The author came in and guest lectured today and while a lot of the psychoanalytical babble was a bit over my head, he seemed to be making some very good points when it comes to savings (or lack there of) by the american people. Interesting read for those who looking for something different
'Buy it now for 500 a month or save 400 a month and buy it in two years'
- Instant gratification, financed.
Ithink we have elevated our standard of living so that things that used to be considered 'luxuries' are now 'must haves'
For instance: multiple cars, big home, nice toys, etc... Our financial system has allowed people to buy all these things when they dont have the money for them by going into debt. People lived thinking how much is my monthly payment going to be, not how much should I save so I can buy this.
I'm making it a personal goal to get out of debt, going to start by paying down the car/student loans, then work on the mortgage. Then I'm going to save to buy my toys, not borrow....
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I also think we're going to see thrift come back. As credit drys up, people will be forced to save for things they want.
And I think that will lower the materialistic attitude of this country. Once people have a large sum saved up they will be less likely to part w/ it for niceities, unlike now where its only a few extra dollars a month...
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Hoyt VTEC 28" @ 74# 283 ft/s
GTProHunters 5575 wraped and Blazed
100 Grn Rcky Mtn Snypers & Stinger 4 Blade
STS, QAD Ultra Rest Pro
I also think we're going to see thrift come back.Â* As credit drys up, people will be forced to save for things they want.
And I think that will lower the materialistic attitude of this country.Â* Once people have a large sum saved up they will be less likely to part w/ it for niceities, unlike now where its only a few extra dollars a month...
Credit isn't going to dry up, it's just going to go thru a dry spell. Now that creditors know they will get bailed out, they will have even less discipline than before. They will make nice for a while, just until they think you forgot, then back to business worse than usual.
The vast majority of the future of our country is being taught in public schools. How much common sense do you see coming out of there? You know why Obama's slogan is "Hope?" It's because it is easy to spell. Don't look for improvements in the future.
Thrift is a virtue. Most Americans are not interested in cultivating their virtues but rather in feeding and coddling their passions/desires. This makes them vulnerable to the seductions of advertisers -- buy a new Chevrolet and become free was such a pitch some years ago (which was backwards, as buying would likely mean putting one's neck into the monthly car payment tether rather than increase one's freedom) -- and to subscribing to the consumption driven economy. I'm not saying I'm free of this or that I'm a pillar of thriftiness, I'm just making some observations.
There is an ingrained psychology in the US that is opposed to thrift. I drive a 10 year old Toyota Corolla with 169,000+ miles on it and I live in the Dallas, Texas area. I'm not from here originally. Something I have learned is that folks here in North Texas are into external appearances -- expensive cars, big houses, big boobs (if nature did not favor you in this regard, well, pardner! you're in luck, because modern cosmetic surgery has an answer for you!!!). I feel a little gauche pulling up to the local high school to pick up my daughter from drill team, particularly when surrounded by late model Hummers, Escalades, Navigators, Excursions, Suburbans, Tahoos, etc. And my daughter gets kind of pissed that I pick her up in this vehicle, rather than our late model Suburban (parked to save gas -- still need it for elk hunting, deer hunting, long family trips) or our later model Honda Civic. New. Shiny. Clean. Even cleaning and polishing the tires. But other attributes, which are not externally visible, are much less valued here in the US and even lessso in North Texas.
It would require a significant cultural change to move away from this fixation on observables and turn instead towards internal things -- not just spiritual, for example religion, but physical health, cultivated intellectual life, etc. Long term financial strength loses, in the current US culture, over current material possessions purchased on credit. It would also substantially change our economy. Our economy thrives on consumption of consumer goods -- buying new cars every 4 years, buying new gewgaws for the home, replacing furniture because it is old -- either showing signs of wear or perhaps mere no longer novel to the owner. My father didn't replace a chair unless it did not function to structurally support his body weight!
People who've made good decisions and choices will pay for all of it too.
Which Americans have made good choices? Maybe our oldest generation, which is now on the final glide path to the great beyond.
Look around. Most everyone else has not.
vc1111: I beg to differ. I've made many good choices, and I'm 52.
(1) I decided to get a second degree -- a BS Electrical Engineering-- because my first degree -- BA English -- wasn't working to provide me good employment. I worked full time while attending college part time. I took advantage of my employer's tuition benefit program to do this. Others of my work colleagues who also lacked the engineering degree chose NOT to shoulder this painful burden and forgo leisure and repose. Good decision to my side of the ledger. I'm now working as a patent agent, combining my engineering experience and education with my writing education to achieve very high earnings and greater freedom from unemployment risks (relative to engineering at any rate).
(2) I have always chosen to have fixed interest rate mortgages. I considered a job offer involving moving to Massachusetts where real-estate was over priced. I chose instead to reject this job offer. Later I found a better job offer in North Texas where real-estate was much more affordable ($115,000 for a brand new 2300 square foot home, large lawn, very high quality public schools, 30 minute commute from 100,000s of high paying professional jobs, safe affluent community). Needless to say, the value of my house has substantially appreciated -- but not doubled in value -- since I bought in 1996. I refinanced my 7.7% 30 year mortgage to a 5.5% 15 year mortgage in 2003. Others may have refinanced for 30 years and taken out money for toys.
(3) I chose a good woman for a wife and remain married to her still after 21 years of marriage. Our three children are healthy and seemingly well adjusted. They are not into drugs or alcohol. By setting high expectations, having them in a town with good public schools, and placing them in Pre-AP and AP courses, they have gotten good educations and seem to be on track. Others may have been impulsive, made bad matches, gotten off track in their marriages, gotten divorced, not paid attention to their kids, let them coast through school, etc. I look at the health of my marriage and the success of my kids, and how other kids look to my kids for a positive example and for motivation as a strong barometer of my success and having made the right choices.
Back to the comment of Stealthycat II. Those who have made the right choices will pay for it. Because of my choices, I am now, at the age of 52, just getting to the point where I have more than enough money to stayeven with expenses-- pay car payments, pay mortgages, provide for college costs, have a modest family vacation. But now it seems that the government is liable to come knocking on my door and tell me that since I have applied myself and am reaping the benefits in higher income, I will get to pay an extra burden of the toll for the messes of others. I think this is what Stealthycat II is referring to. And, being fair, yes probably it may be a lot of yet older people who were thrifty and denied themselves material comforts to provide amply for their retirement, to avoid being a burden on others, who may end up being overly taxed.
Read Dave Ramsey's "Total Money Makeover." It's not a textbook on economics. It's the right decisions for every person to make with their finances. It won't be over anybody's head. It may totally change your outlook, and improve your life.
Whatever Happened to Thrift
