Living the American Dream
This one comes to us from the 'Ask the Biz Brain' column in today's Star Ledger. I thought it might be appropriate since the discussion (derision) of high-debt living has become a hot topic lately.
I'm speechless every time I read one of these stories. We don't know their story, so we really shouldn't judge, but somehow I have a feeling it wasn't medical expenses that caused this family to max their HELOC and rack up $30k in high interest debt. So just how common is this scenario?
All too common is my guess. While we're on the subject of debt, Consumer Credit increased at the fastest pace in almost a year in April.
Caveat Emptor!
Grim
Ask the Biz Brain
My husband and I have incurred about $30,000 in credit-card debt with varying interest rates. We have no savings, two young children and own a home with a mortgage and home-equity line of credit (which is tapped). We recently received a windfall of about $15,000. What is our best course of action?
I'm speechless every time I read one of these stories. We don't know their story, so we really shouldn't judge, but somehow I have a feeling it wasn't medical expenses that caused this family to max their HELOC and rack up $30k in high interest debt. So just how common is this scenario?
All too common is my guess. While we're on the subject of debt, Consumer Credit increased at the fastest pace in almost a year in April.
Credit Spending, Auto Loans Up in April
By MARTIN CRUTSINGER
Americans increased their borrowing in April at the fastest pace in 10 months as credit card spending and auto loans both picked up.
The Federal Reserve reported Wednesday that consumer borrowing rose at an annual rate of 5.9 percent in April, a significant increase from a tiny 0.8 percent gain in March.
The increase in dollar terms was $10.6 billion, which pushed total consumer credit to a record $2.17 trillion. The Fed's measurement of consumer credit does not include mortgages and other loans secured by real estate.
For April, consumer borrowing on credit cards and other types of revolving loans rose at an annual rate of 4.5 percent after having fallen by 2.3 percent in March.
Caveat Emptor!
Grim
18 Comments:
Even with medical expenses, some families with otherwise identical circumstances come out ok while others go bankrupt.
How can this be?
Don't be a broke bagholding underwater "actor".
You know the types the "hotshots" who have all the goodies, but are sweating it out every month to maintain it.
Don't do it.
The house of cards is cooooollapsing.
Babababababa
Bob
I doubt they thought about what having kids would do to them financially.
Notice how all these college kids & recent grads who work in retail act like they have everything in the world. Like they are on some type of power trip.
Then they have $40,000 in CC debt since their retail job just pays $15/hr.
Stupidity, materialism & mediocrity is what is in these days
College & grad school students don't work either. I went to Hofstra on Long Island for grad school. Commuted from Manhattan three nights a week after working all day.
Everyone wore Abercrombie & drove BMW's & SUVS.
I was the only poor person at the age of 28 making $75,000 a year.
Yeah, the kids not working thing ... ah how things have changed. My parents even though they have money, and no debt, they own their 3 homes out right and have no cc debt. Made me work in the summer and I used to get the strangest jobs too, they didn't care I was down in cape may and I would work in the sea food restraunts cutting fish and shucking shellfish(which if you haven't done it you don't know what a dirty smelly job it is). My parents were of the attitude that hard work builds character. I think the spending is a result of not having to earn it. God I can't fathom that kind of debt, it is crazy to think that their debt is my savings and I am only in my mid 20's.
anon10:36-
LOL! You sound like me. Everytime I start to tell my wife about someplace I worked, she asks "Is there a job you haven't had?"
My parents dropped me off at a golf course when I was 13 and I started caddying that morning. I also detassled corn that summer (in Indiana, like most big farming states, the child labor laws are different). I then worked pretty much every summer, then started working through the school year as a Junior in high school.
Here are some of the other jobs I've had: construction, painter, factory cleaner, warehouse distribution, catering, deliveryman, security at football and basketball games, camping equipment rental manager, student newspaper ad sales, retail inventory counter, dog food plant shipping (the smell was unbelievable and you don't want to know what the ingredients looked like), bottling plant shipping, landscaping for a utility company, telemarketing, moving company, gym reception desk, hockey referee, drugstore custodian, cook at a restaurant, fastfood counter help, etc., etc.
I will do everything possible to get my kids to work when they are young. If for no other reason, you appreciate your nice, quiet, clean office desk job even more.
JM
And everyone in NYC & Long Island needs to drive an expensive European Sedan or a $50,000 SUV. The Porche Cheyenne is very popular.
How do these kids even afford insurance???
I've never bought a new car.
As Robert De Niro said in Casino: "It's all designed to get your money" How true.
As Robert De Niro said in Casino: "It's all designed to get your money" How true.
You can't even live or work in the suburbs of NYC if you don't subscribe to this consumerist mentality.
When I worked in Westchester (Harrison), everyone made fun at me because I drove a Nissan Sentra from 1994 & then an Altima from 2000 (this was in 2002 - 2004).
No one wore anything other than Ralph Lauren, Brooks Brothers or Banana Republic. Then everyone was always complaining about pay & bonuses.
I only made about $45,000 at the time. The average salary was probably between $40,000 - $70,000 because most people who worked in the firm were under 35 without much experience.
minutesfromnyc,
Hey I like my Sirius subscription.
Just like some people pay for digital cable. I'm happy with $10/month basic TV.
smk
perfect urban/suburban car
the only drawback is that thieves tend to salivate on them
Interesting sidebar: when we lived in Indiana, we spent much more on cars, even bought a new red Volkswagon. Housing costs were ridiculously low, cars were kings. Now, here in JC, we take our old car off the road Sept.-Apr., use the Path or rent when we need to, put it back on for summertime fun. Got rid of the mortgage and dependence on the car at the same time. Traffic, more than the consumerist pressures of the BMW-driving Jones, keeps us out of the suburbs. What's wrong with Hoboken, that's another story.
I bought a new car, 1996 Corolla, on financing because I had no money. It now has 190K on it and just passed inspection. I prefer buying a new car and will again (Prius) because I know the exact history. Point is that some choices are better depending on one's circumstances.
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