Relatives who just don't get it

[BDWW]

My grandmother lives in a flat with an excellent view of a marina. One of her favourite pastimes is tracking the boats in and out through binoculars. She has lived there for a good ten years now. When I went down recently she pointed out a very distinctive boat with a red hull at the end of a row right in the centre. You really couldn't miss it. She said that she has never ever seen that boat leave the marina. It's still neat and tidy, so not abandoned, and I think she has seen the owners checking on it once or twice, but it has never ever been used (even for drinks parties) in ten years.

I have an uncle who paid way too much for a truck. The loan costs one thousand dollars a month. He got it because he has a boat. Last I was told, he hasn't used the boat once.

Holy smokes.  That's how much the mortage payment was (including taxes!) for our first home (1500 sq ft)!

It might also be related to situation I observe somewhat regularly. Unless the boat is huge, you don't need anything other than a 1/2 ton(or smaller) to tow it with. There seems to be a plethora of people who need a 1 ton diesel (towing capacity ~30,000lbs) to tow a ~4,000 lb boat.

[former player]

The phrase I've heard is Diderot effect.

Perfect.

Ha.  Where I live there is a very common phenomenon of someone buying a smaller, older house in a spectacular location (sea views, waterside or beach access, etc.) and sooner or later knocking it down to build something modern and as big as the plot will take.  They will often pay high six figures or low seven figures for one of these houses that they then knock down and rebuild.  Even more often, it is a couple without children who build these monstrous edifices when the smaller house would be a much better fit for them.  Diderot effect is the explanation for this behaviour that I have been missing all these years.  Thanks.

[Linea_Norway]

The phrase I've heard is Diderot effect.

Perfect.

Ha.  Where I live there is a very common phenomenon of someone buying a smaller, older house in a spectacular location (sea views, waterside or beach access, etc.) and sooner or later knocking it down to build something modern and as big as the plot will take.  They will often pay high six figures or low seven figures for one of these houses that they then knock down and rebuild.  Even more often, it is a couple without children who build these monstrous edifices when the smaller house would be a much better fit for them.  Diderot effect is the explanation for this behaviour that I have been missing all these years.  Thanks.

We (Dinky couple) have been looking for such a house. Sometimes there is such an old seafront house for sale, but they had always been half-modernized by the previous owner. New windows, new bathroom etc. Then they had become too expensive to knock down and were still too old to live in self. So we have never bought such a house.

By the way, we have also experienced the Diderot effect. When we bought our current house, there were some closets. Just not enough. We had to buy some extra closets. We bought the closets door in the same style as the existing doors. Those were the priciest doors that Ikea was selling. Everything is in the same style now, but it cost a small fortune.

[BJacks]

My grandmother lives in a flat with an excellent view of a marina. One of her favourite pastimes is tracking the boats in and out through binoculars. She has lived there for a good ten years now. When I went down recently she pointed out a very distinctive boat with a red hull at the end of a row right in the centre. You really couldn't miss it. She said that she has never ever seen that boat leave the marina. It's still neat and tidy, so not abandoned, and I think she has seen the owners checking on it once or twice, but it has never ever been used (even for drinks parties) in ten years.

I have an uncle who paid way too much for a truck. The loan costs one thousand dollars a month. He got it because he has a boat. Last I was told, he hasn't used the boat once.

Stanley and Danko are best remembered for introducing the concept of "economic outpatient care" or EOC as we call it on this forum, but they also illustrated how some kinds of belongings actually precipitate further spending even if the item is won in a raffle or given as a gift. They didn't have a trendy phrase for it-- maybe we should invent one. "Purchase Trigger", perhaps?

Anyway, the example Stanley and Danko used to illustrate the concept was a young professional-class couple who were given a very expensive Oriental rug with thousands of hand-tied knots. The rug was beautiful, but it also made a dreadful contrast with their somewhat worn dining room furniture, so to bring the room up to the same level as the rug taste-wise "required" them to spend thousands of dollars buying more upscale furniture, light fixtures, and such to redecorate the room with. It's not that they entertained often or for business purposes, it's just that having and using the rug-- for them-- created enormous pressure to do a lot of extra spending to the point where the extra spending cost more than the initial gift would have. It seems to me that, for your uncle, the boat was the same kind of acquisition because it triggered the purchase of a truck almost automatically. There were probably other boat-related expenses also: lifejackets, fishing gear, and the like, that wouldn't have occurred if there hadn't been a boat.

A few years ago our faucet was having problems and one day my husband had enough and told me "Come one, lets go to Home Depot to pick out a new faucet." I told him "Well, the reason I haven't done anything about it is because if I get a new faucet I'm going to want a new sink and if I'm getting a new sink I'm going to want to replace the ugly countertops, so rather than looking for faucets we should go check out some counters."

We got a new faucet.

[solon]

This Diderot effect sounds exactly like hedonic adaptation, or the consumer treadmill.

[marielle]

This Diderot effect sounds exactly like hedonic adaptation, or the consumer treadmill.

I think they go hand-in-hand, but they're different. The Diderot effect is when you get something that is significantly nicer (whether it's a gift or you buy it), then the surrounding objects upset you because they don't match the luxury of the new item. Just like the faucet issue BJacks had. It's as if the new luxury item will seem like a waste if you don't upgrade other things to match. To most people, it would be silly to have an old ratty couch scratched to hell by pets but then have a fancy custom coffee table sitting in front of it.

The hedonic treadmill is when you buy something you really want and it makes you happy (for a brief period), but then you go back to your "baseline" happiness once you get used to the new thing. So you want to buy something else to spark that elevated happiness again, or the same thing but an upgraded version. You buy a camera, but then you try one out in the store that has a bunch of new features yours doesn't. Now you want to buy that new one to get that brief dopamine increase again. This is basically the psychology advertising uses and the reason stores have new models of phones, cameras, etc for people to play with.

[TheGrimSqueaker]

This Diderot effect sounds exactly like hedonic adaptation, or the consumer treadmill.

Hedonic adaptation is the way an individual's level of happiness tends to return to his or her normal level after a positive or negative change in circumstances: the person adapts to the "new normal", be it partial paralysis or a big pay raise.

The consumer treadmill is the cycle of working and spending, with additional work required to support additional spending.

The Diderot effect is when you buy items to "go with" another item because of a preconceived notion that they're part of a group of things that are *all* necessary in order to achieve the proper and appropriate effect. In Diderot's case, he received a very nice, fancy dressing-gown as a gift and ended up purchasing a new chair, furnishings, and other consumer goods because acquiring belongings appropriate to a man who would own and use such a dressing-gown became appropriate. I'm sure he became hedonically adapted at some point in the process, and jumped onto the 18th-century equivalent of the consumer treadmill to earn the money to pay for his new indulgences.

[jinga nation]

Does anyone find it amazing that Denis Diderot observed this in the mid/late 1700s? I think he wrote during the Louis XVI era, which may have been ample fodder for his works.
Basically he saw excessive consumption and irrational exuberance, etc. We're still grappling with those issues.
Nothing's changed.

[Rowellen]

On a smaller scale, my 6yo DD seems to think that because she had her ears pierced recently, she now needs more sets of earrings. She has been harassing me for weeks to buy her more.

[AMandM]

I had a Japanese classmate in university (back in the late 80s) who planned to return to Japan after graduation, where she would get a job as a secretary.  Her B.A. from a North American university would mean she'd be secretary to a high-up executive, not just some manager. Then her father would find her a husband.  I asked whether, having lived in Canada for a few years, she was happy with the idea of an arranged marriage.  She said, not at all.  Arranged marriage doesn't equal forced marriage; she would have the right to refuse any guy her father offered, and she thought her father would pick a better man than she would.  "I'd just go for whether he did stuff like buy me flowers, but my father will think about whether he'll support me ling-term and stick around."  We didn't stay in touch after graduation, so I don't know how it turned out.

Is that what you meant? Or you asked if she was unhappy and she said not at all?

Sorry, you're totally right. Good catch.  She was not at all uncomfortable with the idea of her father picking her a (candidate) husband.

[paddedhat]

My grandmother lives in a flat with an excellent view of a marina. One of her favourite pastimes is tracking the boats in and out through binoculars. She has lived there for a good ten years now. When I went down recently she pointed out a very distinctive boat with a red hull at the end of a row right in the centre. You really couldn't miss it. She said that she has never ever seen that boat leave the marina. It's still neat and tidy, so not abandoned, and I think she has seen the owners checking on it once or twice, but it has never ever been used (even for drinks parties) in ten years.

I spent about a decade building vacation homes. The number of customers of mine that barely set foot in their new, expensive home, is staggering. I did one for an extremely difficult, demanding couple. There was a really sweet old guy who lived across the street, and over the months of building, I got to know him a bit. A year after the PITA couple took possession of the place, I stopped to talk to the old guy. He told me that my customers never spent a single night in their new home, in the year they owned it.  that's a bit extreme, but vacation homes that get used 3-4 weekends a year, are pretty common. When you consider that for most, a "weekend" is blasting out of the city on a Friday evening, getting to the home late,  then blasting back to the city by mid-morning on Sunday. That's roughly 36 hours. If you multiply those hours by three or four visits, and factor in monthly and annual expenses, many of my customers were spending $100+ per hour of use.

[jengod]

This Diderot effect sounds exactly like hedonic adaptation, or the consumer treadmill.

Hedonic adaptation is the way an individual's level of happiness tends to return to his or her normal level after a positive or negative change in circumstances: the person adapts to the "new normal", be it partial paralysis or a big pay raise.

The consumer treadmill is the cycle of working and spending, with additional work required to support additional spending.

The Diderot effect is when you buy items to "go with" another item because of a preconceived notion that they're part of a group of things that are *all* necessary in order to achieve the proper and appropriate effect. In Diderot's case, he received a very nice, fancy dressing-gown as a gift and ended up purchasing a new chair, furnishings, and other consumer goods because acquiring belongings appropriate to a man who would own and use such a dressing-gown became appropriate. I'm sure he became hedonically adapted at some point in the process, and jumped onto the 18th-century equivalent of the consumer treadmill to earn the money to pay for his new indulgences.

I'm like all of these at once?
* I get a new-to-me used sewing machine, then I "need" a sewing machine case.
* I find a couple of nice children's biographies at the thrift store, then I "need" the whole set.
* I get a cargo bike so I drive less, but then I "need" the baby seat and the sun cover and a drink holder and a phone holder and a guy to come help me fix the weird gears.
* My father-in-law gives me his old records, then my dad decides his record player is no good, and before you know it I'm collecting an obscure series of vintage children's records at $25 a pop. What?

[ysette9]

Been spending a lot of time with family these pas few days and it has been interesting observing differences. My aunt and Uncle were amazing mustachians two decades ago and were able to retire early and comfortably due to their amazing frugal muscles. Since then they have swung in the total opposite direction. Massive McMansion for two people (plus cat) and the miles they put on their cars is just staggering. I couldn’t figure it out st first but observing how they do regular household chores has been enlightening. For example, the cars need new DMV tags.
I pay my thingie online and get the tags in the mailbox. They drive downtown and stand in line at the DMV. I pay my bills online using bill pay. They write checks or pay cash, which of course requires a trip to the bank. They deposit checks in person at the bank. If they need some information they drive to the business office instead of picking up the phone. It is a very old-school, personalized way of doing business.

On one hand they know everyone and everyone knows them.
On the other hand, they put 10k more miles on their cars each year than me, and they aren’t commuting to work every day like I do.

[barbaz]

I pay my bills online using bill pay.

The American banking system will forever be a mystery to me. WTF is a bill pay?

[UKMustache]

I pay my bills online using bill pay.

The American banking system will forever be a mystery to me. WTF is a bill pay?

I have no idea but it does make me laugh that one of the most advanced nations on earth still use cheques :D

[AlanStache]

I pay my bills online using bill pay.

The American banking system will forever be a mystery to me. WTF is a bill pay?

I have no idea but it does make me laugh that one of the most advanced nations on earth still use cheques :D

bill pay is a website link within your banks site.  And we now mostly have the smart chips in our credit and debit cards  :-) 

[marielle]

Been spending a lot of time with family these pas few days and it has been interesting observing differences. My aunt and Uncle were amazing mustachians two decades ago and were able to retire early and comfortably due to their amazing frugal muscles. Since then they have swung in the total opposite direction. Massive McMansion for two people (plus cat) and the miles they put on their cars is just staggering. I couldn’t figure it out st first but observing how they do regular household chores has been enlightening. For example, the cars need new DMV tags.
I pay my thingie online and get the tags in the mailbox. They drive downtown and stand in line at the DMV. I pay my bills online using bill pay. They write checks or pay cash, which of course requires a trip to the bank. They deposit checks in person at the bank. If they need some information they drive to the business office instead of picking up the phone. It is a very old-school, personalized way of doing business.

On one hand they know everyone and everyone knows them.
On the other hand, they put 10k more miles on their cars each year than me, and they aren’t commuting to work every day like I do.

I've observed this stuff before too. I know people at work that don't have autopay for their internet or other bills, so each time it's due they call and pay on the phone. My roommate pays his credit card bills, internet, etc manually when his paychecks come in, even if it's two weeks early. I think he has a spending problem, so this is a way of helping that? I don't know. I know he's an engineer that makes $5k more than I do and he was having money problems a couple months ago because of two traffic tickets. And he was bragging about spending $80 at a bar one night...

[ketchup]

I pay my bills online using bill pay.

The American banking system will forever be a mystery to me. WTF is a bill pay?

I have no idea but it does make me laugh that one of the most advanced nations on earth still use cheques :D

bill pay is a website link within your banks site.  And we now mostly have the smart chips in our credit and debit cards  :-)

Yup, we've finally caught up with that sweet 90s tech. :)  At least contactless seems to be catching on pretty quickly (relatively speaking...).

[Dave1442397]

I pay my bills online using bill pay.

The American banking system will forever be a mystery to me. WTF is a bill pay?

I have no idea but it does make me laugh that one of the most advanced nations on earth still use cheques :D

The only thing I use checks for is my daughter's school. They are still in the 20th century as far as money goes, and they want either cash or check for all activities. I prefer not to have my daughter carry more than $20 to school, so most times it's a check.

The other thing I use them for is paying for school lunch. I can add money to her account online, but they only let you add up to $200 at a time, and they have a $5 "service charge", which I refuse to pay. If I give her a check, they take it at the school cafe and update her account balance on the spot.

I just ran out of checks (last time I ordered any was over ten years ago), so I ordered a box of 200 for just over $6. That should be the last box of checks I ever order.

[paddedhat]

Sadly, a lot of local government activity, here in the states, requires a paper check, property taxes, water bills, etc. The other odd use of checks in our personal life has been paying for anything related to our kid's activities like scouting, sports teams and similar. During that whole phase of parenting I was stunned by how many other parents had zero skills with handling funds responsibly.several times we were approched with, " you still owe $50 from several months ago"  only to go back home and find the deposited check, that cleared months ago. Had we paid cash, we would of ended up paying twice.

[With This Herring]

This Diderot effect sounds exactly like hedonic adaptation, or the consumer treadmill.

Hedonic adaptation is the way an individual's level of happiness tends to return to his or her normal level after a positive or negative change in circumstances: the person adapts to the "new normal", be it partial paralysis or a big pay raise.

The consumer treadmill is the cycle of working and spending, with additional work required to support additional spending.

The Diderot effect is when you buy items to "go with" another item because of a preconceived notion that they're part of a group of things that are *all* necessary in order to achieve the proper and appropriate effect. In Diderot's case, he received a very nice, fancy dressing-gown as a gift and ended up purchasing a new chair, furnishings, and other consumer goods because acquiring belongings appropriate to a man who would own and use such a dressing-gown became appropriate. I'm sure he became hedonically adapted at some point in the process, and jumped onto the 18th-century equivalent of the consumer treadmill to earn the money to pay for his new indulgences.

I'm like all of these at once?
* I get a new-to-me used sewing machine, then I "need" a sewing machine case.
* I find a couple of nice children's biographies at the thrift store, then I "need" the whole set.
* I get a cargo bike so I drive less, but then I "need" the baby seat and the sun cover and a drink holder and a phone holder and a guy to come help me fix the weird gears.
* My father-in-law gives me his old records, then my dad decides his record player is no good, and before you know it I'm collecting an obscure series of vintage children's records at $25 a pop. What?

You're a completionist.  You like to have the whole set of something.  When you get an item in a set, take a step back and think if you REALLY want the item/set, or whether you just feel an urge to get the rest of a set because you don't like having an incomplete collection.

I pay my bills online using bill pay.

The American banking system will forever be a mystery to me. WTF is a bill pay?

I have no idea but it does make me laugh that one of the most advanced nations on earth still use cheques :D

bill pay is a website link within your banks site.  And we now mostly have the smart chips in our credit and debit cards  :-)

Automatic bill pay is when you set up bills to be paid automatically from your credit card or checking account when they are due.  So, my electric bill is paid automatically on the due date every month.

We do use checks, but not frequently.  I give my landlord checks (he just has four apartments, and two are in his home; it's not a big operation), and occasionally I will give at church with a check (instead of my preferred cash), but that's it.  Almost no one uses checks to pay for grocery shopping, and most people pay their bills electronically.  Though it may not be common knowledge (paddedhat :) ), most districts have online payment options for property taxes, water bills, etc.  Though the information won't necessarily be printed on your paper bill, you can find it with an internet search.

Though we do have chipped cards, I've heard that they don't work as well as the ones in Europe do, and that sometimes American chipped cards do not work at all in Europe.

[Paul der Krake]

Depends where. Automated kiosks such as the ones found in train stations sometimes don’t like US cards, which is why you should always have some local currency in cash. Every store or restaurant will accept Visa/Mastercard, unless they don’t take any cards.

[BDWW]

Sadly, a lot of local government activity, here in the states, requires a paper check, property taxes, water bills, etc. The other odd use of checks in our personal life has been paying for anything related to our kid's activities like scouting, sports teams and similar. During that whole phase of parenting I was stunned by how many other parents had zero skills with handling funds responsibly.several times we were approched with, " you still owe $50 from several months ago"  only to go back home and find the deposited check, that cleared months ago. Had we paid cash, we would of ended up paying twice.

One of the issues, at least around here, is that local governments are statutorily required to bill a certain amount, and can't move numbers to fit around card processing fees. Most (if not all) of the bills I pay can be paid online, but they have an added card processing fee. So I pay by check* to avoid paying the fee.

*Before I started making the effort to swing by city hall once a month to drop off a check, I discovered that the late fee the city charges for being one month late on the water bill is less than the price of running a separate credit card transaction every month. So I would wait two months to pay my water bill and save a buck or two.

[ixtap]

Sadly, a lot of local government activity, here in the states, requires a paper check, property taxes, water bills, etc. The other odd use of checks in our personal life has been paying for anything related to our kid's activities like scouting, sports teams and similar. During that whole phase of parenting I was stunned by how many other parents had zero skills with handling funds responsibly.several times we were approched with, " you still owe $50 from several months ago"  only to go back home and find the deposited check, that cleared months ago. Had we paid cash, we would of ended up paying twice.

One of the issues, at least around here, is that local governments are statutorily required to bill a certain amount, and can't move numbers to fit around card processing fees. Most (if not all) of the bills I pay can be paid online, but they have an added card processing fee. So I pay by check* to avoid paying the fee.

*Before I started making the effort to swing by city hall once a month to drop off a check, I discovered that the late fee the city charges for being one month late on the water bill is less than the price of running a separate credit card transaction every month. So I would wait two months to pay my water bill and save a buck or two.

Interesting. I have always been able to pay these bills by ACH.

[druth]

More from the future inlaws, who you can also read about here:
https://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/relatives-who-just-don't-get-it/msg579297/#msg579297
https://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/relatives-who-just-don't-get-it/msg1708223/#msg1708223

They just bought a brand new Jeep Grand Cherokee.  I used to think they were financially dumb but at least not too consumptive, but it seems like the MLM talk is getting to them.  They are definitely of the impression that they will be rich SO SOON so it's not a risk.  I think some of the MLM has components of "act rich to get rich".

They apparently bought it because they got a flyer in the mail from their local jeep dealer about how they could get a great trade in price because of the Houston floods.  I'm sure a flyer would never exaggerate about that!

Talk about Diderot effect and hedonic adaption, this is apparently a great purchase because now they can tow a boat and a camper(they don't have either of these items... yet).

They really were excited about the great deal they got, and their payments are only about 500$ a month! OH BOY!  My personal opinion is that you would have to pay me to drive any modern Jeep.  This is also their third new car in 2 years.  They leased a Ford fusion, couldn't afford the payments, returned it, bought a lightly used Lincoln(which is at 70k miles - the horror!), and just traded that in for the Jeep.

I'm just waiting for it to all come crashing down.  MIL hasn't been working in months because of an injury(which is way overblown, but that's another thread), she just spends all of her time suing people pretty much.  FIL seems to barely work because he's putting all his time into Primerica.  They are both in their 50s and have student loans still.  IDK how they have even held up as long as they have.

[RWD]

Sadly, a lot of local government activity, here in the states, requires a paper check, property taxes, water bills, etc. The other odd use of checks in our personal life has been paying for anything related to our kid's activities like scouting, sports teams and similar. During that whole phase of parenting I was stunned by how many other parents had zero skills with handling funds responsibly.several times we were approched with, " you still owe $50 from several months ago"  only to go back home and find the deposited check, that cleared months ago. Had we paid cash, we would of ended up paying twice.

One of the issues, at least around here, is that local governments are statutorily required to bill a certain amount, and can't move numbers to fit around card processing fees. Most (if not all) of the bills I pay can be paid online, but they have an added card processing fee. So I pay by check* to avoid paying the fee.

*Before I started making the effort to swing by city hall once a month to drop off a check, I discovered that the late fee the city charges for being one month late on the water bill is less than the price of running a separate credit card transaction every month. So I would wait two months to pay my water bill and save a buck or two.

Interesting. I have always been able to pay these bills by ACH.

Same here. Sometimes call draft or e-check. Typically avoids the credit card convenience fees.

[LeRainDrop]

Every store or restaurant will accept Visa/Mastercard, unless they don’t take any cards.

This isn't true in Portugal.  Many restaurants and other merchants accept credit cards issued by Portuguese banks, but no foreign cards at all.

[fredbear]

..I'm sure he became hedonically adapted at some point in the process, and jumped onto the 18th-century equivalent of the consumer treadmill to earn the money to pay for his new indulgences.

Well, in a sense he did: he wrote Les Bijoux Indiscrets to impress but also to pay for his mistress.  Unrecorded whether she had one.

A sadder example of the 18th century treadmill was Johnson writing Rasselas to pay for the burial of his mother.

[Paul der Krake]

Every store or restaurant will accept Visa/Mastercard, unless they don’t take any cards.

This isn't true in Portugal.  Many restaurants and other merchants accept credit cards issued by Portuguese banks, but no foreign cards at all.

Oh weird! Good to know.

[Linea_Norway]

Every store or restaurant will accept Visa/Mastercard, unless they don’t take any cards.

This isn't true in Portugal.  Many restaurants and other merchants accept credit cards issued by Portuguese banks, but no foreign cards at all.

This is indeed weird. Do they not want to get foreign tourists? Or are most tourists Europeans who pay cash with Euro's?

By the way, I have also noticed this in Denmark at el cheapo petrol stations. If you want to pay with Visa, you need to visit one of the more equipped and more expensive petrol stations.

[Playing with Fire UK]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

[Linea_Norway]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

Here in Norway it differs between banks. But since there are cheap banks that offer to pay bills online for free and use ATM machines for free, those banks have taken over a lot of customers from the other banks. And the other banks have become cheaper. Those expensive  banks now try to earn their money by having higher interest on mortgages.
One of the cheap banks (where I am customer) has the best customer satisfaction rating for many years in a row.

[shelivesthedream]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

Being one of those dreadful socialist countries, we have laws in place that make it illegal to charge for various 'essential' banking services. See, for example, the recently introduced basic bank account. The Americans would like to retain their freedom to pay to perform these regular tasks. Being "unbanked" is one of those insidious self-perpetuating problems that are rife among the American poor (not enough money to open a bank account so you have to pay to cash cheques, etc) but isn't a massive thing over here because anyone can open a current account and bank for free.

[former player]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

Being one of those dreadful socialist countries, we have laws in place that make it illegal to charge for various 'essential' banking services. See, for example, the recently introduced basic bank account. The Americans would like to retain their freedom to pay to perform these regular tasks. Being "unbanked" is one of those insidious self-perpetuating problems that are rife among the American poor (not enough money to open a bank account so you have to pay to cash cheques, etc) but isn't a massive thing over here because anyone can open a current account and bank for free.

And funnily enough our banks still make massive profits even despite those dreadful socialist protections for individuals.

[Raenia]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

I'm in the US and I don't pay for any of those things...  When I was shopping for a new bank after relocating, I made free checks one of my criteria. Online bill pay is also a free service through my bank, and ATMs are free to use - if I use an ATM not associated with my bank, they reimburse me for any ATM fees charged by the other bank (up to 3 per month, but I don't withdraw cash that often so it's never been a problem.)  I don't drive anywhere to pay bills, I do it all with recurring payments from my account.

I know some banks are less competitive with these features, but that just means you need to shop around before opening an account, just like any other service.

[shelivesthedream]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

I'm in the US and I don't pay for any of those things...  When I was shopping for a new bank after relocating, I made free checks one of my criteria. Online bill pay is also a free service through my bank, and ATMs are free to use - if I use an ATM not associated with my bank, they reimburse me for any ATM fees charged by the other bank (up to 3 per month, but I don't withdraw cash that often so it's never been a problem.)  I don't drive anywhere to pay bills, I do it all with recurring payments from my account.

I know some banks are less competitive with these features, but that just means you need to shop around before opening an account, just like any other service.

Sure, but in the UK you'd have to shop around to find a bank account that WOULD charge you for these things. I don't know if they even exist. Maybe at Coutts?

[WerKater]

Every store or restaurant will accept Visa/Mastercard, unless they don’t take any cards.

This isn't true in Portugal.  Many restaurants and other merchants accept credit cards issued by Portuguese banks, but no foreign cards at all.

This is indeed weird. Do they not want to get foreign tourists? Or are most tourists Europeans who pay cash with Euro's?

By the way, I have also noticed this in Denmark at el cheapo petrol stations. If you want to pay with Visa, you need to visit one of the more equipped and more expensive petrol stations.

Most grocery stores in Germany do not accept any credit cards, only cash and Girocard (and possibly Maestro and V-Pay, this stuff is complicated...). The reason is simple (as far as I know): The Girocard fees are much smaller than typical credit card fees.
Credit card acceptance is higher in restaurants, especially upscale ones. Possibly because the ratio of foreign customers is higher. Or maybe it is just that they can afford to incorporate the fees into their prices since price competition is not as fierce as with grocery stores.

[ixtap]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

I'm in the US and I don't pay for any of those things...  When I was shopping for a new bank after relocating, I made free checks one of my criteria. Online bill pay is also a free service through my bank, and ATMs are free to use - if I use an ATM not associated with my bank, they reimburse me for any ATM fees charged by the other bank (up to 3 per month, but I don't withdraw cash that often so it's never been a problem.)  I don't drive anywhere to pay bills, I do it all with recurring payments from my account.

I know some banks are less competitive with these features, but that just means you need to shop around before opening an account, just like any other service.

Sure, but in the UK you'd have to shop around to find a bank account that WOULD charge you for these things. I don't know if they even exist. Maybe at Coutts?

Bill Pay and certain ATMs are usually free. I am still using checks from two moves ago to avoid getting new ones.

Y'all should see what poor people have to pay. I have seen checking account fees of $25/month, just because you can't maintain a minimum balance. And that was a few years ago, so it wouldn't surprise me if it were higher.

[MgoSam]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

I'm in the US and I don't pay for any of those things...  When I was shopping for a new bank after relocating, I made free checks one of my criteria. Online bill pay is also a free service through my bank, and ATMs are free to use - if I use an ATM not associated with my bank, they reimburse me for any ATM fees charged by the other bank (up to 3 per month, but I don't withdraw cash that often so it's never been a problem.)  I don't drive anywhere to pay bills, I do it all with recurring payments from my account.

I know some banks are less competitive with these features, but that just means you need to shop around before opening an account, just like any other service.

Sure, but in the UK you'd have to shop around to find a bank account that WOULD charge you for these things. I don't know if they even exist. Maybe at Coutts?

Bill Pay and certain ATMs are usually free. I am still using checks from two moves ago to avoid getting new ones.

Y'all should see what poor people have to pay. I have seen checking account fees of $25/month, just because you can't maintain a minimum balance. And that was a few years ago, so it wouldn't surprise me if it were higher.

Grrrr! I still remember when we needed to open a business checking account with Bank of America my partner didn't put in enough to cover the minimum balance. We have the bank account because a lot of our customers use BoA and it's easier for them to transfer money (ie pay their invoices) this way. I found out a month later when we were hit for $25 and went ahead and deposited the funds to cover the minimum balance.

[tarheeldan]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

All of these are easily free in the US also. All my banks (Merrill, Schwab, Ally) and the banks I use for volunteer work (TD, Citizens) have online bill pay. Postage is free, the check is free, and you can set up payments to go out on a regular schedule. Most bills you can set up auto-pay on your card, others are ACH from checking.

I know (typically older) people who drive around to pay bills still and am completely baffled by it.

Oh just noticed this - curious, what is an online food account?

[Paul der Krake]

US retail banks have high fees that can be waived with requirements as a means  to keep unprofitable poor customers away.

[paddedhat]

US retail banks have high fees that can be waived with requirements as a means  to keep unprofitable poor customers away.

Many Americans learn this lesson when the grandparents decide to open a savings account for your children. A few years go by, you forget about it, then one day you head to the bank with Jr's birthday money, to get him into the habit of saving. You then find out that the bank has stolen most of your child's money, five dollars at a time, for "monthly inactivity fees". Kind of hard to imagine, if you live in a civilized country, but here in the USA, banks spend a lot of time and effort dreaming up new ways to screw their customers. When it comes to things from shuffling withdraws (checks presented, ATM withdraws, etc...) to intentionally place an account in overdraft and maximize penalties, to creating fake accounts for your customers, these techniques create billions in additional profit. Since our legislative branch of the federal government is largely composed of elected whores that will sell their soul for a couple of tens of thousands of dollars in campaign contributions, banks rarely end up getting punished for any of this. Makes me want to wave the flag, LOL.

[Dollar Slice]

US retail banks have high fees that can be waived with requirements as a means  to keep unprofitable poor customers away.

Many Americans learn this lesson when the grandparents decide to open a savings account for your children. A few years go by, you forget about it, then one day you head to the bank with Jr's birthday money, to get him into the habit of saving. You then find out that the bank has stolen most of your child's money, five dollars at a time, for "monthly inactivity fees".

I kind of wish Fidelity would shut down my account for inactivity. I withdrew all my money and tried to close the account, but they said I had to wait for tax forms to be issued - and the account remained open. In the meantime, they put one cent of interest into my account for reasons I don't fully understand. The website would not allow me to make a withdrawal for an amount less than $10, so I have had a Fidelity account sitting there for years with a penny in it. I don't remember the password any more, and it's absolutely not worth the effort of sorting it out, so I'm just seeing how long it sits there before they do something about it.

[stashja]

My brother got fired for cause. He is also a student. My parents (a) decided this is good news because it will allow him to focus on being a great student, and (b) took out a HELOC to pay his rent. He’s 32. Tell me how not to be angry at and scared for them at once.

[MgoSam]

I kind of wish Fidelity would shut down my account for inactivity. I withdrew all my money and tried to close the account, but they said I had to wait for tax forms to be issued - and the account remained open. In the meantime, they put one cent of interest into my account for reasons I don't fully understand. The website would not allow me to make a withdrawal for an amount less than $10, so I have had a Fidelity account sitting there for years with a penny in it. I don't remember the password any more, and it's absolutely not worth the effort of sorting it out, so I'm just seeing how long it sits there before they do something about it.

Same here with my Fidelty and Schwab accounts. I remember calling in to Schwab and the customer service rep was like, "You aren't going to be charged a fee for having an account with us even if there's a zero balance, do you have a reason to want to close it?" I didn't so I left it open. I haven't used either since sending its funds to Vanguard.

[Jouer]

I kind of wish Fidelity would shut down my account for inactivity. I withdrew all my money and tried to close the account, but they said I had to wait for tax forms to be issued - and the account remained open. In the meantime, they put one cent of interest into my account for reasons I don't fully understand. The website would not allow me to make a withdrawal for an amount less than $10, so I have had a Fidelity account sitting there for years with a penny in it. I don't remember the password any more, and it's absolutely not worth the effort of sorting it out, so I'm just seeing how long it sits there before they do something about it.

Same here with my Fidelty and Schwab accounts. I remember calling in to Schwab and the customer service rep was like, "You aren't going to be charged a fee for having an account with us even if there's a zero balance, do you have a reason to want to close it?" I didn't so I left it open. I haven't used either since sending its funds to Vanguard.

By not fully closing your account, you likely didn't count towards their lost customer quota. Juking the stats.

[RFAAOATB]

My brother got fired for cause. He is also a student. My parents (a) decided this is good news because it will allow him to focus on being a great student, and (b) took out a HELOC to pay his rent. He’s 32. Tell me how not to be angry at and scared for them at once.

Ask them for a HELOC for your house, as you will most likely be housing them when they are destitute?

[Goldielocks]

I can't tell if US banking is crazily expensive or mine is super cheap:

You PAY for cheques
You PAY to pay your bills online
You PAY to top up an online food account
You PAY to drive around and pay bills
You PAY to use ATMS

All of these things are free for me. Our banking is far from perfect, but I'm baffled about how inefficient and expensive the US banking system seems.

Being one of those dreadful socialist countries, we have laws in place that make it illegal to charge for various 'essential' banking services. See, for example, the recently introduced basic bank account. The Americans would like to retain their freedom to pay to perform these regular tasks. Being "unbanked" is one of those insidious self-perpetuating problems that are rife among the American poor (not enough money to open a bank account so you have to pay to cash cheques, etc) but isn't a massive thing over here because anyone can open a current account and bank for free.

IMO the "unbanked" issue  in the USA is based on far, far more cultural norms and other barriers than just the cost of the account.  Many usa accounts are free to set up and use, they are not hard to find.

IDK if it is because of creditors able to garnish / claim your accounts, or illegal immigrants working, or traditional payment in cash, or fees, or access to a bank with extended hours (historically), or distance to the bank, or just plain old "mom and dad don't use a bank so I don't either" or fewer employers there insist on paying by direct deposit or ???

[Gronnie]

You'd be even better off just making one large payment ahead of time for like 6 months of service.

[merula]

At 32, if he were ever going to be a terrific student, he'd have busted his ass and already be a terrific student.

I will say that I have a brother-in-law who spent most of his typical-college-age years in this pattern:

• Register for classes; attend religiously for a few weeks.
• Get stress out over classwork, triggering a depressive episode.
• Start skipping class occasionally, then frequently, then stop going altogether.
• Drop out juuuuust past the date where there's any tuition refund provided.
• Work a part-time job, the earnings of which go solely to hobbies while parents pay for all necessary expenses.
• Get over depressive episode, decide to go back to college. Start over at #1.

However, he's now 31 and attending a trade school at which he is excelling. He's very smart; it's not quite a "not everyone is cut out for college" situation. It's more of a "gifted child just can't deal with things that don't come easily" thing.

He is paying for the trade school with loans, though, so that might figure into his motivation.