Stupid financial decisions

[slag]

Don't jump off a skyscraper without a parachute or similar protective equipment. That is dangerous and stupid. Here, look, there is a 4 story building instead.

Dave's advice is basically the same. Yes, he improves the situation of the truly desperate, but it is never the best advice.

I take Dave's advice with a grain of salt. The goal of his course/book/whatever is to gain financial independence and be smart. Create a budget. Pay off debts, live debt free and be happy. Basically, be smart. It might not work for everyone, it might not be the best solution for many, but the principles laid down are sound financial advice for those who need it or want structure in their lives. Personally, I believe I know what it takes without Dave to be smart financially. However, my spouse who is a finance major, doesn't. She will benefit from what he says.

 

[Schfifty Five]

Don't jump off a skyscraper without a parachute or similar protective equipment. That is dangerous and stupid. Here, look, there is a 4 story building instead.

Dave's advice is basically the same. Yes, he improves the situation of the truly desperate, but it is never the best advice.

If his advice is the only thing that will help a desperate person, then it seems like it is the best advice for that person.

 

[Ken g6]

I just can't get behind someone that tells me to use a debit card over a credit card (paid off in full every month).

If you're an alcoholic, then having a glass of red wine with dinner to improve your heart health is not a good idea. Same principle.

 

[Wuzup101]

If you're an alcoholic, then having a glass of red wine with dinner to improve your heart health is not a good idea. Same principle.

I completely agree, but I also don't think that credit cards are the evil that he portrays them to be (for most people). It takes a special kind of "spender" to rack up tens of thousands of dollars worth of credit card debt buying consumer goods; however, Ramsey makes it seem like that's the "social norm." Frankly, even if there was no points / benefits to using a credit card (i.e. extra warranty, price protection, etc...) I would still use one over a debit card for the scam/hacking/ID theft protection. If someone gets my card number, I want it to be a credit card that's fully protected, not a debit card where the creeps can directly draw down my back account.

 

[monkeydelmagico]

The stupidest financial decision I ever made was to get married. Followed closely by having children.

If I had it to do over again I wouldn't change a thing.

 

[BD231]

I've never had enough money at one time to be stupid with it ..... i figure that's why I can't get a single female in the entire San Francisco bay area to sleep with me.

 

[SearchMaster]

however, Ramsey makes it seem like that's the "social norm."

I hate to break it to you but it *IS* pretty much the social norm.

According to Google (Nerdwallet), the average amount of CC debt for households that carry CC debt is over $16K. If you divide the total amount of CC debt ($747B) by the average CC debt per household with CC debt ($16,061), you will find that 46.5M households are in CC debt. Sounds like a social norm to me.

 

[MaxDepth]

Refinanced house down to a 10 year note at half the interest I was paying before. All cars paid for.

Now just trying to reign in our monthly expenditures. And yes, I'm the one walking through the house turning off lights and telling everyone as I'm doing it too. (Yes, I've become my parents.)

 

[jlee]

I hate to break it to you but it *IS* pretty much the social norm.

According to Google (Nerdwallet), the average amount of CC debt for households that carry CC debt is over $16K. If you divide the total amount of CC debt ($747B) by the average CC debt per household with CC debt ($16,061), you will find that 46.5M households are in CC debt. Sounds like a social norm to me.

I just looked that up and the credit card to mortgage debt ratio is much smaller than I would have anticipated.

 

[Mai72]

Refinanced house down to a 10 year note at half the interest I was paying before. All cars paid for.

Now just trying to reign in our monthly expenditures. And yes, I'm the one walking through the house turning off lights and telling everyone as I'm doing it too. (Yes, I've become my parents.)

Eat all your food. Turn off the lights. We were all told to do these things and it's a very middle class thing to do.

I look at it this way. If I were making more than enough money the lights would be the last thing I'd worry about. Hell, I'd leave them all on and I'd leave food on my plate. Just because I can.

This middle class mentality that we were taught is bullshit*t. You aren't going to save yourself to wealth. And yes, wealth is important for you and your family. I want to be able to help my family financially whenever I want too. I'd like to get to that point that money doesn't matter because I have so much of it. The only way that it happens is to increase income. And invest. And have those investments pay me back immediately so I can invest some more.

 

[dullard]

This middle class mentality that we were taught is bullshit*t. You aren't going to save yourself to wealth.

The ONLY possible way to become wealthy is to spend less than you earn/receive.

Your point is taken, that spending so much time on the small savings and not focusing on the large savings/changes to income will make becoming wealthy a slow process. But, mathematically you cannot become wealthy without learning to spend less than what comes in. Shutting off the lights is a very simple way to start to learn this process. Shutting off lights isn't required to be wealthy, nor will it alone make you wealthy. But if you can't learn to save on the simple things, how do you expect to learn on the difficult ones?

Otherwise you might just end up having a massive income and still living paycheck-to-paycheck. 25% of people earning over 6 figures haven't learned that lesson: https://www.moneytips.com/one-third-of-high-earners-live-paycheck-to-paycheck/997

 

[slag]

Refinanced house down to a 10 year note at half the interest I was paying before. All cars paid for.

Now just trying to reign in our monthly expenditures. And yes, I'm the one walking through the house turning off lights and telling everyone as I'm doing it too. (Yes, I've become my parents.)

Me too, but I'm so tired of doing that, I installed Zwave switches and can tell google home to shut off the boys lights and it turns off their hallway light, both bedrooms, and bathroom light, or I can log in to the smartthings interface and do it from my phone.

 

[LevelSea]

I've never had enough money at one time to be stupid with it ..... i figure that's why I can't get a single female in the entire San Francisco bay area to sleep with me.

you may want to try single males then.

 

[BD231]

you may want to try single males then.

removed




Homophobic postings are not allowed here.


esquared
Anandtech Forum Director

 

[Exterous]

I hate to break it to you but it *IS* pretty much the social norm.

According to Google (Nerdwallet), the average amount of CC debt for households that carry CC debt is over $16K. If you divide the total amount of CC debt ($747B) by the average CC debt per household with CC debt ($16,061), you will find that 46.5M households are in CC debt. Sounds like a social norm to me.

That article was my first thought when I read his post. While the 40% of households that do it aren't quite the majority its a hefty percentage

If it were up to me all gay males would be eradicated from earth.

Always nice to see when threads go from financial discussions to overt homophobia

 

[slag]

Always nice to see when threads go from financial discussions to overt homophobia

I reported him. It's in poor taste, not the topic of the thread, and we don't need that kind of crap around here.

 

[Red Squirrel]

I've never been able to justify the cost of a new car. Glad enough people can though, to keep the used market going. You can buy a 10 year old car that will still get you to where you need to go, and pay like 1/10th the cost, cash, without any kind of monthly payment. I'm on my 2nd car now, I probably put like 2-3k into it, but overall it's still less than if I was making payments.

A truck would be nice, even used ones are way more expensive though. But for what I would use a truck for, I'm probably better getting a cargo trailer and a hitch for my car. For much bigger loads, I can just use the delivery service for whatever it is I'm getting.

Any financial decision that can remove/avoid a monthly payment is always a good one in the long run IMO.

I'm looking at buying a high efficiency water heater for the same reason. Kill two birds with one stone: get rid of the monthly rental payment, and use less energy. It will cost me more up front, but it will pay for itself over time.

 

[Wuzup101]

I hate to break it to you but it *IS* pretty much the social norm.

According to Google (Nerdwallet), the average amount of CC debt for households that carry CC debt is over $16K. If you divide the total amount of CC debt ($747B) by the average CC debt per household with CC debt ($16,061), you will find that 46.5M households are in CC debt. Sounds like a social norm to me.

Damn - okay that is way more than I expected. Point taken! How the hell does one rack up $16k in CC debt. All this time I thought student loans were the real evil... but maybe it IS the credit cards. I'll continue to use mine, but shit... perhaps I'll think before I 1 click buy stuff on Amazon.

 

[Tweak155]

I have a mix of spending on stupid things but also overall very frugal for my income. Ultimately, at least based on what I've read, I'm way ahead of the average Joe. I find the simple mindset I have over those I know that are in debt is that I really have to convince myself I want something rather than being excited in the few ways something could benefit me.

 

[kranky]

Damn - okay that is way more than I expected. Point taken! How the hell does one rack up $16k in CC debt.

A combination of things...
In many cases it's the mindset of "it's only going to cost $X per month!" Blow $300 on some trendy clothes, the payment only goes up $6-$9 more a month. Repeat dozens of times, and pretty soon you're up to multi-thousands in debt on a credit card.

Then you have the "Well, I deserve it" attitude. When your friends have all been going on cool vacations and buying stuff and they flaunt all of it on Facebook, some people feel like they deserve to do that stuff too, regardless of ability to pay.

And there's the people who spend to feel good ("retail therapy" it's called). They get a rush when they go shopping and it makes them feel good to acquire new stuff. Saw a episode of Hoarders the other day. A woman was in a Goodwill store looking at stuff (not stuff she needed). She actually admitted she feels driven to go all the time because someone else might beat her to a good deal. She sat in a living room chair, looked at the $59 price tag, and said "This is mine." Chair was probably worth $59, but you can't go around buying things just because they are cheap. Her brain told her she was saving a couple hundred dollars; a normal brain says "Don't waste $59 on something you don't need."

 

[zinfamous]

removed




Homophobic postings are not allowed here.


esquared
Anandtech Forum Director

...this [redacted comment] pretty much explains why you are having problems. Seek help.