How do people have so much debt?

[Spectral]

Because people want everything right now. Instant gratification.

Save money for a car? No, I want it NOW! Save money for a new PC? No, I want it NOW!
Work yourself into a better financial situation before buying a house instead of renting? No, I want it NOW!

Given how low interest rates on cars are, buying with cash is a pretty silly financial decision. Likewise with mortgages.

Renting is also a perfectly viable and reasonable choice for young professionals that want to maintain flexibility. Rushing into a poor housing choice is a much worse option than a stay-the-course approach to renting.

[Macaquerie]

The economy simply wouldn't work if people stopped wasting money on useless crap and just stuck to wholesome, honest living, because given that nearly all of jobs more or less have to do with producing said useless crap, we'd all be out of work if people suddenly decided to live within their means.

[Djuntas]

You guys should see Luksusfælden on TV3 (luxurytrap)...basicly new retards every week.

https://www.youtube.com/watch?v=6XKJ...annel=TheDenux

And this is just Denmark....some people haha.

Granted there are people who get fucked in the ass due to divorce or unable to sell the house for what they bought it for...that ruins you, and it happens a lot in Denmark.

[Tennis]

The economy simply wouldn't work if people stopped wasting money on useless crap and just stuck to wholesome, honest living, because given that nearly all of jobs more or less have to do with producing said useless crap, we'd all be out of work if people suddenly decided to live within their means.

The economy would adjust. That's what the free market is about.

[Aeluron Lightsong]

I don't have an real debt anymore. (I have debt for the sake of gaining more credit, but I can pay it off instantly with my bank account, should I ever desire to.) However, I used to have a large amount of debt which was accumulated by from exes that I had shared bank accounts and credit cards with that left me with the debt after severing their names from them after the debt ran up really high.

When I hear stories like these, I get more dedicated to keep my own money...incase shit happens.

[Tennis]

What magical fantasy Canada do you live in where you can find a decent college / uni within reasonable commute of everybody? Live at home with your parents while going to uni? What happens when you are one of the significant (like, probably 90%) number of people who are not special snowflakes who just happen to have a family home within spitting distance of your university of choice?

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Canada is an urbanized country. In all the major population centres, there are multiple options for tertiary education.
Toronto, Vancouver, Montreal, Ottawa, Calgary etc.
All of them have many many options. If you study and give it your all, you should certainly be able to get accepted into one of them.

So basically the vast majority do have the opportunity to stay at home and go to university/college.

[Lady Dragonheart]

When I hear stories like these, I get more dedicated to keep my own money...incase shit happens.

My issue is being trusting with my partners, while merging accounts and bank cards makes things easier to control, and therefore make money / reduce debt, it resulted in me being taken advantage of in the past. :|

[Nynax]

I don't get it. Whatever happened to living within your means?

For example :



What does it mean to have 16K debt exactly? 16K owing on your credit card bill?
Why would someone spend so much when they can't even pay it off at the end of the month?
This just doesn't add up.

I have 100K in student loans, no other debt.

But make no mistake that it was a very calculated decision, my first job after graduation i'm making 3x more + benefits than I the job I quit to start school. Even with a big monthly repayment bill, I still have more spending money, a higher quality of life, and for the first time i'm not living paycheck to paycheck.

[Tennis]

Sure ... the only thing you lack is this thing called Empathy ... Some people have kids , wife , pet ....And as any "normal" person they want the best for them and thats my dear friend is where all the logic of the world ends . But i doubt you will understand coz for that you need to be a human being.

A pet? That is a luxury. Why are people getting pets if they can't afford it? If this person and their wife are working, how can they go under besides a calamity or besides being absolutely irresponsible? Empathy has no relevance to this.

[Hotmail]

Because if we spend enough it will eventually trickle back down on our faces.

That's how it works, right?

[Sazabius]

MRI + CAT scan you didn't actually want or need?

[xenogear3]

Why not?

My credit card interest rate is only 11% today, compare to 16% in 2008.

These are free money you know.

[Spl4sh3r]

This is a reason I will never get a credit card. My card draws directly from my bank account, if I have nothing on it then I can't buy anything with it. And when I get a partner I won't pay for them unless they have an income as well

[Zan15]

Step1: Get a decent car (no more then 6-7k)
Step2: Get a job
Step3: Take a loan, buy house/apartment.. Don't rent mate
Step4: Save money, learn the market and use it for stock
Step5: Debt free

Don't try and do above in 1-2 years.

you are going to pay off a house in 1-2 years?

[Xandrigity]

Loans they shouldn't have taken on be it mortgage, school loan or credit card debt. Unfortunately they don't teach how to not destroy your credit before your 21 classes in high school.

[Seirith]

My uncle died suddenly at the beginning of 2015. My aunt had a heart attack and a stroke a few months after and ended up having to go into a NH. My mother is now her only living relative so it was on her to to help find a NH, which meant going through all their financials. Aunt is now 70 and uncle was that age as well. Aunt was a career math teacher right out of college, uncle in the military and then worked as a town superintendent, they had no children. Upon his death they (mostly he) had $200K in credit card debt on about 20 different cards and a second mortgage off $115k on a condo they bought back in 1995 for 90k. They had less than 5k in a bank account and NO retirement accounts.

They shopped all the time, my aunt always had new name brand clothing, new cars, they collected stuff and only paid off the minimum or used a card to pay off another cards minimum. My aunt gets almost 5k a month in pension and yet they had less than that in the bank.

My mother and I were astounded and shocked at their financials. Two people who had good careers and no children.

My husband and I have zero credit card debt and never have. We pay both our cards off every month. I am lucky to have no school debt because I paid it all off from an inheritance when my grandmother died. I could not imagine living in credit card debt.

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How? How do you spend 1750 on student loans? Why do you have a house costing 1750 aswell when u already have 1750 student loan? Pay it off, then find a house. Also, in Holland 1750 mortgage will get u this:



So why u pay so much for your house? You need such a big house? For your reference, thats picture is masonry. Not wood. So more expensive.

$1750 is for him AND his wife, not just him alone. Also, Holland and the US are two different countries, you cannot compare housing there and here. I live in a relatively inexpensive area and pay almost $700 a month in school and property taxes, just TAXES. That doesn't include my mortgage payment. In California or NYC $1750 a month might get you a studio apartment but more likely a room with many roommates.

http://streeteasy.com/building/257-c.../5f?featured=1
A 1200 sqft condo for just under $5k a month in NYC.

[Guruftw]

you are going to pay off a house in 1-2 years?

Maybe read? DON'T TRY AND DO ABOVE IN 1-2 YEARS..

[Varaben]

How? How do you spend 1750 on student loans? Why do you have a house costing 1750 aswell when u already have 1750 student loan? Pay it off, then find a house. Also, in Holland 1750 mortgage will get u this:



So why u pay so much for your house? You need such a big house? For your reference, thats picture is masonry. Not wood. So more expensive.

As I said, 1750 is for car AND house. My house payment is about $1250, car is about $400. Insurance is about $150. I was lumping a few things together, sorry I wasn't clear.

I spend $1750 on student loans because my wife and I both went to grad school and it's expensive as fuck. My wife paid about $40k for 2 years of MBA and that's after having a 50% scholarship. I paid about $35k for mine. We're paying hers off in 5 years instead of 10, so it's accelerated. You say "pay it off." No shit, that's what I'm doing. I could have bought a cheaper house probably, but in my area this one WAS pretty cheap.

TL;DR shit's expensive.

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That is expensive. Maybe delay having a baby till financially stable.
Also wait a second, $1750 a month for a car? There really isn't a need to spend that much...

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18K is a serious sum but would be worth it if the education provided you with a decent occupation.

I guess my post wasn't clear. $1750 = house + car + insurance on both. The total should have told you that it wasn't 1750 for house and 1750 for car. That WOULD be excessive. The point is that you didn't used to HAVE to delay having a baby until you're financially stable. Should we wait until we're 35? or 40? I'd say we are financially stable (no credit card debt at least); the point of my post was that if you buy the things you think you should be able to buy (car, house, baby, education), shit adds up quick.

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Loans they shouldn't have taken on be it mortgage, school loan or credit card debt. Unfortunately they don't teach how to not destroy your credit before your 21 classes in high school.

Here's why you have to get student loans.



Point being: Median income hasn't changed (note this is 1971 to 2012, the most readily available data. It's worse today) in 40 years but college costs have skyrocketed ($2400 to $8800). All data here is adjusted for inflation. You used to be able to work 20 or 30 hours a week and pay for college + food + rent. It's impossible to do that now. I started college over 10 years ago and it was like that then and tuition has only increased. It's easy to say "just take no loans out, no big deal!" But every business expects a college degree for a $12/hr job ($25k per year).

In 2016, average public school tuition is $9400 for in state, public colleges.

[Xandrigity]

While college tuition is out of hand I still don't think it's right to take on debt you cannot pay off. Ppl could cut cost by doing things like doing two years of a community college and transfer for the last two.

[Elegiac]

While college tuition is out of hand I still don't think it's right to take on debt you cannot pay off. Ppl could cut cost by doing things like doing two years of a community college and transfer for the last two.

Which still leaves for a lot of outstanding debt, go figure.