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[Skiptastic]

True, but that won't help much with stagnant wages and ridiculous tuition rates (now and in the future).

No, there is a lot to be done on those things and on regulating companies that take advantage of workers. But in the absence of any structural change in how this country views the role of big business, we need to teach the next generation how to avoid being enslaved by student debt and consumerism.

 

[Abstrusity]

There are myriad steps the government could take to protect consumers--and in many cases, to protect consumers from themselves. But we don't. Because, y'know, individual responsibility! No matter what behavioral economists might have to tell us.

That's it. We need to protect people form themselves. Because most don't actually know what they want, long term. They act and exist in the short term, and it's why we can use game theory and psychology in economics in general at all. In the past, there were regulations, but they've been chipped at little by little. They've found loopholes, they've expanded contracts to provide a disincentive to read them through. They prey on the financially illiterate, not just when you go to them -- no, they'll come to you.

 

[l2ounD]

the passage where the writer essentially hand waves the extortionist practices of the university system is especially infuriating..

What got me was the writer clearing a 401k account for a wedding...

 

[Generate]

The main problem is cities have become far too expensive to live in. Real estate markets are just ridiculous.

 

[chicko1983]

Aussie here, I currently have a couple months savings if I lost my job which could cover living and mortgage expenses.

Id feel a little nervous if I had less than that in the bank if required, given the job climate at the moment.

 

[Darren870]

Aussie here, I currently have a couple months savings if I lost my job which could cover living and mortgage expenses.

Id feel a little nervous if I had less than that in the bank if required, given the job climate at the moment.

I think Australians are way better at saving then Americans. I mean yea the wage here is high but I think people are smarter with there money.

I mean, just look at CC limits. In the US its a good thing if you have a higher CC limit. Here, its a bad thing. Banks view it as a way you can pile on more debt. Totally opposite way of thinking.

Im in the same boat as you, I could probably actually survive for a few years. I was never like that in the US though, almost always paycheck to paycheck.

 

[Zaptruder]

Can't imagine how stressful my life would be if I didn't have a thick cushion of cash (relative to my lifestyle, which is basic).

It's giving me the options to experiment and undertake things that have meaning and value to me as I please.

Of course, America is structured in a shitty way, but if you're middle class, meaning you're not in the poverty class, it generally should mean that you have enough financial freedom to structure your lifestyle in a way where you have some degree of choice right?

Unless of course you're buying into all the trappings of modern consumerism - larger than necessary living space, car, keeping up with the jones, etc.

In which case, the American problem seems a lot like a cultural mindset problem of hyper-consumerism more than a huge unavoidable economic problem.

To the credit of the millenials - they're taking this in their stride and downscaling and reconceptualizing what they view as necessary, as well as the value systems that go into that thinking.

On the flip side, it sure doesn't help that pretty much everyone's wages have stagnated for decades, and you're only making more if you have a share in capital investments - and that the share of income costs on large capital costs (property and houses in particular) are much higher than before.

Which is why I've chosen to eschew viewing owning property as a necessity.

 

[rickyson1]

never really understood this personally

growing up we moved a bunch even though my parents made decent money because they were horrible at managing it

it's like....just keep a running record of everything you spend money on it's not that hard

 

[Dennis]

If you have trouble finding $400 to pay for an emergency you are not Middle Class.

You are Lower Class.

 

[Joni]

It is a mentality change that needs to happen, it is not something that can be handled with regulations. It is people trying to live above their income. You can raise the minimum income, get more regulations on banks, ... but if people want to spend more than they have, then it won't work.

 

[Greddleok]

I have £5000 tucked away in case of emergency or if I need a lump sum for something important. I certainly don't earn a lot, but I'm a natural saver.

 

[YN12]

That was a good read. I like this bit especially:

Many middle-class wage earners are victims of the economy, and, perhaps, of that great, glowing, irresistible American promise that has been drummed into our heads since birth: Just work hard and you can have it all.

As somebody who doesen't live in US and doesen't know many american people, it makes me wonder about that society...my experience growing up in Europe was not like that...there were always things I couldnt afford (cars, holidays, university, etc.) so to me the idea that you could 'have it all' is so removed from reality...

 

[demon]

It is a mentality change that needs to happen, it is not something that can be handled with regulations. It is people trying to live above their income. You can raise the minimum income, get more regulations on banks, ... but if people want to spend more than they have, then it won't work.

If you think that decades of stagnant wages, gargantuan amounts of money being sucked up by the elite, a healthcare system that regularly bankrupts people, and $1.2 trillion in student loan debt have nothing to do with because it's all due to an "attitude" change that happened since 1980, you're deluding yourself.

 

[Agent Cooper]

As sad as it sounds, high schoolers really need to have a class set aside to learn budgeting, investing for the future, and simple daily financial management (balancing a checkbook, how to pay down debt smartly, etc.) Living within your means should be a major building block of our school system.

I can definitely cover $400 but I've been blessed in my life. If I hadn't learned some hard lessons about discretionary spending I might be much worse off.

At my high school (public high school) there was a finacial kind of class you could take. It was an elective and I think I got college credit for it.

It was billed as this type of class where they'd teach you all you need to know about money and saving and bills and ect.

But I learned almost nothing. We spent three class periods watching a documentary-type film about how credit cards are the devil and you shouldn't get them because you'll go into a never ending spiral of debt and die probably.

I'm exaggerating, but it made us all terrified to deal with our own finances and apply for credit cards... I don't remember learning anything good from that class.

 

[Joni]

If you think that decades of stagnant wages, gargantuan amounts of money being sucked up by the elite, a healthcare system that regularly bankrupts people, and $1.2 trillion in student loan debt have nothing to do with because it's all due to an "attitude" change that happened since 1980, you're deluding yourself.

It won't stop upper-class and middle-class spending more than they have. It is why this trend is not that unique to the US, unlike the healthcare system that bankrupts people and the student debt. It reminds of those ridiculous ads where people making $150.000 showing how they are hardly making ends meet.

 

[ClosingADoor]

I get there is a lot wrong with stuff like healthcare costs and student debt. But if you are middle class and you don't have 400 somewhere you need to take a serious look at your expenses and see where that money is going.

Or you just aren't really middle class at all and just fooling yourself.

What income is middle class in the US?

 

[antonz]

Wage Stagnation is a huge issue. Yes people spend beyond their means but a lot of that stuff is things that really should not be considered luxuries. They are considered luxuries because of the fact wage stagnation etc. has led to those items becoming luxuries.

I mean even baseline employment at the minimum wage level consider the last increase was in 2009. Just consider how much the price of groceries alone have gone up in the last 7 years. That doesn't include increases in bills, gas, medicines etc.

At this point people who are poor or borderline middle class practically have to live past their means to survive.

 

[Dancing Queen]

That's what happens when people don't have formal financial education.

Books like "Poor Dad Rich Dad", "Secrets of the Millionaire Mind" and "The Millionaire Next Door: The Surprising Secrets of America's Wealthy" should be read by every adult citizen.

Wage Stagnation is a huge issue.

People with different wages end up the same way, living month by month. We once had a dude in NeoGAF saying he was making 150.000 a year or something similar (with his wife) and asked for advice to reduce his expenses, saying he already tried "everything", lol.

 

[Crv756]

ah I missed that was credit card debt.
I don't have any of that.

that being said I still have like 90k in student debt between my wife and myself. and that is after paying off one of the loans earlier this year.

worst part is I don't even make use of my degree, if i could get rid of my degree to clear my student debt I would do it in a second, but alas I can't and just will have to work on it over the next 5 years or so to ideally pay it off. (though it could easily take 10 more years.)

Man I thought my 35k in student loans was bad

Not that it would be much consolation but I'm quite sure it's statistically more likely that a college graduate does not use their degree directly for its intended disciple than for it,

I don't use my degree at my current job either but the degree itself is sadly the requirement at a lot of places

What, the, actual, fuck? Is this a common standard in the US? What degrees do you guys have? There is something fucked up in the system if this is the case. The education ministry than really needs to take their fingers out their asses to do something, this should not be the norm. It does not only hurt students, but also the country in the long run where no one will have a degree dude to "No one uses it and it only gathers debt".

 

[Salamando]

I get there is a lot wrong with stuff like healthcare costs and student debt. But if you are middle class and you don't have 400 somewhere you need to take a serious look at your expenses and see where that money is going.

Or you just aren't really middle class at all and just fooling yourself.

What income is middle class in the US?

There isn't a clear definition, but the median household income is around 50k. From that, ~40k-125k is healthily middle class (adjust for cost of living where necessary). Around those bounds, you enter the nebulous regions of upper-lower class and lower-upper class.

Article itself mentions a "study by Lusardi, Tufano, and Schneider found that nearly one-quarter of households making $100,000 to $150,000 a year claim not to be able to raise $2,000 in a month". That's just bewildering to me...there's people making twice what I do who don't even have 30% of their net monthly income stashed somewhere.

 

[RoadHazard]

If you actually have a decent middle-class income there's no excuse for being in that situation (of not being able to cover an unexpected $400 expense). You've put yourself there, you have only yourself to blame. I have little sympathy for people who could have had a large buffer but have decided to SPEND SPEND SPEND instead.

EDIT: I guess if you get hit with some huge medical bills or something it's not quite as much your fault. It's more USA's fault for not having decent public healthcare. But that's how it is, so I guess you need insurance. And that's really the only "justified" scenario I can come up with. If you've put yourself in massive credit card debt by simply spending more than you have on stuff you don't really need you have only yourself to blame.

 

[Aztechnology]

I get there is a lot wrong with stuff like healthcare costs and student debt. But if you are middle class and you don't have 400 somewhere you need to take a serious look at your expenses and see where that money is going.

Or you just aren't really middle class at all and just fooling yourself.

What income is middle class in the US?

From a pew research poll done in 2013. It depends on location. But generally quite a broad range that really doesn't really create a clear definition.

 

[spekkeh]

I can't recall the last time I balanced a check book. I doubt I'm alone. This lack of financial intimacy has lead many to take their eyes off their fiscal health.

Isn't that also sort of the problem? We're being taught to 'balance' and so that's what most people do, but you should be running a surplus every month.

 

[Chairmanchuck]

About 38 percent of households carried some debt, according to the analysis, and among those, the average was more than $15,000.

I think thats an american problem, because even when visiting GAF you see people getting credits for 30-40k $ cars in their early 20s, not even knowing how stable their job might be.

Right now I could also easily get a credit for a Porsche or BMW X5 if I want. The thing is I am looking for a job right now, might have the money for that car, but dont see why I should get a credit for a car, when I dont even know whats in 2 years.

 

[YN12]

I think thats an american problem, because even when visiting GAF you see people getting credits for 30-40k $ cars in their early 20s, not even knowing how stable their job might be.

Right now I could also easily get a credit for a Porsche or BMW X5 if I want. The thing is I am looking for a job right now, might have the money for that car, but dont see why I should get a credit for a car, when I dont even know whats in 2 years.

Not to mention games, PC stuff, multiple game consoles (PS4+XBO), etc. People on GAF seems to have it all.

 

[Chairmanchuck]

Not to mention games, PC stuff, multiple game consoles (PS4+XBO), etc. People on GAF seems to have it all.

If you can afford these things without a credit, there is no problem.
But just by being on the internet and message boards for a few years now, it seems especially americans like to get a credit for everything. Thats whats strange and wasnt that also part of the reason for the 2008 financial crisis?

It is just something that I do not understand as a German. If you cant afford the 30k $ car now, why buy it with a credit, when you cant be 100% sure that you cant pay it back (risk of losing job, not have savings etc.).

 

[Aztechnology]

I think thats an american problem, because even when visiting GAF you see people getting credits for 30-40k $ cars in their early 20s, not even knowing how stable their job might be.

Right now I could also easily get a credit for a Porsche or BMW X5 if I want. The thing is I am looking for a job right now, might have the money for that car, but dont see why I should get a credit for a car, when I dont even know whats in 2 years.

Yea I'm sure it's all fancy cars and other extravagang things beyond our means... like college educations.

 

[Neifirst]

I think the OP left out some of the critical information from this article:

1) The author's chosen career is a freelance writer leaving in New York with no predictable income;

2) Purchased a home in the Hamptons;

3) Had his wife quit her job, giving up a steady income source;

4) Paid his children's college tuition;

5) Surrendered his 401(k) with penalties to pay for a wedding!


Income stagnation is a serious issue, but it shouldn't be co-mingled with the author's sheer stupidity. No government entity or school is going to care as much about your personal finances as you. 'Capitalism' isn't forcing anyone to make choices like these; your income should determine your lifestyle choices, not some amorphous American Dream.

 

[YN12]

If you can afford these things without a credit, there is no problem.

But just by being on the internet and message boards for a few years now, it seems especially americans like to get a credit for everything. Thats whats strange and wasnt that also part of the reason for the 2008 financial crisis?

Technically I could afford them, as I have a substantial amount set aside in ISA savings. I want a new PC and a PS4...but if I did that I would not have so much savings anymore! And I feel much more confortable with having a crappy laptop that worry about the future...

 

[Chairmanchuck]

Yea I'm sure it's all fancy cars and other extravagang things beyond our means... like college educations.

Right. Thats also a point I actually forgot. I dont know why the education in America is so expensive.
But actually I am serious about the cars. When I check GAF, you still see people buying fancy cars they cant afford (it seems). My impression is that America seems like a country where a lot of people are using credits to buy things.

And the 2008 financial crisis "proved" it, when people who couldnt afford a house got a credit for a house.

 

[Comalv]

Honestly I do see the problem.

I live in Italy and started working seriously last July. I earn a very respectable salary for a first employment job in this country and I don't have huge fixed costs, only rent and el/gas/water (no car, no debts/loans, no commute expenses).

I still spend almost everything I earn every month. I do it in a reasonable manner (I think), I have an excel sheet with all sort of information on what I am earning and spending and how, monthly balances, monthly forecasts on what I can spend next month for "non-fixed" expenses, a "whishlist" with expected costs, what month I will be able to buy those things and projected account balance after I buy those things.

Still, maybe because I just started earning money of my own, I'd rather spend now in things I need/want, than save up and spend with less..."passion". Account interests in Italy are shit (for the kind of money I have), retirement funds are even worse and with the likelihood of getting a serious illness (cancer above everything else) I don't like the idea of saving up money that I might even not be able to use at a later date.

That said, when my "wishlist" is empty I try to save money for ludicrous emergencies (such as a last-minute trip with friends or a new computer), and after those will be covered as well, I will also start to save up for serious things, I guess.

 

[BladeoftheImmortal]

I think the OP left out some of the critical information from this article:

1) The author's chosen career is a freelance writer leaving in New York with no predictable income;

2) Purchased a home in the Hamptons;

3) Had his wife quit her job, giving up a steady income source;

4) Paid his children's college tuition;

5) Surrendered his 401(k) with penalties to pay for a wedding!


Income stagnation is a serious issue, but it shouldn't be co-mingled with the author's sheer stupidity. No government entity or school is going to care as much about your personal finances as you. 'Capitalism' isn't forcing anyone to make choices like these; your income should determine your lifestyle choices, not some amorphous American Dream.

If most americans were living within their means, the economy would have gone bellyup by now.

 

[Unknown Soldier]

What, the, actual, fuck? Is this a common standard in the US? What degrees do you guys have? There is something fucked up in the system if this is the case. The education ministry than really needs to take their fingers out their asses to do something, this should not be the norm. It does not only hurt students, but also the country in the long run where no one will have a degree dude to "No one uses it and it only gathers debt".

The US doesn't have an education ministry.

In the US, higher education is a for-profit enterprise which is mainly about scoring as much tuition as possible from students. The idea of awarding a degree that is useful to a person's future career and earnings is anathema to that goal. In general, if you have $40,000 a year in cash or loans, you can get a degree. It might be in Art History but the university doesn't care, they just want the $160,000.

 

[Future]

It's the price of family really

My first job I got paid like 10 bucks an hour and had like 6 roommates in a large home. I made due just fine and just had to deal with life like that. I could choose when I could afford to go out versus just stay at home and I could cover something like $400. My income was enough that I wasn't completely broke, but I wasn't getting fancy dinners or anything like that. I could even skip a meal or two if need be

Now though.... Married, kid, house, family. I can still afford $400 thankfully, but honestly one stroke of bad luck.. Health, loss of income, and I'm fucked. Because now living with 6 roommates is no longer an option cuz I have babies and shit. And they gotta eat with no option really. Don't know what I'd do and I feel bad about anyone that's thrust in that situation. Feel like I'm on the verge of disaster at any moment since I don't have a true safety net anymore

 

[BladeoftheImmortal]

Right. Thats also a point I actually forgot. I dont know why the education in America is so expensive.
But actually I am serious about the cars. When I check GAF, you still see people buying fancy cars they cant afford (it seems). My impression is that America seems like a country where a lot of people are using credits to buy things.

And the 2008 financial crisis "proved" it, when people who couldnt afford a house got a credit for a house.

Don't forget exorbitant medical bills, also. Right now the biggest three things most people are paying for is:

A) Student Debt
B) Mortgage
C) Medical Bills

Plop a car loan on top of that (and you need a car in the US, sadly) and baby. you got yourself indebted for life.

 

[YN12]

I think the OP left out some of the critical information from this article:

1) The author's chosen career is a freelance writer leaving in New York with no predictable income;

2) Purchased a home in the Hamptons;

3) Had his wife quit her job, giving up a steady income source;

4) Paid his children's college tuition;

5) Surrendered his 401(k) with penalties to pay for a wedding!


Income stagnation is a serious issue, but it shouldn't be co-mingled with the author's sheer stupidity. No government entity or school is going to care as much about your personal finances as you. 'Capitalism' isn't forcing anyone to make choices like these; your income should determine your lifestyle choices, not some amorphous American Dream.

Yes, this is what I got from reading the article as well. He just 'wanted it all', regardless of the reality of his situation. Who the hell gives up his pension to pay for his daughter's wedding? The little shit can pay for her wedding, or they can just sign the bloody papers and call it a day!

 

[Neifirst]

If most americans were living within their means, the economy would have gone bellyup by now.

Listen, I'm don't consider myself an expert on macroeconomics (even with a finance degree), but I'd encourage you and others to at least read this with an open mind:

http://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/

There are very few things more empowering than being in control of one's consumption, and in turn, overall finances. It can be done, even at income levels below the local median, but it requires discipline.

 

[Chairmanchuck]

Don't forget exorbitant medical bills, also. Right now the biggest three things most people are paying for is:

A) Student Debt
B) Mortgage
C) Medical Bills

Plop a car loan on top of that (and you need a car in the US, sadly) and baby. you got yourself indebted for life.

Of course I also need a car. Thats not a question. But if you are in your early 20s, I dont know many Germans who buy a 30-40k $ car here in Germany. They usually drive around a second-hand 5-10k $ car. Mind you, that BMW/Mercedes/VW are quite cheap here. I am driving around a cheap 12 year old BMW M5 I got for 5000€.

Btw. when do Americans usually get a Mortgage? Here its usually if you are 35-40 year old. Before that its not impossible to get one, but the average age is 35-40.

 

[G.ZZZ]

Reading things like this make me understand how much i'm actually privileged. I have a shitty income (500 to 1500 a month, depending if i can find work or not, most usually not), but i have tons of money (relative to my lifestyle) saved up because i have a house that my parents got me, no car because i use lot of public transportation and bike everywhere, no medical debt because healthcare is free, university is free etc... So yeah, in all those years where americans got huge debts (college), i got money saved up. Make me think, how can you even say that the US are the richest country on earth if structurally most of the population has huge debts from education and healthcare fees? Seems an illusionary wealth.

And america want to free market us (europe) and export their economical model all around the world, preaching the marvels of uncontrolled capitalism. Yeah no thanks. Corporate servitude is all i can see in those things. Can't wait for my robot overlords.

 

[mrklaw]

When I earned a quarter of what I earn now, I felt better off. I suppose a mortgage, wife, kids, car payments etc will do that to you.

 

[BladeoftheImmortal]

Listen, I'm don't consider myself an expert on macroeconomics (even with a finance degree), but I'd encourage you and others to at least read this with an open mind:

http://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/

There are very few things more empowering than being in control of one's consumption, and in turn, overall finances. It can be done, even at income levels below the local median, but it requires discipline.

Oh, I'm frugal as hell. But If everyone were as frugal as me, nothing would get bought.

 

[bodyboarder]

I think the OP left out some of the critical information from this article:

1) The author's chosen career is a freelance writer leaving in New York with no predictable income;

2) Purchased a home in the Hamptons;

3) Had his wife quit her job, giving up a steady income source;

4) Paid his children's college tuition;

5) Surrendered his 401(k) with penalties to pay for a wedding!


Income stagnation is a serious issue, but it shouldn't be co-mingled with the author's sheer stupidity. No government entity or school is going to care as much about your personal finances as you. 'Capitalism' isn't forcing anyone to make choices like these; your income should determine your lifestyle choices, not some amorphous American Dream.

6) Blaming the publisher for wanting the advance back when he missed a writing deadline

 

[Magni]

I'm really lucky in that I got a great job right out of school, and that I went to school abroad (or rather, that I stayed abroad for college rather than going back to the US immediately after high school). Which means my student debt after graduating was a relatively low 18k€ (which today would be about $20k). I'm paying it off in three years (currently half way through), which I know is a very fortunate position to be in, relative to some in the US.

Looking at Mint, roughly 7.5% of what I've earned in these past two years since finishing school is in cash, spread across checking and savings (and taking into account current credit card balances, always paid in full), 14% is in non-retirement investments, and 12.5% in retirement savings/investments. So in all I've saved (as in, not burned) just over a third of my income. I'd love to get that closer to 50%, but I just had an expensive move (had to rebuy everything), and I'm getting married next month. Still, we're doing our best to keep the wedding costs down (our target is 10k€, in euros since we're doing it in France where my family's from), and there's no way I was going to pay three months salary for a ring last year (ended up costing a little under $800, which is more than enough for a 24 year old; I'll get her a more expensive one for our thirtieth anniversary or something).

No cable. Lots of cooking at home and cheap but healthy/tasty restaurants. Not too many bar or club splurges. No new phone every year (and T-Mo while I lived in the US, I paid a quarter of what some of my friends on Verizon paid). It's not easy, but it's doable, if you earn a livable wage (which you do if you're middle class).

One point of advice: whenever you see an ad for SAVINGS!!!, don't blindly buy. Buying isn't saving money, not buying is saving money. My wife and I have a list of things we want to buy eventually, and we'll keep an eye out for any promotional deals on those, but anything that's not on the list will not get bought. If we don't need it, the best way to save money is to not buy it.

I'm really thankful that my mom was at one point a professional financial planner and really drilled the importance of saving and financial independence into me from a young age.

The next couple of years are going to be a tricky balance between wanting to save before we have kids and wanting to splurge (travel) before we have kids.

Isn't that also sort of the problem? We're being taught to 'balance' and so that's what most people do, but you should be running a surplus every month.

Saving is included as part of the budget.

 

[Salamando]

Right. Thats also a point I actually forgot. I dont know why the education in America is so expensive.
But actually I am serious about the cars. When I check GAF, you still see people buying fancy cars they cant afford (it seems). My impression is that America seems like a country where a lot of people are using credits to buy things.

And the 2008 financial crisis "proved" it, when people who couldnt afford a house got a credit for a house.

The short version - it's drilled into our heads that we need a degree. Blue collar work is lower class. That drives up demand. Then the government made student debt non-dischargable through bankruptcy. Allows banks to give loans to students who would otherwise be "high risk." But if you give kids more money, the schools are all to ready to take more of it. And it's likely your schools get better funding from the government. A disturbing number of states increase the prison budget more than they increase higher education's funds.

 

[Frozenprince]

With how little of financial literacy we teach in general education growing up, I'm honestly shocked the percentages aren't higher.

 

[Chairmanchuck]

The short version - it's drilled into our heads that we need a degree. Blue collar work is lower class. That drives up demand. Then the government made student debt non-dischargable through bankruptcy. Allows banks to give loans to students who would otherwise be "high risk." But if you give kids more money, the schools are all to ready to take more of it. And it's likely your schools get better funding from the government. A disturbing number of states increase the prison budget more than they increase higher education's funds.

Honestly that sounds like a scam to me...

 

[RoadHazard]

I work in customer services for a service provider. We bill weekly and it's staggering how many people can't budget for that. "I get paid fortnightly so I'm not sure." The fuck kind of excuse is this? Spend half the money one week and the rest the next.

Here in Sweden everyone gets paid monthly. Guess the people you're talking about would just be fucked here. "Budget for a whole month, who could possibly do that?!" Which I guess is why some people find themselves with an empty account with two weeks left to the next paycheck.

(I don't actually keep a budget. Not because I make ridiculous amounts of money, I just have a good sense of how much I need to make it through the month. The rest, after paying my bills, I put into savings. This comes naturally to me, so I find it strange how some people can be so utterly oblivious to how much they're spending or can spend.)

 

[marimorimo]

What got me was the writer clearing a 401k account for a wedding...

Dang, that got me too. I don't live in the US but I've known since I was in middle school that weddings are expensive, and I vowed to myself I wouldn't make my parents struggle to pay for MY wedding.

Thankfully, I was able to keep that promise and we were able to pay for our wedding without any of our parents having to spend a dime. We paid everything in cash and didn't have to scrimp and scrape either. The secret (which isn't a secret at all)? Savings being the first item in our budget every month. We saved 20% minimum, although in my heyday it could go up to 40-50%. We were lucky to have had well-paying jobs that made this easier, but in the past I have been so poor that eating 3 square meals was a struggle, and I still managed to save 30-40% monthly.

We're a single-income household now after an international move and our income level is much lower than before so I have had to dip into my savings occasionally. But even then, $400 would not wipe us out (although it does unnerve me to think that there could come a time that would happen).

P.S. Another big thing is that we rent (no mortgage) and we don't have to pay student loans which makes things 1000% easier. From all the stories on GAF student loans are like the work of the devil.

 

[demon]

Listen, I'm don't consider myself an expert on macroeconomics (even with a finance degree), but I'd encourage you and others to at least read this with an open mind:

http://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/

There are very few things more empowering than being in control of one's consumption, and in turn, overall finances. It can be done, even at income levels below the local median, but it requires discipline.

That is missing his point point entirely, same as I was getting at in my first post.

 

[Spuck-uk]

Is it typical that in America most people have credit cards and non-mortgage/student loan debt?

Most of my peers in the UK don't even own a credit card, or paid it off after university
*

*granted, our cost of going to university is tiny compared to yours.