Author Topic: Bankers trying to be frugal  (Read 7091 times)

FrugalToque

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Bankers trying to be frugal
« on: March 22, 2013, 05:45:10 AM »
http://news.efinancialcareers.com/uk-en/137083/twenty-money-saving-tips-from-bankers-and-their-wives/

Mustachian tips for bankers.  You have to read it to believe it.  Some cogent advice like:
- sell your second home
- use public schools
- ski at the $10k place instead of the $26k place

Sure, they have good advice, like cycling and selling your old crap, but wow ... such hardship these bankers are facing.

aclarridge

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Re: Bankers trying to be frugal
« Reply #1 on: March 22, 2013, 07:24:46 AM »
“The wife is doing the ironing,” another banker told us. “She’s not loving it, but she doesn’t want to get a job herself so is having to accept it.”

Hilarious.

Cid47

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Re: Bankers trying to be frugal
« Reply #2 on: March 22, 2013, 07:25:24 AM »
Quote
4. Make your children pay their own university fees
Is it so bad for your children to pay their own tuition fees at university? Not really. “People forget that in the UK the government offers student loans that cover fees,” said one ex-banker who is making his son pay his own way through higher education.

[emphasis mine]

This is considered "pay his own way"? I'd consider it more along the lines of an epic fail...

Oh, and some of the comments afterwards are pretty good too)

sherr

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Re: Bankers trying to be frugal
« Reply #3 on: March 22, 2013, 07:51:44 AM »
Quote
4. Make your children pay their own university fees
Is it so bad for your children to pay their own tuition fees at university? Not really. “People forget that in the UK the government offers student loans that cover fees,” said one ex-banker who is making his son pay his own way through higher education.

[emphasis mine]

This is considered "pay his own way"? I'd consider it more along the lines of an epic fail...

Oh, and some of the comments afterwards are pretty good too)

Um, it is right? The student will have to pay those loans off, so he is very definitely paying his own way through school (albeit delayed).

I don't think student loans are necessarily an epic fail either. The basic logic of viewing student loans as an investment in your own earning potential is still valid, assuming one gets a degree that actually increases your earning potential and doesn't overpay for it to the point where the ROI is not worthwhile.

Of course, if you can work while in school and not take loans that's better still.

mpbaker22

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Re: Bankers trying to be frugal
« Reply #4 on: March 22, 2013, 08:42:38 AM »
As a "financial analyst", I was appalled when I learned other people in my office didn't iron their own shirts.  They key to a nice look on the cheap is to make your own ironing starch.  It's very simple and looks 10x better!
I'm not a banker, but I work in finance and I already 1) buy no clothes (thrift stores only except socks and underwear), 6, 10, 14, 15, and 18.  Of course 13 doesn't apply because I don't shop!!

Jamesqf

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Re: Bankers trying to be frugal
« Reply #5 on: March 22, 2013, 12:49:18 PM »
As a "financial analyst", I was appalled when I learned other people in my office didn't iron their own shirts. 

Whereas as a computer geek, I'm surprised that there are still people who wear shirts that need ironing.  I thought that went out in the 1950s.

Rich M

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Re: Bankers trying to be frugal
« Reply #6 on: March 23, 2013, 09:28:07 PM »
I think in the end it was a guerilla marketing ad for a Prius.

Cid47

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Re: Bankers trying to be frugal
« Reply #7 on: March 24, 2013, 04:58:29 AM »
Quote
4. Make your children pay their own university fees
Is it so bad for your children to pay their own tuition fees at university? Not really. “People forget that in the UK the government offers student loans that cover fees,” said one ex-banker who is making his son pay his own way through higher education.

[emphasis mine]

This is considered "pay his own way"? I'd consider it more along the lines of an epic fail...

Oh, and some of the comments afterwards are pretty good too)

Um, it is right? The student will have to pay those loans off, so he is very definitely paying his own way through school (albeit delayed).

I don't think student loans are necessarily an epic fail either. The basic logic of viewing student loans as an investment in your own earning potential is still valid, assuming one gets a degree that actually increases your earning potential and doesn't overpay for it to the point where the ROI is not worthwhile.

Of course, if you can work while in school and not take loans that's better still.

I agree that student loans can be a good thing. Like you said, it's an investment in your earning potential. I guess my beef is the idea that you need to max them out by including things like tuition fees (and a good number of other things that could easily be paid as you go), which while not explicitly stated here, I felt was implied due to the tone of the article. Therein lies the epic fail..

I agree that working while in school to avoid the loans altogether is the better option.

kt

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Re: Bankers trying to be frugal
« Reply #8 on: March 24, 2013, 07:34:02 AM »
by the way, student loans are rather different in the uk. they don't have to be paid back until you're earning a certain amount and (until the most recent intake) the interest was lower than any other loan, it's currently 1.5% i think. plus the payments once you reach the income threshold are calculated as a % of your income and deducted at source.

Paul der Krake

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Re: Bankers trying to be frugal
« Reply #9 on: March 24, 2013, 07:41:18 AM »
They are also capped at a reasonable threshold, even with the recent tripling of university fees.

https://www.gov.uk/student-finance/loans-and-grants

Jamesqf

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Re: Bankers trying to be frugal
« Reply #10 on: March 24, 2013, 11:34:06 AM »
I agree that student loans can be a good thing. Like you said, it's an investment in your earning potential. I guess my beef is the idea that you need to max them out by including things like tuition fees (and a good number of other things that could easily be paid as you go), which while not explicitly stated here, I felt was implied due to the tone of the article. Therein lies the epic fail.

I think they're a very good thing.  I almost certainly wouldn't be where I am without them.  I think the epic failures - which are only a small fraction of cases - come from people borrowing way too much in order to A) attend big-name out of state university; and B) major in something with few job openings and small earning potential.

jamccain

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Re: Bankers trying to be frugal
« Reply #11 on: March 24, 2013, 05:42:00 PM »
I think student loans are a BAD to HORRIBLE depending on the amount taken on.  Of course, this is highly individualized, but the fact that they exist leads too (generally speaking):

1. Overspending on a college
2. Overspending while in college
3. They have become "the" way to pay for college, not forcing people to being creative enough to figure out alternatives

Essentially, you're asking a young adult who doesn't know squat about money, finances, and what a debt payment is like to make money choices that should only be left to a responsible, experienced adult.  Some may have a parent who can fill this role...many, many others do not. 

I found an alternative...the military.  For a undergrad and graduate degree I paid $8K which is a lot more than some other military folks, but I had two years of school before I figured out what ROTC was.  Nothing saying the military is the answer, it's not in most cases, but it's an option. 


daverobev

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Re: Bankers trying to be frugal
« Reply #12 on: March 24, 2013, 06:27:15 PM »
I think student loans are a BAD to HORRIBLE depending on the amount taken on.  Of course, this is highly individualized, but the fact that they exist leads too (generally speaking):

1. Overspending on a college
2. Overspending while in college
3. They have become "the" way to pay for college, not forcing people to being creative enough to figure out alternatives

Essentially, you're asking a young adult who doesn't know squat about money, finances, and what a debt payment is like to make money choices that should only be left to a responsible, experienced adult.  Some may have a parent who can fill this role...many, many others do not. 

I found an alternative...the military.  For a undergrad and graduate degree I paid $8K which is a lot more than some other military folks, but I had two years of school before I figured out what ROTC was.  Nothing saying the military is the answer, it's not in most cases, but it's an option.

The UK is not the US (though the student loan and the introduction of tuition fees means, as with many things, we are slowly following).

As noted above, you pay back approx 10% of your net earnings above (I think) 15k GBP.

Don't get me wrong, I believe people going to university should do it later (like 25, 30), and far far fewer people should go at all. The people going should be fully funded by the government or an employer. Everyone else should be doing apprenticeships.

Me, for example: BSc (Hons) in Chemistry. Never used it. I've worked in IT, from a temp job I got. I still have a few thousand pounds of student loan to pay back just because I've moved companies a couple of times, and emigrated, and the accounts dept have been slow to start taking loan payments (yes, it is up to the accounts dept, or when HMRC contacts them - I have always told them!).

But.. anyway. More than half go to university now. For what? 3 years of drinking, socialising, and learning a bit here and there. To then work in an office, for which you'll get fully trained on the job...

grantmeaname

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Re: Bankers trying to be frugal
« Reply #13 on: March 24, 2013, 07:47:25 PM »
by the way, student loans are rather different in the uk. they don't have to be paid back until you're earning a certain amount and (until the most recent intake) the interest was lower than any other loan, it's currently 1.5% i think. plus the payments once you reach the income threshold are calculated as a % of your income and deducted at source.
That's a government subsidy, for the record. It's not like the student loan rates are higher in the US because we don't respect students as much, or because our government's finance function is less efficient, or something. The cost of borrowing is just subsidized a little less by the US taxpayer and a little more by the UK taxpayer.

Couldn't a German college graduate say the same things about the UK's system of paying for college, in comparison? That too much is borne by the student and not enough by the government? (Or, if you like the balance in the UK system, couldn't you equally say that the German system puts too little responsibility on the student and too much on the state, the same things that Americans say about the British system?) The differences between the systems are deliberate spending decisions.

gooki

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Re: Bankers trying to be frugal
« Reply #14 on: March 25, 2013, 02:42:19 AM »
I think student loans are a BAD to HORRIBLE depending on the amount taken on.  Of course, this is highly individualized, but the fact that they exist leads too (generally speaking):

The worst thing about student loans is they've severely increased the demand for tertiary education, which is fuelling the increase in costs we are seeing (the tripling in costs quoted elsewhere in this thread).

This not only means students taking on greater debt, but those paying their own way are paying more.

kt

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Re: Bankers trying to be frugal
« Reply #15 on: March 25, 2013, 03:36:36 AM »
by the way, student loans are rather different in the uk. they don't have to be paid back until you're earning a certain amount and (until the most recent intake) the interest was lower than any other loan, it's currently 1.5% i think. plus the payments once you reach the income threshold are calculated as a % of your income and deducted at source.
That's a government subsidy, for the record. It's not like the student loan rates are higher in the US because we don't respect students as much, or because our government's finance function is less efficient, or something. The cost of borrowing is just subsidized a little less by the US taxpayer and a little more by the UK taxpayer.

Couldn't a German college graduate say the same things about the UK's system of paying for college, in comparison? That too much is borne by the student and not enough by the government? (Or, if you like the balance in the UK system, couldn't you equally say that the German system puts too little responsibility on the student and too much on the state, the same things that Americans say about the British system?) The differences between the systems are deliberate spending decisions.

i wasn't meaning to make any comment whatsoever on the system itself, whether it is right or wrong. i was merely noting the difference. my impression is that it is very easy to take an on an awful lot of student debt in america which then hangs like a weight over you.

in the uk both the fees and the amount you can take as living allowance is capped to a relatively reasonable level (yes, you can take on other loans to pay but i don't know anyone who did). then the repayments are automatic (so you don't see the money which i think helps) and proportionate.

a lot of people view it more as an additional tax almost, rather than a debt, particularly as it doesn't affect your credit rating and ability to get a mortgage.

i guess my point was... student debt doesn't seem as high or as stressful in the uk.

grantmeaname

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Re: Bankers trying to be frugal
« Reply #16 on: March 25, 2013, 06:22:18 AM »
i wasn't meaning to make any comment whatsoever on the system itself, whether it is right or wrong. i was merely noting the difference. my impression is that it is very easy to take an on an awful lot of student debt in america which then hangs like a weight over you.
It looks to me like the average indebtedness in the UK is somewhere around £38,000 (indebtedness by country here; 84% of Britons and presumably 84% of UK citizens in college are in England). That's actually more twice  the $24,301 that the average American borrows, and the American is likely getting at least another year's education out of it. If you have a link that says otherwise, I'd love to see it, but I spent forever looking and didn't find much.

It also looks to me like the outstanding public student loan balance in the UK has increased 50% in the last two years, while from the Fed site it took the US from Q2 2005 to Q1 2012 for the same magnitude of change to happen in the US.

Quote
in the uk both the fees and the amount you can take as living allowance is capped to a relatively reasonable level (yes, you can take on other loans to pay but i don't know anyone who did). then the repayments are automatic (so you don't see the money which i think helps) and proportionate.
In the US public loan borrowing is limited to $27,000, or $37,000 for a student who is independent their last two years. Income based repayment is offered by the federal government in addition to even nicer programs like Public Service Loan Forgiveness. I don't know anyone who took out private loans to go to school, either, but that doesn't mean it doesn't happen in either country. Since the last few inferences based on anecdotes have been wrong, I'd be wary of making another one without data. And lastly, why is not seeing the number a good thing? Wouldn't it be better to know than to live in ignorance?

Quote
a lot of people view it more as an additional tax almost, rather than a debt, particularly as it doesn't affect your credit rating and ability to get a mortgage.
Don't you think it should? Doesn't it affect your ability to make payments on time and the total amount of debt you have outstanding? Doesn't excluding it from credit reporting systems also unfairly penalize all UK consumers with less student loan than their demographic peers, by assuming that everyone has the same proportion of debt as their demographics predict?

Quote
i guess my point was... student debt doesn't seem as high or as stressful in the uk.
Funny, it seems both higher and more stressful to me.

mpbaker22

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Re: Bankers trying to be frugal
« Reply #17 on: March 25, 2013, 09:37:28 AM »
As a "financial analyst", I was appalled when I learned other people in my office didn't iron their own shirts. 

Whereas as a computer geek, I'm surprised that there are still people who wear shirts that need ironing.  I thought that went out in the 1950s.

That's true, but my point was more along the lines of - I get the same result with much less money paid.

EMP

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Re: Bankers trying to be frugal
« Reply #18 on: March 25, 2013, 10:44:02 AM »


The worst thing about student loans is they've severely increased the demand for tertiary education, which is fuelling the increase in costs we are seeing (the tripling in costs quoted elsewhere in this thread).

This not only means students taking on greater debt, but those paying their own way are paying more.
[/quote]

I'd say the worst thing is that the government has done little to nothing to stop the predatory practices of for-profit schools that prey on those least able to repay their loans. 

mpbaker22

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Re: Bankers trying to be frugal
« Reply #19 on: March 25, 2013, 10:51:07 AM »


The worst thing about student loans is they've severely increased the demand for tertiary education, which is fuelling the increase in costs we are seeing (the tripling in costs quoted elsewhere in this thread).

This not only means students taking on greater debt, but those paying their own way are paying more.

I'd say the worst thing is that the government has done little to nothing to stop the predatory practices of for-profit schools that prey on those least able to repay their loans.
[/quote]

I'd say the worst thing is the government paying to send millions of kids to college to study things that won't help them be productive for society.