Economy Why are Americans so bad with handling money?

[Damien Karras]

There's a personal responsibility angle to individual cases, for sure. I think everyone here can look around their surroundings and point to a few people they know who overspend on frivolous things. Rarely will amy of us admit to improper spending as we tend to reason ourselves into "needing" the things we buy, including luxury items.

The reality is there is also a policy and societal component to it. I'm not well versed on consumer behavior, but I know that marketing companies and advertisers have all the data and science know how to target the people that can be easily seduced. It's one thing to address a need of a consumer, and it's another to create a need. Companies have gotten damn good at creating needs, and no person on this forum or on this planet cannot fall into the trap of being seduced into believing they need a product or a service.

And then there's access to credit. I feel there is not enough restriction over giving access to credit, especially in the form of credit cards to youth. I remember I had trouble with my finances in my early adulthood. I got into too much trouble with my credit card. So I went to the bank to ask to help. I wanted to consolidate my debts (around 5000 of CC debt the time) on an 8% loan. The bank said no because I didn't have enough assets to cover the risk. A week later, I received a letter in the mail saying I'd been pre-approved for a 2500.00 LoC credit card. Luckily I didn't need the money to survive, I just needed a solution to lower by interest payments. But if I were a single mother with little to no money in the bank, I'd jump on the opportunity because it's for survival.

And let's face It, wages never follow inflation and CoL. Every time there is inflation, it is low income earners that are the hardest hit. And we know that the gap between the rich and the poor has been increasing year after year. So yes, we can look at the micros and point to people who can't afford the new iPhone every year, or that brand new Acura instead of buying a used Kia, but when you look at the macros, it makes sense that more and more people today are struggling with debt

 

[Damien Karras]

Also I'll add that Americans are not the hardest hit, funny enough. Canada's debt ratio per capita is higher and has been for a while.

 

[Eusung]

I wonder about those people who order doordash/uber eats for lunch while at work. WTF did they do before these apps came along? Just skip lunch? They seem lazy (the restaurants they order from are literally a few blocks away, they could easily walk and pick it up themselves) so I'm guessing they weren't packing a lunch at home.

 

[Scheme]

Low IQ people gravitate to high price cars. I know a guy who is whining about how he'll never own a home, who is at the same time looking to buy a $85000 car. People really take the Fast and Furious movies to heart.

I think high priced cars are a psy-op by the car industry, constantly associating high price cars with being cool, getting girls, having success, etc.

 

[Prelimtapper]

They screwup their housing/rent situation, then they screwup their car purchase and it just snowballs from there. Sacrifice on those 2 first and foremost. Sometimes its not so obvious. But there's so many times I see a work colleague or a friend struggling to pay for a night out while driving a 100k automobile.

If they are succumb to the pressure of matching the lifestyles of the people around them, then they are just an idiot.

 

[curryjunkie]

most people don’t need to know anything about finance lol

it is useless for most people

there is zero benefit to a society that learns anything about finance

if anything it would make everyone more poor in the long run

Derp of the day....

 

[86'd]

Derp of the day....

I don’t think he’s wrong in his assessment that if more people were educated in finance the world would get poorer.

The banking system is built on consumer spending and usury. If everyone stopped consuming there would be less profit margins for businesses which would equate to less jobs which would equate to less people qualifying for loans/home ownership etc.

 

[evansusmc2]

Because people from other countries don't have enough money to even be bad at handling it.

Here in Colombia it’s the land of the poor. But somehow they find money to spend on Bad Bunny concert tickets and expensive clothes they don’t need. They have no problem with zero money in their bank accounts.

My buddy’s ex-girlfriend took a solo trip to 3 day trip to Barranquilla because she had the money to do so. She overslept on day 3 and missed her return flight. She didn’t get paid until the next day and didn’t have the money in her account to purchase hotel and food for that day. She called my buddy and begged him to send her $90 for a plane to Medellin. He did. She paid him back the next day.

 

[evansusmc2]

I don’t think he’s wrong in his assessment that if more people were educated in finance the world would get poorer.

The banking system is built on consumer spending and usury. If everyone stopped consuming there would be less profit margins for businesses which would equate to less jobs which would equate to less people qualifying for loans/home ownership etc.

I honestly have no problem with people not being able to get loans for houses. 2008 proved that most people shouldn’t have got home loans.

 

[evansusmc2]

I’ve said it many times in this forum. Americans have the worst spending habits of any country on the planet. Which is one of the reasons so many people default on their student loans and or try everything they can to not pay it back. They are too busy buying stupid shit.

 

[evansusmc2]

Yea let's not blame skyrocketing cost of living and stagnant wages.

Blame poor people.

you’d think with those things you mentioned, people would stop buying non essential shit they don’t need.
No one is blaming poor people.

 

[oldshadow]

There are many reasons why some people are like this. Some young people people believe they should have the same lifestyle and things their parents worked all their life to get the day they get a job. Some older people never learned how to budget and plan. Plenty of people want to live beyond their means.

 

[djacobox372]

People are making A LOT less money today than years ago especially when you compare wages to the cost of necessities (rent, food, healthcare, childcare, utilities, transportation).

You have to make 200k a year today to have the same disposable income as an average auto-factory worker in the 80s.

 

[Gutter Chris]

I got my new Jordans & two AR-15s in each hand. fuck yeah. I mean, America, fuck yeah.

I'm sneaking up behind you and I'm about to have your new air Jordan's and 2 ar 15s. Anarchy fuck yea. Gclm!

 

[Damien Karras]

I wonder about those people who order doordash/uber eats for lunch while at work. WTF did they do before these apps came along? Just skip lunch? They seem lazy (the restaurants they order from are literally a few blocks away, they could easily walk and pick it up themselves) so I'm guessing they weren't packing a lunch at home.

I've used these platforms maybe once or twice in my life and they were for large orders. I refuse to spend a dime on delivery when I can just get in my car and get it myself unless I'm absolutely stuck or order enough to warrant delivery with a worthy tip.

My 16 year old daughter once told me about her friends use it all the time to order stupid shit like bubble tea with parents' credit card. The drink goes from 5 to 10 dollars cost. She said the solution is to not tip. I had to sit her down and explain that by doing that, the person doesn't even cover their cost fuel, let alone being compensated for the act. She has a strong sense of justice so she understood right away, but many just don't care.

 

[The Big Yin]

People have always been shit with money. Difference was years ago there wasn't the lines of credit available.

And as for buying unnecessary things, that's human nature. There's Africans living in shanty mud huts, with no electricity, who will pay for a broken TV to sit in the room as it's a status symbol.

 

[Rob Battisti]

Because in a consumption based economy, where the worth of your money diminishes over time, society is geared toward spending and not saving.

 

[boingyman]

A large part of it is the lack of financial literacy.

Personal finance should be a class taught in high school. If I could I would have schools create paid positions (for junior/senior students to rotate) year round. Something where they can work between 4-8 hours per month. With it they can build a small income that they can allocate for spending, opening/contributing for savings and opening/investing in a IRA. Teach them the basics of personal finance and beyond. Better yet have the class be called life skills where they can also learn about health literacy and basic life skills. They can learn how to drive a car, change out a tire, jump start a car, put together a resume, shop/cook healthy meals, basic sewing, prepare for emergency situations, etc.

 

[boingyman]

Because in a consumption based economy, where the worth of your money diminishes over time, society is geared toward spending and not saving.

Yes. Household consumption is about 70% of the U.S. GDP.

 

[86'd]

I honestly have no problem with people not being able to get loans for houses. 2008 proved that most people shouldn’t have got home loans.

My post isn’t really inquiring about peoples personal feelings on home ownership and access to it. It is meant to be more in tune with the reality of how western societies are run.

The fact is, home ownership is a grand way to bring about high productivity servitude while also lining the pockets of banks.

It is also not in the interests of banks and companies to have the middle and lower classes educating themselves on personal finances and how to come out ahead.

The more this society saves and encourages financial stability in the form of savings the more it will hurt the economy.

That is because we are a consumption based society and economy