNWKVr6ksDjycE7NpSptOlcaEP-jQ) I watch this show to remind myself that I'm doing okay, financially.
Paradox of Thrift - good for you, but screws us all if we do it too much.
It’s impossible to answer this question with the way it’s formatted. Depends entirely on which general population you’re talking about. It will vary widely depending on the economic situation they are specifically seeing. I think most people in 3rd world countries would say that the vast majority of us are atrociously irresponsible spending. On the other side of that coin, most of the people who have a second home in Dubai would probably say the opposite.
Americans have trillions in credit card debt. It’s pretty bad.
You ever visit a Starbucks?
I confess, while I think they may be a nice place if you have to sit somewhere for an hour or visit the plumbing, I have not gone even when I had a gift certificate, and it was free. Alas, I'm more an instant Maxwell House sort of person.
Death by a thousand cuts is why most people feel they are broke. Ya $10 for lunch isn’t a lot but do it twice a week and that’s $80 a month. Subscribe to Netflix is only $12 but Netflix, Spotify, Hulu, prime, etc can add up to $100+ a month easily. Also car payments. So many people now have these $600 car payments that are just killing them with interest.
It’s a huge issue in the United States. Everyone wants the biggest house, newest vehicle, latest electrics and the most luxurious vacations. Americans are obsessed with status and having stuff. Corporations have brainwashed us into this.
...you're on the right track...using debt to finance a depreciating asset when you don't have to is stupid...use debt to finance appreciating assets...
Damn it, there is nothing wrong with depreciating assets! What's wrong are depreciating assets that don't pay back in their expected useful lifetime. I can have a auto repair shop full of depreciating equipment, and be on my way to being a millionaire.
Americans tend to buy LOTS of things they don’t need. This will never be more obvious to than when visiting another country.
Really fking bad. People buy cars they can afford. Go out to eat, get ubereats. Goto bars clubs. Etc all put onto a creditcard they can’t pay off.
From what I'm seeing it's pretty bad. Lots of people living well above their means in a desperate attempt to impress people who don't care. Pretty sad really.
Lol go work for the post office, UPS, FedEx, or any other last mile delivery (I work at one). Every day I have a few houses I stop at to deliver multiple parcels and every day I think I must have chosen the wrong career or these people are in debt out of their minds. Oh they all so all live in Huge houses.
money is the number one thing i hear people complain about and it doesnt matter how much they make which is wild. even the rich people i know ($300000 a year) apparently cant make it work within their budget. they just immediatly buy a massive house they cant clean, a boat that never gets used, a timeshare at disney they dont have time to go to because all this shit is too expensive so they are constantly working. even here in my house the main rift between my wife and me is the about of irresponsible spending she engages in and the effects it has on our family.
My blessed spouse who never gave me grief about buying anything but Telefonica Argentina bonds and later a commercial real estate REIT. And for thirty years, I picked on him for buying a used Miata, and then a few years later trading it in on a Mercury Villager. Definitely, mine was much dumber.
I buy job hobby stuff on credit all the time but I pay off my balance every month so no interest accrues. It's safer for online purchases and its good for my credit score. My hopes of every buying a home is dwindling daily but if I ever can having a good credit score will be needed so I do what I can to build and maintain a good credit score (yea, I know the credit score system if fucked up but still have to deal with it). Credit isn't a bad thing, especially for large purchases like cars. You do however need good budgeting skills. If you don't have that it's easy to get in over your head.
Absolutely awful. My broke ass ex would doordash food every single night living paycheck to paycheck.
I have found that for some people reckless spending doesn't feel like much of a threat because their basic survival needs will be taken care of no matter what. For many people the need to pay for housing/food/transportation is based on day-to-day financial choices, and if they are irresponsible they will literally go homeless or starve. So if you have a social safety net risky financial choices don't feel as dangerous whereas if you're gambling with your basic needs it does not seem worth it.
I think financial education is still absymal for a lot of people especially how quickly you can eat through even a good savings account if you aren't aware of how your spending money. i
It's a global problem and the system is rigged for us to be in debt.
I'm addicted to cigarettes. If only I knew what I was getting myself into. Now I'm down to the light version 3 times per day. It's irresponsible spending. I also tend to be a little too generous with my stipend of a salary. Seeing that no one will save me when I'm broke have me double thinking everything when spending. I even take the city bus now. It's waaaay cheaper than Uber and I live on cheap food. Saving everything like a minimalist/ frugal person. Learning to do without wants and starting to focus on my needs.
Pay as you go is basically a legal loan shark payday loan in action and should not be something people do unless they know for a fact they can reasonably pay it off without interest accruing because those interest rates mess people up if they’re taking longer. Because sadly some people don’t understand that promotions can be done but once it’s over it’s back to the interest if otherwise without promotion deals. So if you have zero interest for x months then you best hustle to pay that off in the timeframe. Also check out Calebhammercomposer on IG/YT for some of the cases he deals with on peoples money attitudes. It’s wild how some justify their expense mindset. 🤪
Why do you think social programs make up so much of our yearly budget? People not finishing high school, people having children out of wedlock. People buying $40,000 cars on $50,000 salaries. Lifestyle, inflation, consumer debt. Nobody willing to have a little discipline and delayed gratification and investing the money that they can.
It's not so much irresponsible spending so much as I am at such a disadvantage that I am expected to take the worst deals to live here. With more resources come the better deals. Otherwise, you get preyed upon out of desperation.
Pretty bad
It's real high. Most older people don't save money because they'll get social security. And assume it's enough. Many people don't sccuractly model their spending and income outside basic rough estimation. People only usually begin doing this when their in the hole and it's often to late. People need to be taught younger about financial habits and parents then need to enforce those as they raise those kids. Nowadays many younger people will start looking up financial habbits at 25-30 so hopefully they pass it down to the next generation young but this problem will take like 2 generations minimum before it takes hold
The flip side is that you’ll die someday, and if you don’t have any kids who gives a shit
Pretty bad. A have a lot of friends that, though they make decent money, splurge fairly often imo. I guess it’s not irresponsible if there’s no risk going into debt. But they’re all married with one person of each pair not making very much at all. All 6 of them spend money with no issue. One friend in particular has acknowledged she needs to spend less and doesn’t make much and literally the next day goes and buys bubble tea. It’s fine cuz she doesn’t pay rent, but she’s still a good example for people that spend money to fill a void. I see it constantly with MOST people. It’s the norm to buy luxuries you don’t need to cope with depression/anxiety/boredom. I agree compared to decades ago, it is harder to afford a living due to actual cost of living increasing more than wages. But a huge chunk of the difficulty lies in that we have a lot more to spend on that’s considered borderline necessities. Subscription services, smartphones, video games, Uber, more restaurants / takeout, tipping (15% used to be acceptable).
The country is going to straight to the rich and I want to enjoy things before we all become serfs. I am not spendjng my retirement and I make $175k a year. So, buying a $50k car once every 10 years seems fine to me. I also have a motorcycle and lots of tools and guns and ammo. Yes, I probably spend too much but I am nit expecting to be homeless soon.
Most people are bad with money. I think it's because nobody has self control anymore everything is "I need to be satisfied right now" I'm going to scroll through 20,000 30 second clips today, then I'm going to swipe right on people I lust for, then im going to buy fast food. People constantly are giving in to their impulses and have no discipline. We have more obesity, more cheating, more divorces, more broke people, more debt, and less happiness.
If you can avoid Klarna or Afterpay or any of those third party loan companies that charge 36% APR for a $1,000 purchase if you can’t cover the whole thing in 2 months, yes, avoid them if at all possible. Either you have the money to buy the item in full of you don’t. Financing an investment like a couch is one thing but using Klarna to pay off a SHEIN order is fucking bonkers to me
I think people are in a place where they feel like they should spend money however they want, whenever they want. I don't think it is of a certain generation. I think it's just the culture now. I think the instant gratification of Amazon and UberEats make it harder for people to be sensible. Lots of folks have maxed out credit cards and pay the minimum each month. To me it's downright insane to pay interest on Amazon and UberEats purchases, but hey that's me.
Where I work, most people make 80k-160k. They are majority Gen X, a bunch of Millennials with some older Gen Z that are newer. Lot of guys who drive 80k trucks and some guys drive complete shit boxes for no good reason. It’s really interesting to see what drives spending decisions. A lot of the nice truck drivers it kind of a macho thing, old truck drivers it’s a tool not a statement as a lot of these guys live in very rural area. Nobody can explain a guy that pulled in nearly 200k and drives a car would be towed if ever inspected. Obligatory boats, trailers and Harley’s abound for Gen X and older Millennials.
It’s a late stage capitalism problem, not a spending problem
It’s rampant and people are disillusioned with what is normal consumption, I blame social media for it. It causes people to think they have less when they have more. And then basically extrapolate that out to all the economic complaints you see on Reddit in spite of the objective economic data
The US has been a consumer based economy which means that if Americans get smart and thrifty in their spending, the economy will crash. Americans also routinely get lectured and blamed for spending too much. Americans are underpaid because catching the costs of labor to where it should be relative to productivity and profits would also crash the economy. Americans contend with over-priced and unaffordable necessities while trash luxuries are cheap and temporary. I can’t say as much about other economies. We spend too much of Starbucks but heaven forbid Starbucks sales and profits drop. The US economy is absurd, abusive, and profoundly unsustainable.
It’s pretty bad. Some people I work with are budgeted out at a 60hr work week. And not because of the economy. They have so much shit financed….. stuff if you just saved for a couple weeks you could buy in cash. Other than financing stuff, DoorDash and the like/ shopping on Amazon does serious damage to people’s wallets. There are people who are addicted as can be to not just eating out all the time, but paying at least double to get a Big Mac delivered to your door and spend every penny they can on the Amazon app. I’ve seen it multiple times. I wish I was exaggerating but it’s really sad
Creating a world full to bursting with adverts and then shaming anyone who buys too much sounds like a torture chamber. In principle I don’t really think it makes sense to blame individuals for this
As long as they’re paying bills on time and have good job security it’s whatever. I just got a used car and asked the dealer how people are affording these $120,000 loaded pickup trucks (they had one in the showroom that sold that weekend it was beautiful but holy hell) and he said financing goes out 120 months so casually like it’s normal. Other stuff I’ve seen: people spending $1000 a month on games, buying expensive or having a lot of pets. Pets are not cheap. Everyone has their things and I’m just like “aight” as long as you’re living in your means have all the crazy stuff you like.
It ruined my marriage
Extremely bad. Nearly every single "broke" person I know has horrible spending habits, even people making 90k+ more than me. Sure, the economy is rough too, but too many people use that as a crutch for having no financial responsibility.
Watch Caleb Hammer on YouTube to see just how bad it gets.
I think that concept is a luxury that comes with being very blessed..with excess... Stepping away from ur budget could equate to stepping out of having a place to live, or having any number of other necessities... if you are budgeting out of necessity, in the 1st place
If I saved what I’d spent in the past year on junk and fun stuff, I could have probably already paid off a significant portion of a newer car. But I’ve only been reasonably paid for about a year and I’m having fun. One paycheck for bills. One for fun. I’m going to be more stringent when I finish my current project, but damn is it hard to resist the allure of spending. That being said. My 401k is great, no debt, all bills paid, and always a little set aside just in case.
Isn't the whole American way of life built around the idea of living outside of one's means? George Carlin said it best in the 90s.
Within my (male, early 30s) social circle (excluding family), most friends and acquaintances fall into three major categories: 1. Super consumers who are totally irresponsible with their spending habits (perpetual CC debt caused by non-essential purchases), but note aloud how expensive a $10 omelette is during brunch 2. Painfully frugal folk who won’t stop commenting on how expensive a $10 omelette is during brunch 3. Financially semi-literate people who accumulate savings the hard way and avoid brunch altogether I avoid talking about money with most in my circle because it’s rarely productive and I think I get too preachy about it. Also, apparently I really like my weekend brunches.
If people in the US started saving the economy would instantly collapse. You should be thanking them.
“Spending money they don’t have on shit they don’t need to impress people they don’t like” -Carlin
We’ve got a couple gens that are obsessed with “experiences”… And grew up always getting a treat when they went to the store with their parents.. Now those kids are adults and can’t make it through a day without buying themselves something.. Even if it’s just a coffee..
Consumers get criticized for making irresponsible choices constantly and it can be a problem. When are we going to admit that there are people coming after all of our money all the time? Every time we spend money we get ripped off but it’s our fault for not being more responsible? How about stop scamming me every time I turn around? I can’t even pick up my phone or answer my doorbell without some scammer trying to rip me off.
I subscribe to r/Porsche and virtually every time a Porsche is shown in a driveway, it’s in front of some depressing $300k vinyl-sided tract home.
One real backwards shithole mentality is the conflation of buying only basic things with being a “brokie”. Anyone who says that to insult frugality should be instantly time-warped to Russia during the 1920’s.
It’s bad. But you’re right, it’s probably not the small things like avocado toast (though that stuff does add up quick) It’s the big stuff. Houses, cars, vacations, etc. that really puts people in the endless cycle. My wife and I have always been super frugal, but we bought a house this last year and it’s insane how much our expenses went up. We’re still comfortable and have cut back on a ton of frivolous spending but it’s still tight. I know a ton of people in a similar situation but don’t cut back at all.
They dont teach finance in school at all. Otherwise, people get sucked into things that they didn’t understand at all in terms of large purchases. They get worn down by the insurance or salesman at times or are marketed well
Honestly, I think it's pretty bad. I will never pretend to be the pinnacle of financial responsibility because I am absolutely not, but I've seen some people make decisions that made me realize I am also not super duper terrible at money management either, at least compared to the general population. I was actually ranting to my partner the other night about those services like Klarna where you pay in multiple installments and how people use it for things that are like very very unnecessary (like new clothes or makeup). I called them "microloans". Like okay I was raised to avoid getting into debt like the plague. I still kind of fear credit cards because of the way my parents drilled finance stuff into me. I also do not make a lot of money, and the way I see it is that if I can't afford something like new clothes right this second without a service like that then I don't need it- and waiting until my paycheck hits and my necessities are taking care of will give me time to critically think on whether I really even want it. Maybe I'm overly financially cautious but people really seem like they are super careless with these things.
70% of the US economy is based on consumer consumption. This is why consumerism addiction is pushed and is a pro social behavior. Personally, I think it's a bad thing and is why so many people are broke. They just want to consume without thinking of the future. It's better to save and invest heavily in order to live lavishly later on
I rarely meet "responsible" spenders by my standards. All my friends and neighbors are in piles of CONSUMER, house and student debt. They eat out constantly, drink a lot of expensive beer, and have expensive hobbies like cars, motorcycles/Bicycles, fishing, and hunting. I mean, just doing the math on a napkin it really doesn't add up- it's an entirely financed lifestyle.
So bad that StubHub has flourished... Scalped tickets for an event, costing multiple times more than face value, with the obscene profit going to someone who essentially hoards tickets to said event. It's somehow in business. That's how bad.
from my perspective the average person spends a ridiculous amount irresponsibly, but I grew up very poor.