Author Topic: Am I the weirdo?  (Read 8545 times)

FireLane

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Am I the weirdo?
« on: May 23, 2016, 05:59:51 PM »
Helaine Olen has a series on Slate about debt in America. There's a transcript you can read:

http://www.slate.com/articles/business/the_united_states_of_debt/2016/05/the_united_states_of_debt_episode_2_transcript_for_slate_plus_members.html

Some of this spending, I get. If you're a single mother and you have to drain your savings to afford the security deposit on an apartment, you may have to use the plastic to buy groceries and other stuff for a few months. Those are the times that make it really useful to be able to borrow from yourself like that.

But then there are the couples who are both professionals, who earn $200,000 a year between them and still have five figures of credit card debt! I mean, how? What could you possibly want that you have to spend that much on yourself? I literally can't imagine it. I don't think I could spend that much if I tried. These stories sound like an addiction, like the lab rat that keeps pushing the button to get another hit of cocaine.

I've never been in credit card debt, even before I discovered MMM. I'm not saying that I'm super-smart or super-thrifty or anything, it's just that I've never felt the temptation to spend money I didn't have. To me, that seems like the most normal thing in the world. But from reading these stories, or the statistics about the number of people who make the minimum payment each month or who couldn't come up with $400 if they tried, I can't help feeling like I'm the weirdo.

Why do so many people find it so easy to get into debt blowing their money on crap and I don't? Is the Mustachian attitude something you learn, or does it come down to how your brain is wired?

Bracken_Joy

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Re: Am I the weirdo?
« Reply #1 on: May 23, 2016, 06:09:06 PM »
I know my brother carried 5 figure CC debt for a while in spite of working a professional job (~$75k/yr?) because he did two cross-country moves within 5 years. He was an idiot insofar as he didn't negotiate relocation either time, and he hired expensive moving crews to move all his stuff- no minimizing or selling and re-buying or anything.

Anyway, you asked how, so here is one data point on someone sans shopping addition =)

mm1970

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Re: Am I the weirdo?
« Reply #2 on: May 23, 2016, 06:52:39 PM »
slate plus members only...can't read it?

FireLane

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Re: Am I the weirdo?
« Reply #3 on: May 23, 2016, 07:44:52 PM »
slate plus members only...can't read it?

The transcript is there on the page, just hidden behind a pop-up. I use Firefox with the NoScript add-on and I can see the whole thing.

mpg350

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Re: Am I the weirdo?
« Reply #4 on: May 23, 2016, 07:48:25 PM »
Your not weirdo they are the weirdos.  I dont know how you can spend money you dont have. 
Ive never viewed a CC as way to buy crap I use as a charge card and I pay it off every month except maybe a few when I was 22..now 36.

MgoSam

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Re: Am I the weirdo?
« Reply #5 on: May 23, 2016, 09:17:47 PM »
Your not weirdo they are the weirdos.  I dont know how you can spend money you dont have. 
Ive never viewed a CC as way to buy crap I use as a charge card and I pay it off every month except maybe a few when I was 22..now 36.

I use it primarily because it is so much easier for odd amounts, like when you are rang up and it comes to "22.36." I pay off my credit card each month, plus the amounts can be recorded in something like Mint so it's easier to keep track of your expenses.

Magilla

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Re: Am I the weirdo?
« Reply #6 on: May 24, 2016, 08:58:17 AM »
It's really not that hard to imagine.  Doesn't mean it's right but it's not hard to imagine.  I'll give you an example of ~$200K family income that I know have a huge amount of debt and how they got there: my brother and his wife
- lots of student loans
- miserable job you hate with long commute (my brother -- leads to a lot of "I deserve" this moments)
- 3 kids
- daycare & part time nanny (1st kid had nanny first, then as the other kids came they were a mix of daycare and nanny)
- private school (cause you know you're a bad parent otherwise)
- Whole Foods organic groceries (cause you know you're a bad parent otherwise -- when I pointed out you can get organic groceries a lot cheaper at other stores I got a defensive lecture on how hard it is to shop at multiple stores with 3 kids)
- bigger "safer" car (cause don't you want the safest car for your kids -- and really this is BS here as they went for an Infinity SUV which is no safer than the non-luxury equivalent)
- etc

The worst part is that they do not want help or advice on financial matters (or other matters).  Any suggestion that does runs counter to what they do is met extremely defensively.  I got so tired of hearing "you don't understand because you have no kids etc" that I don't even bother anymore (and this was usually in response to suggestions that would literally take less than 30 mins and save them lots of money like signing up for Dependent Savings Account which they have never done because they don't have time to look into that!!!).

fattest_foot

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Re: Am I the weirdo?
« Reply #7 on: May 24, 2016, 09:23:45 AM »
I was thinking a quick way to run up credit card debt would be buying a house.

First, we'll assume you're an average American and are buying a house that's way too big; 2500+ square feet. We're not including the mortgage here though.

But what we do need is to fill this house up. We've probably got 4 or 5 bedrooms, 2+ bathrooms, and a gigantic kitchen. Oh, don't forget that we might have a living room, den, "man cave," and garage.

So let's buy a few beds, maybe a desk for a spare bedroom "office," nightstands for every bed, dressers, kitchen gadgets (highest end Kitchenaid mixer, one of those $300+ blenders, fancy coffee maker/bean grinder/etc, toasters, knives, matching dish sets, matching dish towels...this list goes on forever really), garage storage, dining sets (possibly two if there's an eat in kitchen; bar stools?), and we're going to need TV's for every single room. Couches and tables for those two living spaces are a must, as well as likely some entertainment centers. Heck, throw in a receiver and speakers because we're sure as hell going to need 7 channel surround sound. Oh, and because HGTV said so, we've definitely got a massive walk in closet. We'll need to fill that up with clothes.

We've also probably got a massive yard, and a zero turn mower would make quick work of those (a push mower would take way too long, and god forbid you used a reel mower; side note, we use a reel mower and my wife doesn't like to use it for the front yard because she thinks our neighbors are judging us). A weed eater, hedge trimmer and chainsaw are probably going to be new purchases as well, because you never know. And really, we're amassing lots of tools here, so we probably should go ahead and buy a table saw, miter saw, circular saw, drill, router, a wrench set, clamps, sander, etc (I'm not saying it's bad to own these, by the way) that we can throw in the garage "shop" (read: corner).

You can see where I'm going with this. And who's got cash for all of this clutter for your house? Congratulations, you've amassed 5 figures of credit card debt.

HairyUpperLip

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Re: Am I the weirdo?
« Reply #8 on: May 24, 2016, 09:55:07 AM »
.

lol, sounds spot on to me.

Add in the cars, the outside food/drinks, etc. Easssy.

I'm personally very happy that my house was very little decor at all. I cringe when I walk into someone's house and see some stupid wood block letters spelling out LOVE, FAITH, HOME, etc. Hate those things. haha

CheapskateWife

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Re: Am I the weirdo?
« Reply #9 on: May 24, 2016, 10:31:33 AM »
slate plus members only...can't read it?

The transcript is there on the page, just hidden behind a pop-up. I use Firefox with the NoScript add-on and I can see the whole thing.

I love the irony that you have to be a paying subscriber to read about the "United States of Debt."  Clearly Slate really isn't that concerned about the spending habits of its readers (or the rest of us for that matter).

FIREwoman

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Re: Am I the weirdo?
« Reply #10 on: May 24, 2016, 10:59:13 AM »
i'm not the brightest bulb to begin with and i was raised primarily by a non college-educated mother who was terrible with finances.  she was shocked (shocked i tell you!) when she learned she couldn't file for bankruptcy again after having had declared it less than 2 years prior...

we are VERY similar (which scares the ever-loving shit out of me) and were close then, but i started to "see" things clearly in my later teens. around the time she "met" some guy who was in a state prison and ended up marrying him. we had to move in with her parents after my parents divorced several years earlier. her mother had passed years earlier and her father was in the mid to last stages of alzheimer's. she'd pay the phone bill ($600+ per MONTH for collect calls from state prisons) out of my gramps's (gramps'?)checkbook. FUCKING NO.

needless to say, due to about 85% stupidity and 15% circumstance, i ended with a shit-tonne of consumer debt. i paid it off 2 years ago and could live for probably 2 years now if i lost my job. i don't even remember exactly what sparked a change in me. i was literally *unaware* that there was anything else (my own stupid, sheltered fault). but i am SO thankful i did. i could unfortunately easily see myself on the same track as her. her parents had built a good life for themselves. i don't know where the disconnect comes from.

VaCPA

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Re: Am I the weirdo?
« Reply #11 on: May 24, 2016, 11:26:48 AM »
I've never been in credit card debt, even before I discovered MMM. I'm not saying that I'm super-smart or super-thrifty or anything, it's just that I've never felt the temptation to spend money I didn't have. To me, that seems like the most normal thing in the world. But from reading these stories, or the statistics about the number of people who make the minimum payment each month or who couldn't come up with $400 if they tried, I can't help feeling like I'm the weirdo.

Why do so many people find it so easy to get into debt blowing their money on crap and I don't? Is the Mustachian attitude something you learn, or does it come down to how your brain is wired?

It seems really normal because that's your reality, but lots of people don't look at credit cards the same way. My wife had a large amount of credit card debt when we began dating and her big thing was just make the monthly payment. In terms of paying it down I don't really think she cared. She didn't look at the interest she was paying as a bad thing, probably didn't look at it at all. Some people are just wired differently. A lot of it came from her upbringing where her parents were the same way. They admittedly didn't have much money when she was growing up so it's easy for me to criticize them while my parents put me through college and I've always had good paying jobs to help me manage my debt. I think her parents did the best they could but unfortunately they didn't instill good spending habits in their kids. I also think she spent so freely with the credit cards because she grew up somewhat poor and just enjoyed having nice things for once.
« Last Edit: May 24, 2016, 11:29:23 AM by anorman79 »

Mr. Green

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Re: Am I the weirdo?
« Reply #12 on: May 24, 2016, 01:05:26 PM »
Because it's viewed as free money. People don't understand the consequence of the debt until it's too late, and even then it's easy to rationalize spending five figures and only having to pay 1% back each month. The total doesn't isn't considered, just what the monthly payment is.

AlwaysLearningToSave

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Re: Am I the weirdo?
« Reply #13 on: May 24, 2016, 01:40:18 PM »
Because it's viewed as free money. People don't understand the consequence of the debt until it's too late, and even then it's easy to rationalize spending five figures and only having to pay 1% back each month. The total doesn't isn't considered, just what the monthly payment is.

I think you nailed it. 

It all comes out of a primitive view of money and not understanding how debt works.  The balance sheet is a very basic accounting concept but something that I would bet most Americans have never encountered.  If your understanding of money only involves the asset side of the balance sheet (i.e., checking the bank account to see how much money you have), you will end up with screwed up finances.  I also think this is a BIG source of danger with student loans... you get a big deposit of cash in your bank account at the beginning of the semester but the debt side of the balance sheet is out of sight, out of mind, and easily forgotten.  Students spend like they have money because they actually think they do! 

Credit cards are a little less understandable to me because you get a monthly reminder of how much you owe but the concept is the same.  If you pay the minimum payment the creditor is happy and bank account says that you still have money-- even though the balance sheet says you don't. 

I think a lot of people literally have no idea that they are doing it wrong.  I think they have good intentions but they lack a basic understanding of finance and they don't know that they lack the basic understanding.  I feel sorry for them and disappointed that our educational systems don't teach these concepts to everyone.  It's one thing if people know better and still make poor choices.  It's another thing entirely when they don't know any better.

MgoSam

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Re: Am I the weirdo?
« Reply #14 on: May 24, 2016, 01:57:52 PM »
^^^^ I think you're absolutely correct. It's like buying a car, for too many people they only look at the car payment and see if that works for them, the idea of paying off the car is not considered, and I can see finance departments extending out loans so as to minimize monthly payments, as they are more likely to get people to buy them.

slugline

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Re: Am I the weirdo?
« Reply #15 on: May 24, 2016, 02:12:29 PM »
Why do so many people find it so easy to get into debt blowing their money on crap and I don't? Is the Mustachian attitude something you learn, or does it come down to how your brain is wired?

Spending oneself into debt is easy for someone who has not learned to care for or take into consideration his or her Future Self. If you only think about Present Self, then a credit line is as good as cash and it's only logical to spend any windfalls or inflate one's lifestyle with every pay raises. The change in attitude typically comes when Future Self is finally considered to be a real person that will actually be arriving.

Beaker

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Re: Am I the weirdo?
« Reply #16 on: May 24, 2016, 02:21:22 PM »
... and we're going to need TV's for every single room.

I've got a rant elsewhere on the site about a pair of rental applicants with bad credit. Short version, he had declared bankruptcy and then run multiple accounts into collections, she had $20k credit card debt and some other debt besides.

The only thing they didn't about the apartment like was that it only had cable in the living room and first bedroom. Apparently they really needed cable in *all* the rooms of that 850 sqft apartment. He wanted to pay the cable company to install it - he seemed kind of amazed when I pointed out that 10' of coax cable running along a baseboard would do the trick.

Gotta have your priorities, I guess...

AM43

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Re: Am I the weirdo?
« Reply #17 on: May 25, 2016, 10:47:35 AM »
Because it's viewed as free money. People don't understand the consequence of the debt until it's too late, and even then it's easy to rationalize spending five figures and only having to pay 1% back each month. The total doesn't isn't considered, just what the monthly payment is.

I think you nailed it. 

It all comes out of a primitive view of money and not understanding how debt works.  The balance sheet is a very basic accounting concept but something that I would bet most Americans have never encountered.  If your understanding of money only involves the asset side of the balance sheet (i.e., checking the bank account to see how much money you have), you will end up with screwed up finances.  I also think this is a BIG source of danger with student loans... you get a big deposit of cash in your bank account at the beginning of the semester but the debt side of the balance sheet is out of sight, out of mind, and easily forgotten.  Students spend like they have money because they actually think they do! 

Credit cards are a little less understandable to me because you get a monthly reminder of how much you owe but the concept is the same.  If you pay the minimum payment the creditor is happy and bank account says that you still have money-- even though the balance sheet says you don't. 

I think a lot of people literally have no idea that they are doing it wrong.  I think they have good intentions but they lack a basic understanding of finance and they don't know that they lack the basic understanding.  I feel sorry for them and disappointed that our educational systems don't teach these concepts to everyone.  It's one thing if people know better and still make poor choices.  It's another thing entirely when they don't know any better.

^^^^^^^THIS
Well said.

MgoSam

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Re: Am I the weirdo?
« Reply #18 on: May 25, 2016, 10:53:27 AM »
Because it's viewed as free money. People don't understand the consequence of the debt until it's too late, and even then it's easy to rationalize spending five figures and only having to pay 1% back each month. The total doesn't isn't considered, just what the monthly payment is.

I think you nailed it. 

It all comes out of a primitive view of money and not understanding how debt works.  The balance sheet is a very basic accounting concept but something that I would bet most Americans have never encountered.  If your understanding of money only involves the asset side of the balance sheet (i.e., checking the bank account to see how much money you have), you will end up with screwed up finances.  I also think this is a BIG source of danger with student loans... you get a big deposit of cash in your bank account at the beginning of the semester but the debt side of the balance sheet is out of sight, out of mind, and easily forgotten.  Students spend like they have money because they actually think they do! 

Credit cards are a little less understandable to me because you get a monthly reminder of how much you owe but the concept is the same.  If you pay the minimum payment the creditor is happy and bank account says that you still have money-- even though the balance sheet says you don't. 

I think a lot of people literally have no idea that they are doing it wrong.  I think they have good intentions but they lack a basic understanding of finance and they don't know that they lack the basic understanding.  I feel sorry for them and disappointed that our educational systems don't teach these concepts to everyone.  It's one thing if people know better and still make poor choices.  It's another thing entirely when they don't know any better.

^^^^^^^THIS
Well said.

I agree, but I don't really think it's the educational system's fault. I'm sick of everyone blaming it on their schooling. I highly doubt there are many people here that learned how to manage finances from school. Instead we learned it from observing or from our upbringing.

I know that my situation isn't typical, but my mom refused to teach me how to cook for the longest time (old school Indian women), so I asked around and slowly taught myself. I'm nowhere near a good cook, but I find what I make edible and that's good enough for me. The same goes with fixing things, my parents were of the school-of-thought of just paying someone to fix things around the house, I would shadow him when he came to learn what I could and now I do things. I remember getting a pullbar bar and being unable to figure out how to attach it to the door, my dad took literally one look at it and said, "I'll call ____." But yet, I played with it and figured it out.

BlueHouse

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Re: Am I the weirdo?
« Reply #19 on: May 25, 2016, 01:42:02 PM »
I think there is often a psychological aspect to it.  There is usually some "hole" or "void" that people are trying to fill with material items.  Maybe it's trying to be "good enough" by keeping up with the Joneses, or maybe it's loneliness and a desire to do something (go shopping) after work, or maybe it's keeping yourself occupied with home improvement / redecorating projects so you don't feel whatever it is that you're avoiding. 
Most members of my family overspend and have no idea they're doing it. 

Aunt - Hates her husband, but has every "cutesy" home decorative item you could imagine.  When you go to a store with her, she searches until she likes something enough to buy it, then tries to figure out "where can I use that?"  Thank goodness she has a beach house because there's always room for something new there.

SIL 1 -  Goes shopping as a hobby.  Where other people play tennis, golf, make things, travel, her only hobby has ever been shopping.  What does she want to do on the weekend?  She WANTS to go shopping. It is fun and interesting to her.  Brand identity is important.

SIL 2 -  I'm pretty sure she's using spending money as a way to punish her husband and to assert some control.  And her husband does it right back.  He constantly keeps the credit cards maxed out because he says it's the only way to stop her spending.  She clearly feels that she doesn't have much say about anything because she is not the financial breadwinner.  She wants some autonomy in decision-making and he won't give it.  Divorce is very likely.

Mother - desperate to be loved and appreciated and will spend what it takes to please people.  The good news is that she can often attain this with food.  But it also means that she grossly overbuys everything.  Spends hundreds of dollars each week at a farmers' market and then brings her kids extra fruit because it will go bad if she doesn't share it. 

BIL 1 - Seems to be somewhat embarrassed by the fact that although he's in a high-paying profession, he himself has never earned a high salary.  His weakness is luxury travel, great wine, expensive vacations, golf club membership, etc.  He loves it when someone asks his wife "what does your husband do".  She has out-earned him by over 5X his highest paying year for the 20 years they've been married.  So I think he has a bit of inferiority complex.

blue - desire to fill a void / loneliness.  Sometimes go out to shop to avoid going home to an empty house. 

That's my take on it.  Sure, better understanding of finances can help stem the flow of money, but in terms of actually stopping the madness, there's something else going on beneath the surface. 


BTDretire

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Re: Am I the weirdo?
« Reply #20 on: May 25, 2016, 02:16:16 PM »
Last night, O'reilly's 'talking points' was about "the change in how Americans view money."
It started with, "Now on to you. A new poll by the Associated Press says that two thirds of American adults would have difficulty coming up with money to cover a one thousand dollar emergency expense.

75% of Americans making less than $50,000 dollars a year say they would have trouble with that."

Worth a read.  As youmay know, he's looking out for us! :-)
https://www.billoreilly.com/b/Tuesdays-Memo:-Americans-and-Money/634311932264958272.html

jinga nation

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Re: Am I the weirdo?
« Reply #21 on: May 25, 2016, 02:46:32 PM »
Who knew, Bill O'Reilly is a closet Mustachian. (Hat Tip)

rocklebock

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Re: Am I the weirdo?
« Reply #22 on: May 25, 2016, 04:49:13 PM »
Helaine Olen has a series on Slate about debt in America. There's a transcript you can read:

http://www.slate.com/articles/business/the_united_states_of_debt/2016/05/the_united_states_of_debt_episode_2_transcript_for_slate_plus_members.html

But then there are the couples who are both professionals, who earn $200,000 a year between them and still have five figures of credit card debt! I mean, how? What could you possibly want that you have to spend that much on yourself? I literally can't imagine it. I don't think I could spend that much if I tried. These stories sound like an addiction, like the lab rat that keeps pushing the button to get another hit of cocaine.


For the couple I knew in this situation, it wasn't that they didn't understand credit cards and debt. It was basically a poor grasp of their cash flow, compounded by a shit-ton of law school debt, buying a big expensive condo, and constant cross-country travel to visit family. Theoretically they could afford all this stuff, just not all at once. They did finally knuckle down and pay off the student loans.

accountingteacher

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Re: Am I the weirdo?
« Reply #23 on: May 25, 2016, 05:56:31 PM »
The worst part is that they do not want help or advice on financial matters (or other matters).  Any suggestion that does runs counter to what they do is met extremely defensively.  I got so tired of hearing "you don't understand because you have no kids etc" that I don't even bother anymore (and this was usually in response to suggestions that would literally take less than 30 mins and save them lots of money like signing up for Dependent Savings Account which they have never done because they don't have time to look into that!!!).

What I hate about that defence (which I also get a lot) is the failure to recognize that, in 2016, having kids is a CHOICE.  And no, I'm not saying that only wealthy people should have kids.  But kids aren't an entitlement, either, insofar as there will be financial consequences and trade offs that result from their arrival.

FireLane

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Re: Am I the weirdo?
« Reply #24 on: May 25, 2016, 07:42:50 PM »
I think a lot of people literally have no idea that they are doing it wrong.  I think they have good intentions but they lack a basic understanding of finance and they don't know that they lack the basic understanding.  I feel sorry for them and disappointed that our educational systems don't teach these concepts to everyone.  It's one thing if people know better and still make poor choices.  It's another thing entirely when they don't know any better.

I agree with this 100%. Before I discovered MMM, I knew next to nothing about money and investing. The world of FIRE has been a huge eye-opener for me, and I'm still learning.

I'd definitely be in favor of more financial education in schools. Another good idea I've heard is "nudging" workers into doing the right thing, like setting the 401(k) to automatic deduction and forcing people to make an intentional choice to opt-out.

Mr. Green

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Re: Am I the weirdo?
« Reply #25 on: May 26, 2016, 09:20:33 AM »
I agree, but I don't really think it's the educational system's fault. I'm sick of everyone blaming it on their schooling. I highly doubt there are many people here that learned how to manage finances from school. Instead we learned it from observing or from our upbringing.

I know that my situation isn't typical, but my mom refused to teach me how to cook for the longest time (old school Indian women), so I asked around and slowly taught myself. I'm nowhere near a good cook, but I find what I make edible and that's good enough for me. The same goes with fixing things, my parents were of the school-of-thought of just paying someone to fix things around the house, I would shadow him when he came to learn what I could and now I do things. I remember getting a pullbar bar and being unable to figure out how to attach it to the door, my dad took literally one look at it and said, "I'll call ____." But yet, I played with it and figured it out.
Our education system doesn't teach it because we, as a society, don't value it enough to have it taught. It absolutely should be taught. Not derivatives or wall street type stuff but the basics. I my opinion, the practical importance it has in your life is one step below math, reading, and writing, and a step above every other subject you learn. I think of it like the 2016 version of illiteracy, just financial illiteracy. The economic benefit to the country would rival any other societal advancement ever made.

MgoSam

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Re: Am I the weirdo?
« Reply #26 on: May 26, 2016, 10:57:39 AM »
I agree, but I don't really think it's the educational system's fault. I'm sick of everyone blaming it on their schooling. I highly doubt there are many people here that learned how to manage finances from school. Instead we learned it from observing or from our upbringing.

I know that my situation isn't typical, but my mom refused to teach me how to cook for the longest time (old school Indian women), so I asked around and slowly taught myself. I'm nowhere near a good cook, but I find what I make edible and that's good enough for me. The same goes with fixing things, my parents were of the school-of-thought of just paying someone to fix things around the house, I would shadow him when he came to learn what I could and now I do things. I remember getting a pullbar bar and being unable to figure out how to attach it to the door, my dad took literally one look at it and said, "I'll call ____." But yet, I played with it and figured it out.
Our education system doesn't teach it because we, as a society, don't value it enough to have it taught. It absolutely should be taught. Not derivatives or wall street type stuff but the basics. I my opinion, the practical importance it has in your life is one step below math, reading, and writing, and a step above every other subject you learn. I think of it like the 2016 version of illiteracy, just financial illiteracy. The economic benefit to the country would rival any other societal advancement ever made.

Fair enough. Is this what 'Home ed' classes taught? I remember hearing about them, but don't know what all they taught.

I do agree that society would be better off is schools taught kids basic financial literacy, but the reason I posted what I did is that I hate when people have the attitude, "Well my school didn't teach me this." Schooling does teach kids how to do basic math which with a little curiosity can help someone understand APR, but I don't know....if an adult doesn't understand something about personal finances and isn't willing to ask or look it up on Google, I don't think there's any amount of schooling in the world that can help them.

golden1

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Re: Am I the weirdo?
« Reply #27 on: May 26, 2016, 12:55:40 PM »
In my case, part of my reason for getting into credit card debt was a perverted sense of what a middle class lifestyle "should" be based on my parent's horrible spending habits.  My mom and stepfather had fancy houses and cars and unbeknownst to me, were horribly in debt.  So I grew up thinking this level of spending vs. income was "normal" and I didn't see the downsides to all this debt spending.  That came later when my parents ended up broke and desperate and begging me for money.  I also had an inheritance when I was in my 20's that further put my expectations out of whack.  I didn't waste it all, but I spent far too much on a new car and fancy vacations and just frittering it away on impulse purchases.  When that money ran out, it took me longer than it should have to readjust my spending to reality.  The debt I got into wasn't terrible - low five figures, and it accumulated over a few years.  No excuses really, but people learn habits from what they experience in their lives. 

I still fight these spending impulses all the time.  You are lucky that you never felt the impulse to spend. 

AlwaysLearningToSave

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Re: Am I the weirdo?
« Reply #28 on: May 26, 2016, 01:22:13 PM »
Fair enough. Is this what 'Home ed' classes taught? I remember hearing about them, but don't know what all they taught.

I do agree that society would be better off is schools taught kids basic financial literacy, but the reason I posted what I did is that I hate when people have the attitude, "Well my school didn't teach me this." Schooling does teach kids how to do basic math which with a little curiosity can help someone understand APR, but I don't know....if an adult doesn't understand something about personal finances and isn't willing to ask or look it up on Google, I don't think there's any amount of schooling in the world that can help them.

The problem I have that is that it is so difficult to good financial advice that is not jaded by someone else's interests.  Sure, school teaches basic math competency, which is the foundation to understanding finances and curiosity can lead someone to google in a quest for a better understanding.  But what they find when they get there is an overwhelming supply of information, much of it misinformation.

I consider myself very lucky to have discovered MMM.  I was always somewhat frugal but I always saw frugality as being borne out of necessity.  When I started to earn good money, my lifestyle inflated.  I'm lucky I didn't abuse credit.  Then, when I became eligible for a 401(k) for the first time, I asked a co-worker who is a mostly-retired, very part-time SWAMI about investing.  My first piece of luck was being acquainted to such an individual.  He was the first person to tell me about Vanguard and the first who ever voiced the possibility of saving 30 to 50% of your income.  At the time, I thought he was crazy and that it was impossible to save that much.

Then I tried to research retirement savings and sifted through a whole lot of the conventional wisdom of saving 10 to 15% of your income and aiming to have 70 to 80% of pre-retirement income.  It was all somewhat helpful but it never quite added up for me.  One day I stumbled upon MMM through the comments on an article from a major news website peddling poor financial advice.  It was only through that happenstance that I finally found something that connected the concepts of frugality, index investing, and a questioning of mainstream materialism/consumerism. 

I very easily could have never found good financial advice and wisdom.  I could have very easily ended up in the hands of a friendly financial advisor or investment broker or worse.  But through unique training, fortunate connections, and an unusual level of curiosity I eventually found the light.  That is why I have compassion for the many people out there who want to do the right thing financially but don't have the personal connections, don't have the advanced education, and never learn the basics of sound personal finance. 

Reynold

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Re: Am I the weirdo?
« Reply #29 on: May 26, 2016, 02:15:40 PM »
If you naturally, at least after having heard about it, can see why it makes sense to have a frugal lifestyle and save for early retirement and/or emergencies, it is indeed hard to see why other people just don't get it. 

A couple who are friends of ours were going through a store with us one day, and they saw a copy of Nortons Antivirus/Firewall in an "impulse buy" bin for $80, and grabbed it for their next update.  My wife said "I usually find that for $10 or less when I bargain hunt, do you want me to get one for you too?"  "No, we might as well just get it here, it is more convenient."   Neither one likes leftovers, so if they get a takeout pizza, what is left gets thrown away.  They are smart people, who have almost had to declare bankruptcy on several occasions, and still struggle financially.  They have even talked a bit with us about having us go over their finances, but I think they are embarrassed that they don't actually know what they spend on what.  Unfortunately, neither of them likes to say no to the other. 

We have many friends and co-workers like this, so apparently, yes, everyone here at MMM is a weirdo. :) 

Conversely, I've recently seen a couple of articles in the Wall Street Journal (pretty affordable if you only subscribe when you get a "new subscriber" mailing) where there were complaints about frugal people.  In one case, it was new online loan companies who were targeting ivy league school graduates, and undercutting others on school loans.  Apparently these students had the nerve to, on average, pay back their loans sooner than they were supposed to, making the repackaged loans less valuable.  In another case, some retailers (as well as the federal reserve) were unhappy with people saving too much and not spending enough.  So possibly we are becoming SLIGHTLY less weird. . .

MgoSam

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Re: Am I the weirdo?
« Reply #30 on: May 26, 2016, 02:36:29 PM »
Fair enough. Is this what 'Home ed' classes taught? I remember hearing about them, but don't know what all they taught.

I do agree that society would be better off is schools taught kids basic financial literacy, but the reason I posted what I did is that I hate when people have the attitude, "Well my school didn't teach me this." Schooling does teach kids how to do basic math which with a little curiosity can help someone understand APR, but I don't know....if an adult doesn't understand something about personal finances and isn't willing to ask or look it up on Google, I don't think there's any amount of schooling in the world that can help them.

The problem I have that is that it is so difficult to good financial advice that is not jaded by someone else's interests.  Sure, school teaches basic math competency, which is the foundation to understanding finances and curiosity can lead someone to google in a quest for a better understanding.  But what they find when they get there is an overwhelming supply of information, much of it misinformation.

I consider myself very lucky to have discovered MMM.  I was always somewhat frugal but I always saw frugality as being borne out of necessity.  When I started to earn good money, my lifestyle inflated.  I'm lucky I didn't abuse credit.  Then, when I became eligible for a 401(k) for the first time, I asked a co-worker who is a mostly-retired, very part-time SWAMI about investing.  My first piece of luck was being acquainted to such an individual.  He was the first person to tell me about Vanguard and the first who ever voiced the possibility of saving 30 to 50% of your income.  At the time, I thought he was crazy and that it was impossible to save that much.

Then I tried to research retirement savings and sifted through a whole lot of the conventional wisdom of saving 10 to 15% of your income and aiming to have 70 to 80% of pre-retirement income.  It was all somewhat helpful but it never quite added up for me.  One day I stumbled upon MMM through the comments on an article from a major news website peddling poor financial advice.  It was only through that happenstance that I finally found something that connected the concepts of frugality, index investing, and a questioning of mainstream materialism/consumerism. 

I very easily could have never found good financial advice and wisdom.  I could have very easily ended up in the hands of a friendly financial advisor or investment broker or worse.  But through unique training, fortunate connections, and an unusual level of curiosity I eventually found the light.  That is why I have compassion for the many people out there who want to do the right thing financially but don't have the personal connections, don't have the advanced education, and never learn the basics of sound personal finance.

You're absolutely right. I hope none of my responses come across as argumentative. I consider myself very fortunate to have found MMM. It's funny, the friend that introduced me to MMM is not a Mustachian*, and I had to educate on what mutual funds are and the difference between them and index funds. Had it not been for that, I likely wouldn't be in such a good financial position (though I was somewhat frugal beforehand).

*She thought I should read, "A Guide to the good life," and found MMM's post on it and sent it to me, VERY GLAD that she did.

accountingteacher

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Re: Am I the weirdo?
« Reply #31 on: May 26, 2016, 08:23:30 PM »
In my case, part of my reason for getting into credit card debt was a perverted sense of what a middle class lifestyle "should" be based on my parent's horrible spending habits.  My mom and stepfather had fancy houses and cars and unbeknownst to me, were horribly in debt.  So I grew up thinking this level of spending vs. income was "normal" and I didn't see the downsides to all this debt spending.  That came later when my parents ended up broke and desperate and begging me for money.  I also had an inheritance when I was in my 20's that further put my expectations out of whack.  I didn't waste it all, but I spent far too much on a new car and fancy vacations and just frittering it away on impulse purchases.  When that money ran out, it took me longer than it should have to readjust my spending to reality.  The debt I got into wasn't terrible - low five figures, and it accumulated over a few years.  No excuses really, but people learn habits from what they experience in their lives. 

I still fight these spending impulses all the time.  You are lucky that you never felt the impulse to spend.

It is very hard for teachers of anything, be it finance, fitness, or nutrition, to break through some of the dangerous 'normals' learned at home.  My husband grew up like you did, and even though I teach financial stuff for a living, it took me 2-3 years before he 'got it'.

ender

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Re: Am I the weirdo?
« Reply #32 on: May 27, 2016, 06:16:53 AM »

You're absolutely right. I hope none of my responses come across as argumentative. I consider myself very fortunate to have found MMM. It's funny, the friend that introduced me to MMM is not a Mustachian*, and I had to educate on what mutual funds are and the difference between them and index funds. Had it not been for that, I likely wouldn't be in such a good financial position (though I was somewhat frugal beforehand).

*She thought I should read, "A Guide to the good life," and found MMM's post on it and sent it to me, VERY GLAD that she did.


My process resulting in me being here is something where I count myself insanely lucky and blessed.

I never was horribly dumb with money, but it wasn't until grad school I even cared - when I realized I would be making 4x my grad school income when I graduated. So I took FPU since I knew the guy leading it and then I got more interested and somehow ended up here.

The only thing I can think of which drove me to the "saver" vs "spender" mentality (like my brothers) is that I played a game starting my sophomore year of college that required "war chests" for savings. And I had an "engineering economics" class which talked about cashflow stuff at length so I get the idea of compounding and can put together a mortgage amortization schedule myself. But otherwise?  I can say I was quite lucky to learn about and begin caring about finances.

Sure I have an obsessive personality and so once I got interested I became obsessed with learning everything about money. But really, it's not like I learned this in high school or from my parents.

elaine amj

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Re: Am I the weirdo?
« Reply #33 on: May 27, 2016, 06:35:23 AM »
In my case, part of my reason for getting into credit card debt was a perverted sense of what a middle class lifestyle "should" be based on my parent's horrible spending habits.  My mom and stepfather had fancy houses and cars and unbeknownst to me, were horribly in debt.  So I grew up thinking this level of spending vs. income was "normal" and I didn't see the downsides to all this debt spending.  That came later when my parents ended up broke and desperate and begging me for money.  I also had an inheritance when I was in my 20's that further put my expectations out of whack.  I didn't waste it all, but I spent far too much on a new car and fancy vacations and just frittering it away on impulse purchases.  When that money ran out, it took me longer than it should have to readjust my spending to reality.  The debt I got into wasn't terrible - low five figures, and it accumulated over a few years.  No excuses really, but people learn habits from what they experience in their lives. 

I still fight these spending impulses all the time.  You are lucky that you never felt the impulse to spend.

This is what I see the most of. And it affects my frugal DH and myself too.

If u are not being conscious about it, it is so easy to stop thinking , take the easy way, and just do "what everyone else does". If u feel you have an average (or above average) salary, then it is easy to think that if the Joneses can afford it, u can too. Rather than taking the energy to do your math yourself.

If everyone else has CC debt, u are "normal" and it can't be all that bad, right?



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notactiveanymore

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Re: Am I the weirdo?
« Reply #34 on: May 27, 2016, 11:33:46 AM »
There is a line Dave Ramsey quotes which fits really nicely here: "Rich people ask 'how much?' while poor people ask 'how much per month?'".

I've been blogging the last 19 months about my husband and I's aggressive student loan payoff (2 months left!!!), and we've found that because we've been open about this financial goal and how we're reaching it, people have way overshared with us about their financial decisions.

I've got a friend from high school who is married and just finished his second year of teaching. His wife just finished her first year teaching. So this couple bought two new cars this year. There was an insurance check in there after a wreck, but they replaced a 10-15 year old vehicle with a new one. Then they replaced their other car as well. Then when they went in to sign a lease for a larger apartment (40 minutes from the place where they both work) the lease papers weren't ready. So they went house shopping and found a house to buy instead - still 40 min from work. They mentioned to us that they preferred a different home, but it was over 30% of their take home. The one they got came just under 30% apparently.

The one highlight was that they should be receiving a settlement from the car wreck and they said they were thinking about spending it on redoing their kitchen but decided instead to use it for some debt.

I think a fundamental problem is that many consumers believe debt-issuers when the debt-issuer says, "you can afford this!". They see those people as experts not salespeople. The other thing is that people grab onto the selective financial information that they hear and use it to confirm the choices they already want to make. 30% of your joint take-home going towards a 30 year mortgage is probably not a good idea if you aren't putting money in retirement and live in a low or middle cost of living area. Also not a good idea if there is a possibility you'll drop to a single income family at some point. There is a compelling mathematical argument for buying a 2-3 year old car on super-low interest (sub 1%) so long as you are leveraging that debt for investment/savings. But it's a lot more fun to just grab on to the idea that financing a car is smart. It goes on and on. People latch onto "renting is throwing away money" and that's the only piece of financial advice they hear so they don't do any work thinking about their situation now or in the future.

RetiredAt63

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Re: Am I the weirdo?
« Reply #35 on: May 27, 2016, 05:00:22 PM »
I know it has been brought up in other threads, but advertising is insidious and ubiquitous.  The low-information diet MMM talks about also means a low-ad diet - if you don't see the ads, you don't get told that you need all this stuff.  If in addition you don't use shopping as recreation, all the impulse purchases are much less likely to happen.  You know the ones "Oh, I hadn't thought about it, but now that I see it I know that I really need this thing" when you really have no need at all for it.

I learned this in grad school, it is nothing new.  But everyone has to discover it for themselves.