Author Topic: NYTimes - basing life on what you can afford  (Read 1896 times)

Plugra

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NYTimes - basing life on what you can afford
« on: March 20, 2017, 10:08:41 AM »
Here are some tough stories about people who are earning at or below the median income.  They're all struggling.  In most of these cases it's hard to say what they could be doing differently, as few financial details are provided ... 

https://www.nytimes.com/2017/03/19/your-money/budget-what-you-can-afford.html?

... but in a few cases they would surely have benefited from some education in financial matters:

Quote
Her months of “unemploycation,” as she calls it, began when she lost a teaching job just a month after making a down payment on a $162,000 townhouse. “I ran up about $9,000 on my credit cards that I couldn’t pay,” she said. Soon she was in crisis, facing a 30-year mortgage, $15,000 in student debt and her credit-card bill.

madgeylou

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Re: NYTimes - basing life on what you can afford
« Reply #1 on: March 20, 2017, 10:53:09 AM »
Sigh, the proper term is FUNEMPLOYMENT. These kids today and their non-melodious portmanteaus!
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Warlord1986

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Re: NYTimes - basing life on what you can afford
« Reply #2 on: March 20, 2017, 12:15:58 PM »
The one dude has a degree in engineering, but rather than get a job with that he's trying to build up a freelance photography business. I mean, follow your dreams and all, but maybe do that on the side while working as an engineer?

How do U.S. veterans have student loan debt?

Slee_stack

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Re: NYTimes - basing life on what you can afford
« Reply #3 on: March 20, 2017, 02:08:32 PM »
The one dude has a degree in engineering, but rather than get a job with that he's trying to build up a freelance photography business. I mean, follow your dreams and all, but maybe do that on the side while working as an engineer?

How do U.S. veterans have student loan debt?
They also receive 48K per year in disability payments... $48k!!!  Holy cow!  Really sounds like someone is living too large...

pachnik

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Re: NYTimes - basing life on what you can afford
« Reply #4 on: March 20, 2017, 03:17:27 PM »
I know I take things too literally but I looked at the headline 'Basing life on what you can afford' and I thought, well, that's reality.  For most people anyway.  I also make the median income and very recently my salary went a little above.  I can't just spend, spend, spend and I have to make choices.   For example, last year my husband and I prioritized travel and we took a trip to Paris and London.  So I saved a little less in my RRSP for 2016.  This year we'll take a 'smaller' vacation as we call it and save more.  In 2018, we're thinking about Europe again. 

I am not saying that I am unsympathetic towards the situations.  Some of them have had some strokes of bad luck but that too is part of life.   

doggyfizzle

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Re: NYTimes - basing life on what you can afford
« Reply #5 on: March 20, 2017, 03:20:08 PM »
The one dude has a degree in engineering, but rather than get a job with that he's trying to build up a freelance photography business. I mean, follow your dreams and all, but maybe do that on the side while working as an engineer?

How do U.S. veterans have student loan debt?
They also receive 48K per year in disability payments... $48k!!!  Holy cow!  Really sounds like someone is living too large...

And they've got their healthcare covered through the VA; I don't understand how they aren't in a much, much better financial situation.

BFGirl

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Re: NYTimes - basing life on what you can afford
« Reply #6 on: March 20, 2017, 03:21:25 PM »
The one dude has a degree in engineering, but rather than get a job with that he's trying to build up a freelance photography business. I mean, follow your dreams and all, but maybe do that on the side while working as an engineer?

How do U.S. veterans have student loan debt?
They also receive 48K per year in disability payments... $48k!!!  Holy cow!  Really sounds like someone is living too large...

Yeah.  Any sympathy I had went out the door with that revelation.

WildJager

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Re: NYTimes - basing life on what you can afford
« Reply #7 on: March 20, 2017, 04:49:52 PM »
The one dude has a degree in engineering, but rather than get a job with that he's trying to build up a freelance photography business. I mean, follow your dreams and all, but maybe do that on the side while working as an engineer?

How do U.S. veterans have student loan debt?
They also receive 48K per year in disability payments... $48k!!!  Holy cow!  Really sounds like someone is living too large...

And they've got their healthcare covered through the VA; I don't understand how they aren't in a much, much better financial situation.

Unfortunately, that's how most people in the military are.  Come out of the gate young and into an aggressive field and mentality of work hard/ play hard.  The job security allows you to get easy loans from the banks for fancy cars and big houses.  It's definitely a culture thing.  Some people grow out of it, but others stay that way their whole lives and work multiple careers (with the pensions) and still can't make ends meet.

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Re: NYTimes - basing life on what you can afford
« Reply #8 on: March 20, 2017, 05:02:08 PM »
I read the military-couple article three times and I keep coming to the same question: what was the point of that article?  They obviously live beyond their means, life is difficult, and something Trump. And...?  There didn't seem to be an actual conclusion we were supposed to draw.

As far as the teacher article...
Quote
She says she will not change to blend into her upper-middle-class Briargate neighborhood

Holy Shit, Briargate!?  Colorado Springs is on the higher side of average for cost of living, but across from the Academy is definitely on the high side unless you're living in a small townhouse.   I wonder where in the city she works? That bit about "conservative" (which is debatable) Colorado Springs and some pastor who got caught being naughty had absolutely shit to do with her financial situation and story.

The rest of the examples I just flipped through. That was a long read. I find myself circling back my original question. What was the point here? Some people financially struggle? While most of the folks in the article don't make much, a number seem to be doing okay.

Tasty Pinecones

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Re: NYTimes - basing life on what you can afford
« Reply #9 on: March 20, 2017, 05:36:14 PM »
An article for people commiserating about having debt? (i.e. we're all in this together...)

Villanelle

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Re: NYTimes - basing life on what you can afford
« Reply #10 on: March 21, 2017, 02:33:09 AM »
The one dude has a degree in engineering, but rather than get a job with that he's trying to build up a freelance photography business. I mean, follow your dreams and all, but maybe do that on the side while working as an engineer?

How do U.S. veterans have student loan debt?

There are very, very few programs that repay loan debt for service members.  So anyone who went to college and then enlisted or accepted a commission would have the same student loan problems as a civilian. 

There are ways to get your degree paid for, though they can be pretty competitive, but that is while you are actually getting the degree, or while you are active duty and pursing a degree.  And there are programs that pay tuition for vets after they get out, but none of those help at all if someone goes to college on their own dime before any military affiliation. 

(I'm not excusing the couple from the article, but the student loan debt is no more unusual than anyone else having student loan debt.)

Warlord1986

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Re: NYTimes - basing life on what you can afford
« Reply #11 on: March 21, 2017, 06:31:04 AM »
The one dude has a degree in engineering, but rather than get a job with that he's trying to build up a freelance photography business. I mean, follow your dreams and all, but maybe do that on the side while working as an engineer?

How do U.S. veterans have student loan debt?

There are very, very few programs that repay loan debt for service members.  So anyone who went to college and then enlisted or accepted a commission would have the same student loan problems as a civilian. 

There are ways to get your degree paid for, though they can be pretty competitive, but that is while you are actually getting the degree, or while you are active duty and pursing a degree.  And there are programs that pay tuition for vets after they get out, but none of those help at all if someone goes to college on their own dime before any military affiliation. 

(I'm not excusing the couple from the article, but the student loan debt is no more unusual than anyone else having student loan debt.)

Huh. I seem to recall some stuff about tuition debt repayment plans back when I was in, but maybe I'm misremembering.

Either way, that particular couple should be set to pay off their debt and lead a very good life. I'm side-eyeing them.

Hargrove

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Re: NYTimes - basing life on what you can afford
« Reply #12 on: March 21, 2017, 05:26:32 PM »
An article for people commiserating about having debt? (i.e. we're all in this together...)

It's a lot more complicated than that. But it doesn't tell you what to think, which I would call a strength of the article - if it told you what conclusion it wanted from you, it would probably be dismissed by people who didn't already subscribe.

It's a slice of working Americans. As for "why"... why should it be surprizing? If this were about celebrities, nobody would be asking what it's for.  It's a story about people struggling to make ends meet, most near median incomes. By Mustachian standards, these people are not trying very hard. The only luxury was a (snort) Jeep Commander and a massive home entertainment system...? But by American standards, that's a telling portrait of median-income life that was very different in decades past. So whether you sympathize or not, there is a factual change in what median income does. There is also an apparent undervaluing of people many consider community pillars. Social workers, teachers who do the hard assignments because they want their work to matter...

On the one hand, we say doctors need to be good so they need to be well paid, then we say teachers should just love their work.

The point of the article may be in part getting you to ask the point of the article. :p

cheapass

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Re: NYTimes - basing life on what you can afford
« Reply #13 on: March 22, 2017, 08:09:16 AM »
I know I take things too literally but I looked at the headline 'Basing life on what you can afford' and I thought, well, that's reality.  For most people anyway.  I also make the median income and very recently my salary went a little above.  I can't just spend, spend, spend and I have to make choices.   

I think it all comes down to what the individual's philosophy of "afford" is. Most people use a "top down" approach and scale their spending based on their income, i.e. I earn $3,000 a month so I'll spend the MAXIMUM amount I can on rent/mortgage, see if I can fit a car payment in there too even though I don't need a car, oh hey that new iphone looks fancy and I have a few extra bucks... why not, I can "afford" it!

Whereas the mustachian approach is typically more of a "bottom up" approach to budgeting. Start at zero, add on as little spending as possible (while maintaining happiness and sanity), thus leaving more of a spread between income and expenses and more $$ to invest.

jinga nation

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Re: NYTimes - basing life on what you can afford
« Reply #14 on: March 22, 2017, 10:20:05 AM »
The problem is that instead of basing life on what one can "afford", people base it on what they can afford in the future. And that future income is always assumed to be significantly higher than present income.

And based on false inputs, people go into debt.
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pachnik

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Re: NYTimes - basing life on what you can afford
« Reply #15 on: March 22, 2017, 10:56:43 AM »
I know I take things too literally but I looked at the headline 'Basing life on what you can afford' and I thought, well, that's reality.  For most people anyway.  I also make the median income and very recently my salary went a little above.  I can't just spend, spend, spend and I have to make choices.   

I think it all comes down to what the individual's philosophy of "afford" is. Most people use a "top down" approach and scale their spending based on their income, i.e. I earn $3,000 a month so I'll spend the MAXIMUM amount I can on rent/mortgage, see if I can fit a car payment in there too even though I don't need a car, oh hey that new iphone looks fancy and I have a few extra bucks... why not, I can "afford" it!

Whereas the mustachian approach is typically more of a "bottom up" approach to budgeting. Start at zero, add on as little spending as possible (while maintaining happiness and sanity), thus leaving more of a spread between income and expenses and more $$ to invest.

You know before I found this website, I was more "top down" in my approach to spending.  Maximum frittering away was my thing.  I kept rent/mortgage low, car stuff low and then spent the difference on little odds and ends.   To my credit, I did stay out of debt though and never had any credit card debt.   Then four years ago, I came across MMM and decided to try it.  I now feel huge satisfaction in not being a consumerist sucka and investing the difference rather than frittering it away.  Now I am saving about 40% of my income whereas before I saved maybe 15%. 

AMandM

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Re: NYTimes - basing life on what you can afford
« Reply #16 on: March 22, 2017, 11:33:13 AM »
Based on the other stories that get shared on the Wall of Shame and Comedy, lots of people never think about their spending at all in terms of choices.  I took this article as a snapshot of several families that are making choices in a slightly more conscious way--trading more salary for time with kids, trading savings for current experiences, etc.

paddedhat

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Re: NYTimes - basing life on what you can afford
« Reply #17 on: March 22, 2017, 04:21:50 PM »
The one dude has a degree in engineering, but rather than get a job with that he's trying to build up a freelance photography business. I mean, follow your dreams and all, but maybe do that on the side while working as an engineer?

How do U.S. veterans have student loan debt?
They also receive 48K per year in disability payments... $48k!!!  Holy cow!  Really sounds like someone is living too large...

And they've got their healthcare covered through the VA; I don't understand how they aren't in a much, much better financial situation.

Unfortunately, that's how most people in the military are.  Come out of the gate young and into an aggressive field and mentality of work hard/ play hard.  The job security allows you to get easy loans from the banks for fancy cars and big houses.  It's definitely a culture thing.  Some people grow out of it, but others stay that way their whole lives and work multiple careers (with the pensions) and still can't make ends meet.
Jesus, you just described one of my kid's MIL&FIL.  They are sixtyish, both did their 20 in the services, are on second and third careers, and broke. So broke they had to steal cash from their son's student loan to keep the wolves at bay. Not broke enough to give a single thought to the fact that they live in a trophy house in a gated high end community, lease a new $50K  eurotrash mobile, or "LOVE" to travel.  When it comes to rational adult financial decision making, they are just a giant basket of WTFs.  At some point it seems like "be all you can be" morphed into " borrow all you can get"