Why is saving money so hard?

[RossMAN]

Hey RossMAN, thanks for the re-welcoming. I forgot how entertaining this board could be.

Unfortunately the glory days are long gone. What happened?

1) Banned.
2) Grew up, got married, had kids, stepped outside and ventured into real life.
3) Facebook, Reddit, other forums, etc.
4) still locked up in olds basement.

Oh yeah and you may want to read this and offer your two cents.

 

[bradley]

Because your parents never taught you discipline and instead treated you like their special little guy.

 

[Safeway]

Alky.

That guy casually posted what look like doctored college admission paperwork in order to prove that he is (or was) a pharmacist?

I called him out on this bullshit over two years ago. I went through his post history and found posts in which he claimed to currently be in pharmacy school, claimed to be a pharmacist, claimed to be a pharmacy technician, etc. And these posts were not made in the logical chronological order. He was a pharmacist, but then he was merely a technician, but then he was actually a pharmacy student. Pretty much everything he said conflicted with something he said in the past, even within the very same thread.

Poor guy stopped paying his mortgage for four years and was mad that he owed someone some money.

Riiipppp.

 

[KlokWyze]

To me it's about being comfortable working a 9 to 5 and NOT spending money on anything to distract from the doldrums of it.

We just had a kid and honestly we spend less money now because we don't go out as much.

It really just comes down to income vs expenses. If I made six figures I wouldn't change much about my lifestyle. Maybe a nice car, but it doesn't take much to me happy in terms of expensive gear. For me it's really about time.

Also, everything in society is geared towards making you an irresponsible spender. You have to have a will of your own. It really is just like controlling your own diet as someone mentioned. Most people are just susceptible to acting and doing as others do without a will of their own.

Responsibilities and hard times give you that willful independence and an understanding of how to, well... live.

 

[JSt0rm]

I make 6 figures. I live off of $1000 a week. The rest get put away for big purchases with a baseline savings I wont go under (6 months of bills) and investing.

I would say if you arent happy with $1000 a week play money then you wont be happy with 1 million a week.

 

[HamburgerBoy]

I make 6 figures. I live off of $1000 a week. The rest get put away for big purchases with a baseline savings I wont go under (6 months of bills) and investing.

I would say if you arent happy with $1000 a week play money then you wont be happy with 1 million a week.

Do you think this post makes you look frugal or something? I have no idea what kind of point you're trying to make when (depending on the specifics of the 6 figures) you may be spending half of your income, after taxes, on "play money".

 

[JSt0rm]

Do you think this post makes you look frugal or something? I have no idea what kind of point you're trying to make when (depending on the specifics of the 6 figures) you may be spending half of your income, after taxes, on "play money".

I didnt say anything about being frugal. If I die tomorrow I will be happy. If I live to be 100 I will be happy. Im looking for balance not frugal hoard money till I die.

 

[JSt0rm]

All of my bills come from the 1k a week as well.

 

[brianmanahan]

Hey RossMAN, thanks for the re-welcoming. I forgot how entertaining this board could be.

If you like entertainment, you should try starting a tipping thread!

 

[Safeway]

If you like entertainment, you should try starting a tipping thread!

I posted in the one that Ns1 recently started. Not enough controversy and Ns1 is a poor debater.

 

[Genx87]

Saving money requires patience and limitations. Something a lot of people cant handle.

 

[RossMAN]

If you like entertainment, you should try starting a tipping thread!

but Nik is also banned, now what?

 

[rh71]

What if you had to move to get a better paying job? What if you bought in 2007 and lost a ton of money? What if you need to travel a lot?

There are many, many hard to quanitfy reasons not to buy a house. Unless you are ready to settle down and build a family it's not worth it for most people.

Not being settled down is one of the reasons I've already stated as a good reason to rent. I'm talking about those who have families and jobs.

If you "suddenly lose a job" would not be the same thing or a good reason to just rent for X years.

30's, renting, no plans to buy in this market.

Why can't you folks just accept "it depends". There are people in this very thread that admitted buying a house was a fucking mistake and they lost shitloads of money on it. I know people who lost fuckloads of money on houses. I also know people who made a killing.

No, buying at the height of the market was the mistake, and maybe they had to buy right then and had no control over that decision so there's no blame there. It was high for years. I don't see many people saying buying a house was a mistake at all. I don't see buying a house as an investment either - it's a risk if you choose to look at housing as an investment, but all less of an issue than KNOWING you will be losing money with renting.

You can say the same thing about risks and outcomes all day but as I see it, you haven't mentioned needing a house (family) or having the means to buy one yet (since you've been renting for a while) so I'll just chalk it up to being defensive about your choice.

I'd only recommend people not go down that path (especially leaving home at 18 to rent) if they don't have to. The same path that leasing a car takes you... perpetual payments with little opportunity to save for owning the real thing.

ns1 lives in LA.

Rent money X years there = ouch

 

[JSt0rm]

LA is ouch in a lot of ways. But opportunities abound here. Come retirement if you are willing to leave the city (and own) you will be way ahead of people who just lived in the rural or small city their whole lives. But its hard to buy here. Lots of competition for housing and the prices are wtfomgbbq. Especially if you arent used to big city living.

Also if rent is less then the interest payments on whatever home you get then it can be OK. When I rented here I made sure to have a roommate always. Even when I could afford my apartment on my own I didnt WANT to pay that much.

 

[Ns1]

No, buying at the height of the market was the mistake, and maybe they had to buy right then and had no control over that decision so there's no blame there.
---
Rent money X years there = ouch

1) So what you're saying is...buying a house is not always a wise decision

2) You think rent is bad here? Check out the housing prices. You're basically arguing my point #1 with that quoted comment - buying a house at the peak of the market is fucking stupid, and the LA housing market is fucking stupid high right now.

 

[ponyo]

1) So what you're saying is...buying a house is not always a wise decision

2) You think rent is bad here? Check out the housing prices. You're basically arguing my point #1 with that quoted comment - buying a house at the peak of the market is fucking stupid, and the LA housing market is fucking stupid high right now.

So when was the LA housing market not stupid?

 

[Ns1]

So when was the LA housing market not stupid?

3-5 years ago?

 

[Belegost]

3-5 years ago?

No, that was the market at the bottom of the largest economic collapse in 75 years.

That was also the real problem for the one person who lost on selling their house - selling at the bottom of a massive economic downturn is far from ideal.

The comparison for buying/renting:

Buying - Exchange an amount of money monthly to have housing, a portion of which is paid against a loan on an investment vehicle. Buying ensures a level of housing security, provided the mortgage and taxes are paid there are few things that can force an owner out of their home - the exchange is taking on the risk of the investment, a risk that declines as the loan principle decreases, and paying for maintenance.

Renting - Exchange an amount of money monthly to have housing, a small portion of which goes towards maintenance that will be done by the property owner. Renting provides effectively no housing security as in most places a landlord may evict a tenant with 30 or 60 day notice, and even in more renter friendly areas only provides security for the duration of the lease. The renter exchanges risk on the investment for risk on having housing at all.

The only situations in which renting makes sense (and I say this after only finally stopping renting this year) is when funding to buy is not available and housing is needed, or when the expected time of living in an area is a single lease term. Otherwise the amount of risk being at the whim of a landlord is greater than the risk on the real estate investment.

 

[JSt0rm]

1) So what you're saying is...buying a house is not always a wise decision

2) You think rent is bad here? Check out the housing prices. You're basically arguing my point #1 with that quoted comment - buying a house at the peak of the market is fucking stupid, and the LA housing market is fucking stupid high right now.

Its still lower then it was. The place I bought sold for 100k more in 2006 then I paid for it. I think there is still room to grow.

 

[JSt0rm]

The only situations in which renting makes sense (and I say this after only finally stopping renting this year) is when funding to buy is not available and housing is needed, or when the expected time of living in an area is a single lease term. Otherwise the amount of risk being at the whim of a landlord is greater than the risk on the real estate investment.

Well we do have rent control here. The landlord cant just do whatever they want and they also cant raise the rent to whatever they want (if you are in the right buildings. I know the laws changed on newer buildings or some such.)

 

[rh71]

1) So what you're saying is...buying a house is not always a wise decision

2) You think rent is bad here? Check out the housing prices. You're basically arguing my point #1 with that quoted comment - buying a house at the peak of the market is fucking stupid, and the LA housing market is fucking stupid high right now.

I'm in a suburb of NYC in one of the most expensive counties in the country and we've bought twice. I know housing price highs and lows by now. Home prices appreciated almost double by '06, and still people bought. Of course they are going to be screwed. But now they have normalized even if they are higher. If you don't buy at these prices, and at these interest rates, you may as well not buy at all. Continue dropping your cash in someone else's bucket and argue it's still worth it.

Buying a house is not always a wise decision? No that's not it, what I'm saying, is housing is not going to get you in the positive. What I'm saying, is renting is going to set you back everyday FOR SURE. But you know that.

How big is your family and when will you be buying so you can understand how much you've lost already?

 

[Tweak155]

Wow this thread got entertaining since I last posted. A few comments:

Safeway is definitely out of touch with reality regarding $10k/mo ... although it seems he slowly started to agree and acknowledge it just isn't some lifestyle of extreme luxury, which I agree it is not. It is an income that enables you to live a worry free life if you spend it right (at least for now). Also, sounds like this guy earned his current lot in life, the rest of you haters sound jelly. It's the guy with no determination / ambition that sees the guy driving the Lambo and assuming he's "lucky". Chances are he earned it.

As far as Ns1, I can agree that renting has its advantages, but it is still something you're paying for. You'd need some bad luck to lose money on a comparable house with similar house payment, but it's possible. If you do your research before just jumping in and buying though, great chances you'll be ahead. At the same time, buying isn't for everyone.

 

[Imp]

No, that was the market at the bottom of the largest economic collapse in 75 years.

That was also the real problem for the one person who lost on selling their house - selling at the bottom of a massive economic downturn is far from ideal.

The comparison for buying/renting:

Buying - Exchange an amount of money monthly to have housing, a portion of which is paid against a loan on an investment vehicle. Buying ensures a level of housing security, provided the mortgage and taxes are paid there are few things that can force an owner out of their home - the exchange is taking on the risk of the investment, a risk that declines as the loan principle decreases, and paying for maintenance.

Renting - Exchange an amount of money monthly to have housing, a small portion of which goes towards maintenance that will be done by the property owner. Renting provides effectively no housing security as in most places a landlord may evict a tenant with 30 or 60 day notice, and even in more renter friendly areas only provides security for the duration of the lease. The renter exchanges risk on the investment for risk on having housing at all.

The only situations in which renting makes sense (and I say this after only finally stopping renting this year) is when funding to buy is not available and housing is needed, or when the expected time of living in an area is a single lease term. Otherwise the amount of risk being at the whim of a landlord is greater than the risk on the real estate investment.

I think you're downplaying the risks associated with ownership a bit. Assuming one isn't rich, he/she likely has a substantial proportion of their net worth tied into their house. Even if it's "only" a $100k property, that's a lot of money to just walk away from for most people if any problem pops up (e.g. foundation issue, fire, leaky roof, broken furnace or A/C, electrical issue, someone gets injured on your property and sues you). If you lose your job, your ability to deal with those risks would be greatly affected. You may even be forced to sell an illiquid asset into a bad market -- even if you have a job but were forced to relocate. And things out of your control like the local economy might cause a substantial part of your net worth to disappear (e.g. Detroit, small boom towns). Are any of these likely to happen? Maybe not, but they can and are risks associated with ownership.

The main bad thing I got about renting from your post is that a landlord might kick you out at his/her whim. What's stopping you from finding a new rental, bunking with friends, or living out of a hotel? It'd definitely be annoying and take time, assuming you aren't somehow blacklisted by every landlord in the city, having to move and deal with stuff like this. Also, if the landlord is bad or major property issues pop up, a substantial portion of your net worth shouldn't be attached to it.

Having said that, I'd love to own a house, but it's not black and white with owning >>>> all.

 

[Murloc]

I posted in the one that Ns1 recently started. Not enough controversy and Ns1 is a poor debater.

try plastic vs cash and make sure the hiker joins the debate, success is guaranteed.
Tipping has been overdone.

 

[dullard]

How fucking lavish and extravagant is a 1400 square foot home, two mid-level ($30k) vehicles, and a baby? Not very.

The lavish part is in the past for you.

1) You bought a house in a fancy neighborhood in the city. You didn't rent, you didn't go out of the city, you didn't choose a less fancy neighborhood, you didn't go to a cheaper city. That, my friend, is lavish.

2) You and your wife both racked up ~$100k in student debt. The average student debt at graduation is ~$30k per person. So, you both spent at least triple the amount that most other people do. That is lavish AND extravagant. My wife and I are in the $10k/month post tax income range. We both went to colleges (undergrad and graduate) that weren't expensive and graduated with little debt (well under the average student debt even including graduate school). It can be done easily without needing $100k in student loans.

3) You went out and bought two nice new cars. That is lavish by any measure. And you didn't get cheap new cars that most people get when they owe $100k in student loans, you got nice new cars. A new Honda Civic is under $20k and would do you quite well so would many other entry level cars. Heck, I just recently got a new Camry for $25k (with leather seats). $30k is the upper standard car / lower premium car territory (with some bargaining it can get you a new Acura, Infiniti, Lincoln, BMW, etc. on the lower end of their offerings). Many people can never afford that level of car, and those who do often have to wait until their student loans are paid off and/or kids are out of school.

So, given your lavish past decisions, you are legitimately feeling like $10k is not much.

Luckilly for you the student loans will be done in a few years. The car loans and daycare too. When your car payments are over, save the $800/month you are paying on your cars for a few years. Then pay cash for your next cars (you have the income to be able to do this). Soon you'll be left with this:
$1600 mortgage,
$400 utilities (I made it less lavish),
$500 property tax / insurance,
$250 gas (I made it less lavish),
$200 car insurance,
$1000 food and eating out (gotta let you keep having a good time)
$500 on children,
$500 on misc.

That is under $5k and you are still living in a nice home in the city, with good cars, and get to go out frequently. And by then, hopefully you'll have a few raises and be in the $13k/month income range.