Poor financial decisions are not the exclusive domain of the poor

posted by Jeff | Sunday, March 26, 2017, 11:05 PM | comments: 0

Americans have an expectation problem when it comes to quality of life. I'm not exactly sure how we got here. I can say that when I was in my late 20's, I made all kinds of stupid decisions about how I spent money, and I still had a pretty good quality of life. It was the turn of the century, and that was a time where I made $40k a year and my previous wife made a little part time cash and a graduate assistant stipend. We had a nice apartment, ate out once a week, made frequent visits to amusement parks, had nice computers, spent lots of money on video games and DVD's (they were hot then), and maintained a healthy balance on our credit cards. We both had new economy cars, too.

Now I know that we didn't need to buy a lot of the crap that we did, and carry the credit card debt, but we still managed to not do anything colossally stupid that would have prevented doing the fun stuff. We didn't try to buy even $20k cars or buy a house until we had something worth putting down. The bottom line is that we lived within our means, mostly.

Somewhere along the way, our culture decided that this wasn't enough. People started buying more house than they could afford (and let's thank the banks and the feds for allowing them to borrow, that worked out really well in 2008). Bigger and more expensive cars were necessary. Eating out frequently, after filling our shelves with stuff we didn't need, became normal. Oh, and spending five years in college on loans and expecting a bachelor's degree to be a license to print money was a thing, too. If you can't achieve this by the age of 30, then it's not "fair" and the system is broken.

While I get that the working poor have a more legitimate case to make in terms of not being able to get by (though I'm convinced that my family of three could easily get by on $25k/year each parent living in Central Florida if we made certain concessions), it seems like some well-off people can't figure out how to manage their money either. Like this pile of dipshittery who "scrape by" on a half-million per year living in NYC. There are so many ridiculous items in their budget that I don't know where one starts.

Here's the thing... I know people who are perfectly content and happy selling stuff on Etsy and being artists. They spend and live appropriately for the amount of income that they can generate. Their expectations match the nature of their work and lifestyle. Why is this lost on people who can make ten times as much?

I remember first learning about budgets in grade six. I don't know when or if they still teach this stuff, but they should. Basic budgeting with expectations relative to the work you can perform shouldn't be that hard. I made $38k my first year as a professional (in 2017 dollars), and I felt rich. In fact, sharing a place to live, even with a "poor" grad student, that's exactly how I felt. Expectations are everything.


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