Comments on Finance for non-Finance Professionals: We Live Beyond our MEANS

Well, Ivs, that seems to be typical of youth or co...

2009-03-19T08:40:00.000-07:00

Well, Ivs, that seems to be typical of youth or college students to be specific.

I bet you were once like that -I was. We are, at one time, so bothered with the pressing issues that greatly affect our lives or way of living and yet we do not have a real understanding of the implications of these issues and our actions. We simply want to be heard.

Now, should they be really concerned? Definitely, YES. But the expressions of those concerned, IMO, should be channeled in more positive ways.

Retirement is expensive, regardless where you live. But it is more expensive, of course, if you are in living in the metropolis. Retirement is expensive primarily because we stopped earning and are dependent on our retirement benefits. That's is why, other than the typical 401k, we should invest on other means that could help us in our retirement.

If I am earning x, What should I secure for my ret...

2009-03-04T19:12:00.000-08:00

If I am earning x, What should I secure for my retirement? By how much should one scale down their expenses after retirement?

You are so right, most of us do not know how to ma...

2009-03-04T19:10:00.000-08:00

You are so right, most of us do not know how to manage our finances well. Anyway I want to point to the other side of things. Recently I went to a university where undergraduate students had made stalls depicting their thoughts through posters, puppets, etc. I saw that most of them had as their theme the financial crisis, the downturn, pollution, stress, terrorism, etc. While it is good to be aware of these things, I dont know if 20 yrs olds should be weighed down by such thoughts. At this age they should be happy and cheerful and excited about their future.

We have to invest on our future because retiring t...

2009-02-28T22:01:00.000-08:00

We have to invest on our future because retiring these days are very expensive

@ RickIMO, greed and the ardent desire to live-up ...

2009-02-24T07:42:00.000-08:00

@ Rick

IMO, greed and the ardent desire to live-up with the Joneses are among the most influential factors why most of us tend to ignore the consequences of going into debt unnecessarily or living in debt.

@ Jennifer

You are absolutely right, is way better if we could learn to live 'below' our means. This way, come recession or not, we will be able to live comfortably.

@ Lord of Logic

In part, I'd agree with you that the financial institutions (systems, if you may) and the government may be blame for our financial woes. However, regardless on how the financial systems work (private or government controlled) and how bad our economy is, we have the primary (even sole) responsibility to manage our finances -how, where, when and on what to spend.

We tend to think that good times last -they don't. Thus, those who have been responsible enough to prepare for bad times can easily cope in any economic crisis.

Thank you guys for the additional insights here. ^^

While I have spent many posts on how it is the fau...

2009-02-24T04:04:00.000-08:00

While I have spent many posts on how it is the fault of the people in trouble for their financial wows, in this environment here I must also assert that there is plenty of blame that can be leveled against the Credit companies and the government as well.
If two people have came to an action to buy a house, one has the most with $10,000 the other only had $8,000. The market price is $10,000. If a banker comes in and says to the low bidder, "The bank will loan you $3000 if you pay them back $5,000 over the next 2 years." The market value just rose to $15,000. Whose fault is it. The buyer for taking it? The bank for offering?
It gets better. Say the government wants to release newly printed money into the system, know how they do it? They don't just drop it over a lucky city. They loan it to banks with an interest rate. A bank then loans it at a higher interest rate to make money. the government is basically not only encouraging, but is run on this kind of bad behavior. are they to blame?
If there are no buyers willing to finance, this situation doesn't exist. (This would require consumers who were educated in economics and finances to understand how big of a gamble expecting to pay 30 yrs. on a house is.) If there are no lenders willing to lend, this situation doesn't exist. (This would require a government make policies that addressed lending credit the same way it addresses counterfeit money.) If there is a government that discourages these kinds of practices, then the current situation doesn't exist. The government requires we leave high school knowing how to read, write, and basic math. Isn't it their responsibility to require we leave knowing how to budget and assess risk? (This would require an electorate to elect leaders who were willing to tell them, "No you can't". You have to climb the ladder and pick the good fruit. The stuff on the ground will get you sick.)

One last point in defense of the buyers. this principle of credit driving up prices isn't just applied to houses, but anything you can use a credit card to buy is affected by this point.

I couldn't agree with you more! Debt is the direc...

2009-02-21T16:47:00.000-08:00

I couldn't agree with you more! Debt is the direct result of living a lie - and you live a lie if you spend more than what you make. Plain and simple.

Live within your means. Better yet, live BELOW your means.

I've always been frugal and worked within a budget. That is why, compared to our peers, our family is much better off financially, even on one income!

I don't know about you but when I die I don't want...

2009-02-20T18:28:00.000-08:00

I don't know about you but when I die I don't want to look back and think about all the coupons I clipped and pennies I saved.

If by now people don't understand the repercussion of debt they either don't care or get in debt knowingly.

IMO, frugality is one of the best traits of the ba...

2009-02-07T14:27:00.000-08:00

IMO, frugality is one of the best traits of the baby boomer generations and where my generation should really learn from.

In our pursuit of the American dream, we shelve 'frugal living' on the side. We want more, we crave more, and we spend more on things that we don't actually need or we can live without.

Thank you for sharing Jan and my prayers for David's health.

We too are retired and living on a fixed income be...

2009-02-07T13:46:00.000-08:00

We too are retired and living on a fixed income because of David's health. But we live comfortably because we are careful and frugal. We owe nothing on credit cards, always pay cash and always ask for the best deals. We rarely eat out, don't buy packaged food, and who needs any more clothes?

That was admirable of you Mam Flo - I hope I could...

2009-02-06T18:48:00.000-08:00

That was admirable of you Mam Flo - I hope I could do the same. Besides, it's never too late to start ayt.

Unfortunately, I am no longer expecting any retirement benefits because I am on freelance now. However, I am really committed now on saving more and spending less.

Thank you for gracing this blog with your insight.

Namaste ^^

We are retired and we retired well and we are fina...

2009-02-06T17:58:00.000-08:00

We are retired and we retired well and we are financially secure, we actually have more from pensions than we made while we worked (no joke) and that doesn't count the large savings/investments we have.
We saved, saved, and saved some more, we did with what was necessary and didn't afford more, we seldom went out to eat (I'm a great cook), we drive older cars (we keep them up) mine is 13 years old and my husbands is 12 and both were pre-owned vehicles when we bought them.
Our home is almost paid off and we have no other debt.