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(MSN)   How I dug out of $80,000 in debt. Step #1: Start by saving even just $5 a month somehow   (money.msn.com) divider line 221
    More: Interesting, Married... with Children, SmartMoney, young professional  
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15059 clicks; posted to Main » on 13 Jun 2013 at 6:01 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-06-14 01:07:44 AM

dustman81: whistleridge: Let me guess:

1. Cut rent as much as possible, either by moving in with parents or with 8 roommates
2. Don't eat out, and eat rice and beans at home
3. Work 80 hours a week, probably including nights and weekends
4. Don't have a car payment, cell phone contract, or any other big ticket expenses
5. Kiss all entertainment and new purchases goodbye
6. Oh...and one of those 2-3 jobs will need to pay significantly more than minimum wage

/ at the end of the day, it's really just about #6

You don't need a brand new car (with the attached car payment). Get a good used car
You don't need the unlimited everything iPhone 5 plan. Get a Tracfone
You don't need the cable package with every premium channel on the planet. Get an antenna

Those three alone will save you at least $500 a month.


Get an antenna? Sure, we'll follow that advice, grandpa. I'd discuss horse-drawn carriage providers with you too, but I see those kids crossing your yard again.
 
2013-06-14 01:12:02 AM

mbillips: Yeah! $5 a month after a year is $60! And after 10 years, with compound interest at 2 percent, it's almost $1,000!

/Don't see how this is touching that $80k. Especially if it's accruing interest.


Yeah, pretty much what I was thinking. $5/month isn't gonna do shiat...
 
2013-06-14 01:15:56 AM

Devo: Don't carry a balance on your credit cards.


Yeah, but that Farks up your credit score. If you have them, and have no balance, they do you no good. You don't have to max them out, but they recommend about 40% of your balance, and pay them off each month.

Part of it is to not have too many cards with too much of a limit. We have a single $500 card that is easy to pay off, yet still has enough of an limit to help when a car repair or emergency tank of gas comes up before payday...
 
2013-06-14 01:22:40 AM

Smeggy Smurf: Phones are the single most expensive waste of money.


The ability to access the collected knowledge of humankind anywhere and anytime is a power everyone should have. The cost is almost entirely the user's responsibility, unlike, say, operating a car or owning a home, which have a much greater negative social impact than having a smartphone.

In my opinion, the single biggest waste of money possible is smoking cigarettes. No question about it, it's the most expensive hobby you can have. The smokes themselves are expensive, the social cost is high, and of course, the health problems are also costly. And I say this as a smoker who's trying to quit.
 
2013-06-14 01:24:14 AM

JWideman: Most probably live like they make $50k a year while only making $25k a year, putting the balance on credit cards and only making the minimum payments. Eventually the minimum payments become more than they can afford and suddenly they realize how deep they've gotten themselves in debt.
And then there's the people who live within their means only to lose half - or all - their income. For the past 20 years at least, your continued employment has been unrelated to your performance. You can get fired just because the boss wants more profit. When that happens, it gets pretty hairy. Even if you've only lost half your income, the portion of your income going to your cost of living doubles. That's some pretty harsh adjustment.


But that's the thing - what kind of adult couple is actually only earning 25k a year? You can get more than that with two working adults both doing minimum wage. Hell, you can mow lawns and make more than that in a summer. And if you're a single adult, making 25k isn't great, but it's enough to afford a comfortable living in any city in any country in the world. As far as getting laid off, of course that's an issue. It's also fairly easy to get out of. When we started this business, my fiance was making 1600 a month in unemployment, and I had just gone through a major divorce and the resultant upheaval ended in me unemployed for a month or two. It's not a harsh adjustment at all. All of a sudden, you have less money - you pay off what debt you can, default on whatever debt you either can't pay or the debt holder isn't willing to compromise on (because the collections company WILL compromise, and you can knock out half the debt immediately), and stop spending money until you're out of the hole. It isn't difficult at all.

My bigger question, though, is where is everyone's money going? Until this year, I made a middle-class salary in one of the most expensive cities in the world, and for all intents and purposes lived like a king. Meanwhile, I hear people in West Bumfark, Iowa who cannot possibly be making that much less (despite 1/10th the cost of living. I've checked. My ex-wife lives in MS - for what I paid in rent in NYC, I could have bought a third of a brand new subdivision. Not a third of a home in a subdivision. A third of the homes IN a subdivision) constantly complain about how they don't have the money to do anything, can't afford to eat anywhere nicer than an Applebee's (and even that, only once a month), have to pinch every penny when grocery shopping, never take vacations outside of the states (or maybe a once-a-decade trip to a "safe" resort in Jamaica or Puerto Rico or Mexico), and just live miserable spartan lives. Where is all their money going? What are they doing wrong, or what am I doing right? It confuses the shiat out of me.
 
2013-06-14 01:26:14 AM

doglover: SevenizGud: Eating out is the #1 money waster for most people.

You fuggin come to my house and cook for me then mr judgemental.

I have two 8am-11pm days and work Saturday mornings. There's usually not enough time in the day and energy in my body left to cook anything worth eating at home and clean up the mess. So I eat out.

Also, don't know the last time you went grocery shopping, but most of my good meals come out to the same price as something cheap from take out as well.

So the real choice is between paying $10 for lunch with clean up or $10.50 for lunch with no cleanup.


One word for you to eat well cheaply: Costco. Even when my wife and I were really struggling, we could eat steak on a regular basis, (good steak, too) and I still slept with a clean conscience. We can get a 4 pack of nice thick ribeyes for about $28, and freeze all of them. They weigh close to a pound each, and my wife and I alone would eat about 1 1/4 between us. Throw in a couple of baked taters and salad, and the two of us are eating steak dinner for about $5.50 each. Add in my kids, and it gets a little cheaper, since they don't eat a full steak either.

Not only are the meat prices good at Costco, the quality is good, and the cuts are very generous. For the past 12 years, we've probably bought grocery store steaks 10 times total. It would be a payoff for the Costco membership even if steak is all we bought.

Bonus is, it's a quick dinner, too. Taters take about an hour in the oven, sure, but all you do is preheat it and drop them in, you can do other stuff while they're cooking, and medium rare steaks only take about 6 minutes per side, plus 5 minutes to rest up afterwards. Once again, throw the steaks on, and during that 6 minutes, you can do whatever you want, it's a meal that is easy to cook while winding down after work, or going thru the day's mail.
 
2013-06-14 01:35:55 AM
I don't understand people who freak out over student loans...

1. They are low interest, and if you got hosed and got them when interest was high, you can consolidate when the rate drops again.

2. You have forever to pay them, and the payments are low. Sure, you have that for 30 years, but only if you pay that minimum $120/month payment.

3. They are easy as Hell to work with lenders on. I don't know how many times I've had to defer my loans or get a forbearance due to unexpected financial issues. I have never been denied, and it takes very little effort.

4. They actually improve your credit scores nicely. I have $35K I student loans, my wife has none, otherwise our credit is identical. I am usually 60-100 points ahead of her, as long as we're current.

5. If you go back to school, you don't have to pay and interest doesn't accrue while you are back in school.

I can't figure out if the people who raise the big stink are mostly Obama haters, totally ignorant about the subject, stupid, or just talking shiat to talk shiat, but if I had a choice between a standard $5K loan from a bank, and my $35K student loans, I'd take the student loans any day.
 
2013-06-14 01:50:25 AM
Tip? Ha!

Only in America.
 
2013-06-14 01:56:55 AM
If you want to get out of debt, here's a how-to guide.


ecx.images-amazon.com
 
2013-06-14 02:34:42 AM

Mikey1969: I don't understand people who freak out over student loans...

1. They are low interest, and if you got hosed and got them when interest was high, you can consolidate when the rate drops again.


Low interest on $80k for 20 years is still a lot of money.

2. You have forever to pay them, and the payments are low. Sure, you have that for 30 years, but only if you pay that minimum $120/month payment.

It's designed that way on purpose.  The bank wants you in debt for as long as possible so you'll keep paying interest.  Look at the your amortization schedule for your student loan.  Over 30 years, you'll end up paying them triple what you borrowed.

3. They are easy as Hell to work with lenders on. I don't know how many times I've had to defer my loans or get a forbearance due to unexpected financial issues. I have never been denied, and it takes very little effort.

Lenders don't mind making them because they're federally secured.  There is zero risk to the bank because if you don't pay, the government does.  As a consequence, it is impossible to have them charged off in a bankruptcy and they'll garnish your wages if you get behind.  They're as bad as the IRS.

4. They actually improve your credit scores nicely. I have $35K I student loans, my wife has none, otherwise our credit is identical. I am usually 60-100 points ahead of her, as long as we're current.

Of course it's higher.  Your credit score is not a measure of credit-worthiness.  It's a measure of how profitable you are as a customer.  You measure your financial health in terms of net worth, and I'm sure your wife's is higher than yours.

5. If you go back to school, you don't have to pay and interest doesn't accrue while you are back in school.

This is for the bank as much as it's for you.  The deeper you dig that hole, the higher your interest payments will be.  The goal is to keep you indebted to them for as long as possible in order to maximize profits.

I can't figure out if the people who raise the big stink are mostly Obama haters, totally ignorant about the subject, stupid, or just talking shiat to talk shiat, but if I had a choice between a standard $5K loan from a bank, and my $35K student loans, I'd take the student loans any day.

You'd rather be $35k in debt than $5k in debt?  And you think other people are ignorant about money?
 
2013-06-14 02:39:27 AM

mike_the_engineer: As a consequence, it is impossible to have them charged off in a bankruptcy and they'll garnish your wages if you get behind. They're as bad as the IRS.


That's because if you stop paying, they can't repossess your degree.
 
2013-06-14 02:51:46 AM

evil saltine: mike_the_engineer: As a consequence, it is impossible to have them charged off in a bankruptcy and they'll garnish your wages if you get behind. They're as bad as the IRS.

That's because if you stop paying, they can't repossess your degree.


You have no idea how far behind I've gotten, and garnishment never entered the picture. Years behind.

And interest isn't low so that you'll take forever to pay it back, its designed so that people who just got out of school aren't paying the equivalent of a house payment on top of their normal bills.

Also, I've been a customer plenty of other times regarding money, they don't work with you so well just because they're making money off of you, or it would be this easy with EVERY creditor.

And I'm sorry I didn't spell it out more clearly for you; From the perspective of how easy it us to afford my payments, make arrangements when needed, put the loan on hold if I go back to school, and because of the low interest, my student loans are far less of a burden overall than a standard loan. I was speaking hyperbolicly.
 
2013-06-14 03:02:11 AM
What I do:

Every two weeks I set aside half of the money I need to pay bills: electricity,rent, phone,car,insurance (this way at the end of the month I have money to pay for it all). Then I just "live" with the rest of the paycheck... once I hit the next paycheck I transfer the remaining money that I had from the previous one to a savings account. The way I see it I'm hitting "reset" every two weeks, that leaves me with around 1k$ for two weeks... I'm single so I end up saving around 400$ or so every two weeks.

Not bad!
 
2013-06-14 03:54:01 AM
Lusiphur:
But that's the thing - what kind of adult couple is actually only earning 25k a year? You can get more than that with two working adults both doing minimum wage. Hell, you can mow lawns and make more than that in a summer.

You're pretty confident, but I suspect you don't realize how poor people can be and how easy it is to end up that poor. Two people with minimum wage together make over $25k - but a single person, assuming they can get full time hours for 50 weeks, will end up with something like $15k. That's pretty farking hard unless you can walk/bike to your work and cut expenses quite severely. Having two people makes it marginally better but it still is very close to the edge. Additionally, though you seem to be completely unaware of this, employers try very hard to keep their minimum wage staff below the insurance cut, which is 30 hours federal and 20 hours in my state.

As for mowing lawns and making $25k a summer, if that's so easy, please tell me how I can do this. It's like summer all year here in Hawaii and $100k mowing lawns sounds great. I'll be doing this tomorrow of you fill me in on your magic "$25k a summer" lawn-mowing scheme.

Yes, somebody drawing $50k should not complain about their finances. Cutting debt is essential, and most people should probably kill all their debts. But I think you have unrealistic assumptions about what employment is like for many people. If you have skills, educations, connections, a reputation, then a decent job is nothing. But if you are critically lacking in some thing, you can end up stocking shelves part time for minimum wage. Also many people find themselves deeply in debt because they have no understanding of how finances work - they lease cars, get mortgages, use credit, because they don't realize how quickly $15 here and $30 there turns into $10k of debt.
 
2013-06-14 04:46:10 AM

mike_the_engineer: If you want to get out of debt, here's a how-to guide.


[ecx.images-amazon.com image 300x300]


Write a best selling book about money management?
 
2013-06-14 07:17:12 AM

SevenizGud: FTFA:
<i>We can drive ourselves crazy trying to cut out a lot (of small expenses), like trying to bring our lunch to work. If you're really good about it every single day, that might add up to $50 or $100 at the end of the month.</i>

Because we all live in places where we can get lunch for $2.50 to $5.00 per meal. I am sure that is especially true in New York City.

Eating out is the #1 money waster for most people. You go out to eat with your spouse almost any place that isn't Wendy's or Sonic, and you are looking at about $20-$25 minimum.

The exception is having children. You just dropped a minimum of $50,000 for the first 5 years of that little crying poop-machine. Don't have kids. Ever. And that's not just because of cost. Children suck. Why would you do that to yourself EVEN IF RICH?

Finally, a pointer to almost all who will read this. If you don't have at least $80,000 lying around when you graduate high school, then you aren't college material. The only way you would NOT have at least $80,000 lying around is if BOTH of your parents are total losers. And since you are their kid, you are therefore homozygous for loserness. People with a double dose of the lazy stupid loser gene should abandon college fantasy and not spend that money, since nobody is hiring a journalism major with a 2.6 GPA anyway. You losers would be best mowing lawns and the like.


Wow.
SOMEone is certainly an entitled douche.
 
2013-06-14 08:14:43 AM

Lusiphur: My bigger question, though, is where is everyone's money going? Until this year, I made a middle-class salary in one of the most expensive cities in the world, and for all intents and purposes lived like a king.


Have you considered asking someone? I mean, not a group of strangers on the internet, but the next time someone you know is complaining about not having any money, ask them "what's your biggest expense right now?". They'll tell you, probably.

/kids and healthcare
 
2013-06-14 08:44:07 AM

ripple123: step 1. pass regulations limiting usurious interest rates.
step 2. make the minimum wage a realistic number, that allows one to live in reasonable dignity and comfort.
step 3. make student debt dispellable in bankruptcy.


Let's say you go to college and rack up $200,000K in debt studying eastern european 18th century literature.

Which will get you out of debt with clear credit faster?

1) Paying the loans at $200/month.
2) Bankruptcy

Hint: Bankruptcy stops farking with your life in just 7 years.

What's to keep every student from declaring bankruptcy?
 
2013-06-14 08:45:45 AM

CourtroomWolf: Not even that always works.  You're still at the mercy of the economy, and the floor can drop out from under a major that seemed good.

/In 2000, computer science majors were in super high demand.
//In 2002, it was impossible to get a job unless you knew the right people or already had a shiatload of job experience.
///guess when I graduated in computer science...


I graduated in CS in 2003, and started my job a week later.  I had friends that didn't find anything "real" for 2 years.  But they're all doing just fine now.

It was also nice that I actually like coding and wasn't just trying to jump on the .com bandwagon.

Gyrfalcon: Yes, it does work. Look, some people cannot have credit cards. I am one. My financial situation is precarious enough that having credit is very risky for me: I'm much safer if I simply don't buy anything unless I actually have the money to pay for it. This is somehow fit for your mockery?


I'm mocking the fact that you are telling others not to use a particular tool because you yourself could not use it responsibly.

I will wager dollars to donuts that in other threads, you are the same type of person who routinely berates poor people for buying homes they can't afford, or having kids they're not able to support, amirite?

So people's shouldn't have a credit card to buy essentials that they need to buy anyway, but no problem with people getting a mortgage that devastates them financially?  Got it.

OTOH, when I had a motorcycle, I was able to control my riding so that I never went 140 mph, so I never had to worry about hitting a curb at 140. It was never a problem.

And yet I know someone who did just that.  Should they go around telling you to not have a bike?

If you're the type of person whose finances are not stable, then you should recognize it (as I have) and not keep credit cards around--then you don't find yourself with no job and unpayable credit card bills each month.

If you're the type of person who can't comprehend the idea that you shouldn't buy anything with a credit card that you wouldn't buy with cash, and that when used correctly it will not only make you money but allow you to more easily track your expenses, then you should (and have) recognize that you cannot be trusted with this highly useful tool.

Thus, when I found myself with a large amount of student loans, unlike many of my colleagues, I did NOT also have large credit card bills (because I don't have any) or large car payments (because I don't buy on credit) or anything being paid for on installments, because I'm used to not buying unless I have saved in advance. I do apologize if you find that unbearably unAmerican, but I guess I can live with your scorn.

What?  You didn't just save in advance for college?  You used credit to (and I'm making a generous assumption that you got a reasonable degree at a reasonable school here) purchase something that you needed so that you were in a better financial position overall?
 
2013-06-14 08:56:35 AM
just had a wreck that totaled my camaro. took the settlement money and bought a used car (its no camaro) with cash. no more car loan...and it feels nice. nicer than a camaro.

camaro.
 
2013-06-14 10:06:55 AM
whistleridge:and one of those 2-3 jobs will need to pay significantly more than minimum wage


Protip: If you are going to be working in a job paying minimum wage, perhaps you shouldn't rack up $80,000 in debt.

Just saying.
 
2013-06-14 10:10:51 AM

adamatari: a single person, assuming they can get full time hours for 50 weeks, will end up with something like $15k. That's pretty farking hard unless you can walk/bike to your work and cut expenses quite severely.


If you're single and working for minimum wage, you *must* walk/bike/BUSto work. You can't afford a car. Get used to it.

And if "work's too far away and there's no public transit" - MOVE. You don't own a house, so pack your shiat up and go to where the jobs are.
 
2013-06-14 10:46:56 AM

ripple123: step 1. pass regulations limiting usurious interest rates.
step 2. make the minimum wage a realistic number, that allows one to live in reasonable dignity and comfort.
step 3. make student debt dispellable in bankruptcy.


Step two is, perhaps counter-intuitively, the fastest way to fix the economy. You actually wouldn't need steps 1 & 3 if we did that.
 
2013-06-14 10:52:34 AM
I'm an old guy and have been through this too many times. What gets you in trouble is when life happens, and it does. You have to count on it. The experts say to save, but the plan is to work extra jobs and live like a street person to dig out - maximize saving by living cheap until you dig yourself out. People, the problem is life will keep throwing you curve balls. Say it takes you a couple years to dig yourself out, just to get back to the same lifestyle you had before - you'll probably have a couple month breather before deciding to treat yourself. Then while you're again leveraged the next life changing emergency just "happens". Before you know it, you're over 50 where the future is now.

The best advice I can give that isn't a stolen rehash that is found everywhere is - pay it forward using reverse logic. Early in your career don't take out loans, that's a no brainer, but beyond that do little things like overpay your bills. For example, if your cable bill is $60/mo., pay $75. When they send the next invoice for $45, just go ahead and pay $75 again. Pretty soon they will be sending invoices for $0, (or not sending any to make you slip up - sometime you get a phone call). Companies make a lot more when you are late on a payment than they do on the positive balance they carry forward. Now, money managers will tell you this is not good - think of all the interest you lose. That piddly few bucks interest you make over a year might pay for dinner out, and really, does the average person let 100 bucks sit in a savings account when the shopping urge hits? Paying it forward is a free insurance policy for when life rolls the wrong way.

OK, this might not make sense to you. Why give the bastards more than they are due?

Real easy - life is going to happen. Get laid off? Cushion. Medical problems? Cushion. Instead of taking on extra work when it probably isn't available or not able to do it - you can focus 100% of your income at the problem without worrying about next months bills. Major life change like moving to a new state? Cancel service and they send you a check. The main point is to set yourself up where stress doesn't go exponential when life happens. Savings accounts can be used, but you work hard to build up savings and any withdrawal adds stress. A little less positive balance on a bill won't bother you as much and allows you to focus on the real problem.

I like about 3 months ahead. I'll probably never win the lottery, but when life happens to me I don't stop going to Starbucks or work 7 days a week while living on a diet of starch. If I can't afford to pay an extra 10% on a bill, I probably can't afford it.
 
2013-06-14 11:00:59 AM

Lusiphur: doglover: Work 70 hours a week for a year or two and tell me you wanna cook dinner on a tuesday night.

I worked 70+ hours regularly over the last few years. Trying to start a business while keeping down a full-time job will do that. Out the door by 8, back by 8-9pm, then get to work on my own thing. Amazingly, I almost always maanged to cook a meal for dinner. My grocery budget for two people is about $40. It takes about 30 minutes to cook a decent meal (usually a  starch or grain, side of vegetables, and a meat). If you're spending more than about $20 per person per week, or spending more than 45 minutes cooking, you're failing at life (and probably buying crap at the grocery store). There is absolutely no reason to eat out EVER unless you actually just want to eat out (because you know, sometimes you just want sushi, and sushi-grade fish is expensive).


$20 per person, per week? If you only eat one meal a day, that's $3 per meal. You could probably put together one meal of rice, vegetables, and chicken for $3, but what about breakfast and dinner?
 
2013-06-14 11:01:40 AM

Lusiphur: I really don't understand what people are doing wrong. Until last year, my fiance an I made about $50k a year, combined, as we were working to get our business off the ground. I had a car payment, child support, and a hefty bill from going to visit my daughter every month. We still managed to take 2-3 week-long international vacations a year, ate out 3-4 times a week minimum (and ate out well), paid rent in NEW YORK, went out drinking every week at least once (and we drink a lot. We're talking 6 hours straight of mid-shelf stuff). And we don't have any credit card debt. In fact, the only debt we're carrying is from business taxes, and since the interest on that is virtually non-existent I'm not in a hurry to pay it off.

So WTF is everyone doing that they have tens of thousands in debt? WTF are you guys doing wrong that you have to subsist on cold rice and beans and sublet a closet? I really just don't understand.


We're not lying on the internet? That might be the difference.
 
2013-06-14 11:03:44 AM

fatbear: adamatari: a single person, assuming they can get full time hours for 50 weeks, will end up with something like $15k. That's pretty farking hard unless you can walk/bike to your work and cut expenses quite severely.

If you're single and working for minimum wage, you *must* walk/bike/BUSto work. You can't afford a car. Get used to it.

And if "work's too far away and there's no public transit" - MOVE. You don't own a house, so pack your shiat up and go to where the jobs are.


Lots of people do this. Then they find out that rent, utilities, food, and cost of living is much, much higher there due to the booming economy from all those jobs. Then they're late to work because the bus is late and they get fired.
 
2013-06-14 11:18:30 AM

adamatari: You're pretty confident, but I suspect you don't realize how poor people can be and how easy it is to end up that poor.


I actually do. I dropped out of college after one year. Worked a LOT of crappy minimum wage jobs until I found my calling. When I needed extra money, I worked two or three jobs at a time. This was back when minimum wage was $5.25, too. When my then-wife got pregnant, I was actually working two minimum wage jobs. So I started busting my ass at one, rose up the ranks, and picked up some skills in a related field. It wasn't difficult, and I saw plenty of people who could have done the same thing but chose to goof off instead.

But we're getting sidetracked. Only about 1/3rd of households make under $40,000, and they aren't generally the ones that you see complaining about lifestyle. I'm more wondering about that middle third - the ones making somewhere between 30k and 70k - and what's going on with them that I seem to be able to maintain a much better (maybe not the right term...more full? Richer? More extravagant?) lifestyle than them.

mccallcl: Have you considered asking someone? I mean, not a group of strangers on the internet, but the next time someone you know is complaining about not having any money, ask them "what's your biggest expense right now?". They'll tell you, probably.


I have, and I get irregular answers, or answers that don't make sense to me. Things like "Have you seen the cost of groceries???" I have, since I buy groceries. Or "Kids are expensive!" - I have a child, so I'm familiar. More often, though, I don't get any answer at all. People are very reluctant to talk money in person, especially when they feel like they aren't keeping up with everyone else. Hence asking anonymous strangers.
 
2013-06-14 11:40:13 AM

mike_the_engineer: Low interest on $80k for 20 years is still a lot of money.


But so what?  $320k for 80 years is also a lot of money---both numbers are irrelevant, because you're not supposed to take out a college loan that big.

At average in-state public rates, $80k is enough to put the entirety of a 4-year degree on credit, including room and board and books.  It's the sort of debt you'd accumulate if you only used credit to pay for school---but college loans are for covering whatever you can't pay by other means, including working, saving, parental support, and grants.  Putting the whole thing on loan is an abuse of the system.

The bank wants you in debt for as long as possible so you'll keep paying interest.  Look at the your amortization schedule for your student loan.  Over 30 years, you'll end up paying them triple what you borrowed.

All lenders want to make as much interest as possible.  So do you, as an investor.

But that doesn't somehow imply that a lender is evil for giving you leeway in paying back your loan.   Would they be less evil if they enforced a 10-year payoff with stiff penalties, no forebearance, and immediate garnishment of your paychecks?

I guess you can see a lax repayment schedule as a trap for unwary graduates to fall into eternal debt slavery.  In that respect, college is also a trap given our lax rules about curricula, attendance and participation:  you can major in general studies, skip class and miss homework assignments, and nobody's going to confront you or call your parents or stop you from ruining your future career prospects.  I suppose both systems expect you to take the initiative as an adult to do what you're supposed to do, and not abuse the leeway you're given.
 
2013-06-14 11:41:58 AM

kriegsgeist: $20 per person, per week? If you only eat one meal a day, that's $3 per meal. You could probably put together one meal of rice, vegetables, and chicken for $3, but what about breakfast and dinner?


A carton of eggs is about $2. Hot cereal is even cheaper. Getting regular home-cooked meals to a dollar or less per person per meal is not nearly as impossible as it seems. Chicken is less than a dollar per lb. if you get it on sale. You can get little packs of thin-cut steaks and cut them up into pieces, add some cheap vegetables and sauce, and have enough stir-fry to last a week for about $5-6 total.

kriegsgeist: We're not lying on the internet? That might be the difference.


I don't think I've made any claims that come anywhere near being outrageous enough to be suspicious. I made about $50k last year - not amazing, but certainly better than a lot of people. I lived in Brooklyn until about a month ago. I paid about $1400 in rent between myself and my fiance. I've taken two international vacations so far this year (4 days in bermuda because JetBlue was offering 50% off on flights) and 10 days in St. Petersburg and Moscow (plus a working vacation in Vegas in January). There were some other minor claims I've made (some obviously exaggerated slightly e.g. buying a third of a subdivision - realistically, I could only get about three houses when you factor in insurance and property taxes). What am I lying about?

This is exactly what I'm talking about - lately I've been getting the feeling that I live much differently than most people, and I'm terribly confused about what other people are doing so wrong that my claims seem so outrageous that I may as well be lying?
 
2013-06-14 11:54:05 AM
JWideman:
If you're single and working for minimum wage, you *must* walk/bike/BUS to work. You can't afford a car. Get used to it.

And if "work's too far away and there's no public transit" - MOVE. You don't own a house, so pack your shiat up and go to where the jobs are.

Lots of people do this. Then they find out that rent, utilities, food, and cost of living is much, much higher there due to the booming economy from all those jobs. Then they're late to work because the bus is late and they get fired.


1) You don't need a "booming economy" to find a zero-skill minimum wage job. You need a normal economy. If you move to Williston, ND and work for minimum wage, you're doing it wrong.

2) If you're late once and get fired, get another job. That one sucked. If you're late often enough that you get fired for cause, you've had plenty of time to learn that the bus is unreliable and you should be getting up earlier.

PS - Good employees don't get fired because they're late once. It just doesn't happen. There's more to the story.
 
2013-06-14 12:00:16 PM

Lusiphur: A carton of eggs is about $2. Hot cereal is even cheaper. Getting regular home-cooked meals to a dollar or less per person per meal is not nearly as impossible as it seems. Chicken is less than a dollar per lb. if you get it on sale. You can get little packs of thin-cut steaks and cut them up into pieces, add some cheap vegetables and sauce, and have enough stir-fry to last a week for about $5-6 total.


Making food for a week is also a huge savings of time---and debunks the notion that people are too busy to cook.  Are you so busy that you can't find one night a week to make a big-ass lasagna?

After having a kid, I've learned that soup is also great for this.  You just buy lots of different veggies at the store, and every two weeks or whenever you peel and cut it all into cubes or shreds and put them in freezer bags.  Once a week, you take the bags out of the freezer and put a bunch of handfuls into a pressure cooker with water and a little salt.  Cook, puree it with a hand blender, maybe add some water.  Then you can put servings in Tupperware containers and put those in the freezer.  Now you have soup for a week, and it handles all of your veggie needs.
 
2013-06-14 12:00:47 PM
Lusiphur:

I actually do. I dropped out of college after one year. Worked a LOT of crappy minimum wage jobs until I found my calling. When I needed extra money, I worked two or three jobs at a time. This was back when minimum wage was $5.25, too. When my then-wife got pregnant, I was actually working two minimum wage jobs. So I started busting my ass at one, rose up the ranks, and picked up some skills in a related field. It wasn't difficult, and I saw plenty of people who could have done the same thing but chose to goof off instead.
 I was going to give you applause.gif, but then I thought - why are we giving out applause for behavior that should be standard? That's what we've come to - what you did is now the exception instead of the rule. How did we get here?
/started at $3.35/hr
 
2013-06-14 12:05:25 PM

Ficoce:  ...a couple month breather before deciding to treat yourself. Then while you're again leveraged...


If you need to borrow to "treat yourself" you're doing it wrong.
 
2013-06-14 12:13:34 PM

LoneWolf343: dustman81: 
You don't need a brand new car (with the attached car payment). Get a good used car
You don't need the unlimited everything iPhone 5 plan. Get a Tracfone
You don't need the cable package with every premium channel on the planet. Get an antenna

Those three alone will save you at least $500 a month.

Get an antenna? Sure, we'll follow that advice, grandpa. I'd discuss horse-drawn carriage providers with you too, but I see those kids crossing your yard again.


We're talking about how to reduce $80K of debt. If you're not willing to sacrifice, you're not going to get out of debt.

Anyone who complains about being broke while watching $150/month cable on a $1000 TV deserves what they get.
 
2013-06-14 12:17:27 PM
doglover:
I'll just save up a week's worth of food in my one room aparment with no room for a full sized fridge in the middle of a 90% 36 degree summer and spend my one day a week off work cooking a week's worth of crappy, week old sandwiches. Brilliant plan.

Why do you need a full-size fridge if you live in a one-room apt?
 
2013-06-14 12:59:59 PM

meyerkev: Pray 4 Mojo: meyerkev: I blew a head seal

Are you sure it wasn't just ice cream?

That was Dad's car, but yes.

Car started smoking, we poured about 2 gallons of water into the radiator, got the heck out of Detroit, poured another 5 gallons of water in over the course of the drive home, and Dad got a nice $5000 repair bill after he took it up to the mechanic (or in his case, he said "Fark this noise", went up and dropped $9K on a nice used Camry pre-Cash for Clunkers)


Sorry, but your dad screwed up. Blowing a head gasket (not seal) is relatively cheap. Overheating an engine to the point of failure because you kept driving it after you blew a head gasket is not.

"But we had to get out of Detroit!"

Which would have been cheaper: Motel 6 for a night + rental car for a week, or $5000 for a new engine?
 
2013-06-14 01:26:23 PM

stappawho: Saving is like any habit.  You have to build it up and then it becomes natural.  You have to start somewhere.

Anyways, the best way to get out of $80k in debt is to not go $80k in debt.

Sometimes it really is that simple.


True, but that is like saying "the best way to get a dent out of a '86 Dodge Charger is to not get in an accident."
 
2013-06-14 01:30:01 PM

Holfax: stappawho: Saving is like any habit.  You have to build it up and then it becomes natural.  You have to start somewhere.

Anyways, the best way to get out of $80k in debt is to not go $80k in debt.

Sometimes it really is that simple.

True, but that is like saying "the best way to get a dent out of a '86 Dodge Charger is to not get in an accident."


The debt described in the article is no accident.
 
2013-06-14 01:56:01 PM

Lusiphur: kriegsgeist: $20 per person, per week? If you only eat one meal a day, that's $3 per meal. You could probably put together one meal of rice, vegetables, and chicken for $3, but what about breakfast and dinner?

A carton of eggs is about $2. Hot cereal is even cheaper. Getting regular home-cooked meals to a dollar or less per person per meal is not nearly as impossible as it seems. Chicken is less than a dollar per lb. if you get it on sale. You can get little packs of thin-cut steaks and cut them up into pieces, add some cheap vegetables and sauce, and have enough stir-fry to last a week for about $5-6 total.


Where are you getting chicken for less than a dollar a pound? The lowest I see whole fryers on sale for is a little over a dollar. Maybe 3 or 4 years ago you could occasionally get a whole chicken for less than $1/pound, but remember - the carcass is like 30% of the weight. Steaks are going to be $3 a pound at the lowest, for the cheapest, nastiest Walmart steaks you can get. I guess it's possible that in NYC food prices are lower than where I live, but I doubt it.

kriegsgeist: We're not lying on the internet? That might be the difference.

I don't think I've made any claims that come anywhere near being outrageous enough to be suspicious. I made about $50k last year - not amazing, but certainly better than a lot of people. I lived in Brooklyn until about a month ago. I paid about $1400 in rent between myself and my fiance. I've taken two international vacations so far this year (4 days in bermuda because JetBlue was offering 50% off on flights) and 10 days in St. Petersburg and Moscow (plus a working vacation in Vegas in January). There were some other minor claims I've made (some obviously exaggerated slightly e.g. buying a third of a subdivision - realistically, I could only get about three houses when you factor in insurance and property taxes). What am I lying about?

This is exactly what I'm talking about - lately I've been getting the feeling that I live much differently than most people, and I'm terribly confused about what other people are doing so wrong that my claims seem so outrageous that I may as well be lying?


The $25 k per year being enough to live comfortably in any city on earth is a start. I don't know, maybe you aren't lying, but just have trouble with not exaggerating numbers.

If you are talking about making middle-class level income and being fine, that makes sense. But the difference between $25k per year and $30k per year is about $5000 in potential disposable income (depending on your local cost of living and whether or not you are single and healthy, of course). Once you make enough to cover the necessities, lifestyle choices make a difference. Get below that line, and it doesn't really matter what you do, you are not going to make it. That's the problem these days - necessities have increased 30-40% just in the last couple of years, but wages have been the same for at least a decade (at the lower levels).
 
2013-06-14 02:03:16 PM

Mikey1969: Devo: Don't carry a balance on your credit cards.

Yeah, but that Farks up your credit score. If you have them, and have no balance, they do you no good. You don't have to max them out, but they recommend about 40% of your balance, and pay them off each month.

Part of it is to not have too many cards with too much of a limit. We have a single $500 card that is easy to pay off, yet still has enough of an limit to help when a car repair or emergency tank of gas comes up before payday...


fatbear: Lusiphur:

I actually do. I dropped out of college after one year. Worked a LOT of crappy minimum wage jobs until I found my calling. When I needed extra money, I worked two or three jobs at a time. This was back when minimum wage was $5.25, too. When my then-wife got pregnant, I was actually working two minimum wage jobs. So I started busting my ass at one, rose up the ranks, and picked up some skills in a related field. It wasn't difficult, and I saw plenty of people who could have done the same thing but chose to goof off instead.
 I was going to give you applause.gif, but then I thought - why are we giving out applause for behavior that should be standard? That's what we've come to - what you did is now the exception instead of the rule. How did we get here?
/started at $3.35/hr


Back when the minimum wage was $3.35, it was equivalent to $8.95/hour in today's money, which is 12% higher than the highest current minimum wage in the country. Also, inflation is heavily weighted towards things like cell phones and laptops since they started messing with the CPI. That $8.95 has to cover a lot more in food and gas than it did in the 80's.

So you are bragging about making more and having to spend less. What's wrong with people today? Why weren't they just born earlier?
 
2013-06-14 02:18:18 PM

addy2: These threads always devolve into posts with folks bragging about their awesome, cheap cooking skills. Like the sun coming up in the morning.


Why wouldn't they? The grocery bill is one of the few bills you have complete control over, and knowing how to feed yourself is a survival skill. Restaurant meals cost way more than cooking at home, and being able to make a nice meal for yourself is one of the cheapest ways to treat yourself. Nobody wants to live on beans, rice and chicken thighs forever. Bring on the recipes!
 
2013-06-14 03:19:06 PM

fatbear: LoneWolf343: dustman81: 
You don't need a brand new car (with the attached car payment). Get a good used car
You don't need the unlimited everything iPhone 5 plan. Get a Tracfone
You don't need the cable package with every premium channel on the planet. Get an antenna

Those three alone will save you at least $500 a month.

Get an antenna? Sure, we'll follow that advice, grandpa. I'd discuss horse-drawn carriage providers with you too, but I see those kids crossing your yard again.

We're talking about how to reduce $80K of debt. If you're not willing to sacrifice, you're not going to get out of debt.

Anyone who complains about being broke while watching $150/month cable on a $1000 TV deserves what they get.


Well, if we are going to fall back on archaic technology, at least books will make you smarter.
 
2013-06-14 03:29:39 PM
LoneWolf343:
We're talking about how to reduce $80K of debt. If you're not willing to sacrifice, you're not going to get out of debt.

Anyone who complains about being broke while watching $150/month cable on a $1000 TV deserves what they get.

Well, if we are going to fall back on archaic technology, at least books will make you smarter.


It's not about falling back, it's about doing without. TV is a luxury. The MINIMUM wage doesn't cover luxuries.
 
2013-06-14 03:41:50 PM

WordyGrrl: addy2: These threads always devolve into posts with folks bragging about their awesome, cheap cooking skills. Like the sun coming up in the morning.

Why wouldn't they? The grocery bill is one of the few bills you have complete control over, and knowing how to feed yourself is a survival skill. Restaurant meals cost way more than cooking at home, and being able to make a nice meal for yourself is one of the cheapest ways to treat yourself. Nobody wants to live on beans, rice and chicken thighs forever. Bring on the recipes!


I think this is true to an extent. You can do really great things in the kitchen with not a lot of money, as long as you are willing and able to spend the time learning how to do it. I think the problem is that on both sides people aren't realistic. You have one group claiming $20 and one hour per week is all you need to create three home-cooked, healthy meals a day, and the other side says there's no way to beat $10 restaurant meals. Neither one is true. I have a bunch of recipes I use to minimize costs, but you have to spend some money and time. For two people our grocery bill is around $100 per week, which we could probably cut down to $80 or so if we never bought anything pre-prepared or packaged. But, I spend probably 5-6 hours a week cooking, and to cut out that last $20 per week, it would have to go up to 8 or 9. That's not worth it to me, but to some people it might be. I think that in general, it is always cheaper to cook for yourself unless you make more than about $15/hour and would have actually spent that time working. The more people you have sharing, the more sense it makes economically. Sure, a single person can make a cheap lasagna and eat it for every meal for 4 days, but who would do that, realistically?

Since you asked for recipes, here's a couple that I use. First, I buy a whole chicken, and roast it:

http://www.foodnetwork.com/recipes/emeril-lagasse/perfect-roast-chic ke n-recipe/index.html

I'll cook some vegetables (green beans, broccoli, squash, or sometimes just a salad) and either rice or potatoes to go with it. If we don't end up eating it all over the next day or two, I take all the meat off the carcass and make a stock:

http://www.salon.com/2011/01/22/how_to_make_stock/

I use the stock and meat to make a casserole or chicken and dumplings, depending on how much time I feel like spending (dumplings take longer):

http://www.food.com/recipe/the-best-chicken-rice-casserole-332009

http://www.simplyrecipes.com/recipes/chicken_and_dumplings/

Chicken and dumplings makes another 4-6 meals, and chicken and rice is more like 6-8. There is always leftover stock, so I reduce it and freeze it. When I get sick of chicken, I use the leftover stock to make rice and beans:

http://www.foodnetwork.com/recipes/emeril-lagasse/red-beans-and-rice -r ecipe2/index.html

That one takes some time, so I don't make it too often. But, it will make enough for about 8 meals.
 
2013-06-14 03:42:05 PM
kriegsgeist:
Back when the minimum wage was $3.35, it was equivalent to $8.95/hour in today's money, which is 12% higher than the highest current minimum wage in the country. Also, inflation is heavily weighted towards things like cell phones and laptops since they started messing with the CPI. That $8.95 has to cover a lot more in food and gas than it did in the 80's.

So you are bragging about making more and having to spend less. What's wrong with people today? Why weren't they just born earlier?


My math says your math sucks.  I get $7.22/hr in today's money, or almost exactly today's federal minimum of $7.25. 1986 CPI, 109.6. Today's CPI, 232.5. Many states are higher.

The point is that it's a MINIMUM wage, not a wonderful wage. If your job requires no skill and you're only willing to put in 40hrs/wk, you shouldn't expect anything more than subsistence wages.

And by "heavily weighted towards cell phones and laptops" - well, again, your math sucks. Cell phones and laptops are less than 1% of the CPI. Food and gas are over 20%.
 
2013-06-14 03:44:35 PM

fatbear: Anyone who complains about being broke while watching $150/month cable on a $1000 TV deserves what they get.


I agree about the $150/month cable, but if that $1000 TV lasts 10 years, it's costing you about $8 a month.
 
2013-06-14 03:59:20 PM

Xcott: fatbear: Anyone who complains about being broke while watching $150/month cable on a $1000 TV deserves what they get.

I agree about the $150/month cable, but if that $1000 TV lasts 10 years, it's costing you about $8 a month.


$8.33, actually, at zero percent interest. Where do you get a zero percent interest loan on a TV?

If you're broke (and that's who we're talking about here) you're putting it on a credit card.At 18% over 10 years, that's $18.02/month.

And quite frankly, people who spend $1000 on a TV aren't likely to keep them for 10 years - they're the types who will be trading up every 3-4 years. 4 years, 18% - now it's almost $30 a month. Affordable? Possibly.

Or - buy a $100 TV off craigslist and save over $3000 over the next 10 years.
 
2013-06-14 04:04:09 PM
Pray 4 Mojo:
I was filling out a credit app to buy a farking $1500 TV and the guy slid it back to me and said, "Oh... you're supposed to put weekly income.. not monthly." I just handed it back. It was a pretty funny look I got.

Why are you borrowing money to buy a TV when your income is 4x higher than most people expect? The best way to repair your credit is not to take out a bazillion lines of credit - it's "don't fark up" for 7 years.
 
2013-06-14 04:46:44 PM

Lusiphur: Hence asking anonymous strangers.


Participation in pop culture is expensive. You strike me as more of an individualist. You probably don't watch a lot of commercial TV, you do things your own way and you ignore stupid trends.

Workout fads, diet fads, luxury denim, health crazes and the like are expensive to keep up with. There's also paying for pop culture, like movies and cable TV. Attending events that are geared towards kids are a great way to spend money. Coconut water instead of just water. Delivery food. $6 boxes of cereal. $130 running shoes. $200 fashion watches. $300 headphones.

The lifestyle I described above is not luxurious, it's typical middle-class behavior to spend $30/person on a meal in a restaurant located inside a shopping mall. No shiat. That's a weekly thing for some people. I know a couple, who make $150K combined who spend $56K on food. They eat out for every meal, and their two kids do too. People can't tell you why probably because it's so ingrained in them to drop $30 every time they get in their car that they don't even notice it. $200/wk on gum, coffee, clif bars, magazines. That's $10K after taxes! On stuff you wouldn't even remember you even bought. Sad.
 
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