Originally Posted by SDW2001
Maybe not impossible, but it's quite difficult even if one doesn't finance consumer items. That's one thing I almost always avoid. I do have some credit card debt at the moment. But other than that, we don't finance anything other than our house and vehicles. A new TV? Pay for it. Furniture? Pay for it. The only exceptions I've had is when I have the money and zero percent financing is available, meaning I can use their money for free.
Well first again it isn't at all impossible. We used to be a very frugal society and I'm old enough to remember different prices being charged for cash versus credit because credit used to have a cost, not just be financed via Fed printing.
The point is norms can be positive or negative but regardless that doesn't make it a need versus a want. The norm right now might be smartphones for both adults in the household. The norm might be give the teens or kids as many minutes and text messages as they want. That is a want, not a need.
My wife and I have two Straight Talk plans for $45 a month which are still in the want range. We could get by with two $30 plans. My boys get $10 on their prepaid phones which are good for four months and gets them 100 minutes. The phones are for contact with parents. They can use wifi at home for attempts at socializing or better still, go out and play.
So my family, as an example spends $95 a month on four cell phones when I know most people I know are spending $200 on two smartphones and two kid phones.
Yet I know even we are in the want range and could easily knock that down to $65 a month. Could it go lower than that? I'm sure it easily could if it were down to bare need. The reality is most people just don't want to put up with less. The real point is in the future the choice may not be theirs. A great example is that PagePlus subleases Verizon lines and offers 2000 minutes for $80 good for a year. It comes out to 166 minutes a month. I know for a fact if push really came to shove I could live within that. I may not like it but that is the difference between want and need.
So for need we could honestly probably do $200 a year total on four cell phones. (Since we don't keep a house phone) We obviously spend about $1200 a year on that. That extra $1000 a year is WANT on my part (even though I'm supposedly a frugal person.) My "frugality" only looks like such when compared to the $200 cell bills a month almost all my friends and families have.
I don't know that it's all or even mostly the government. Much of it is lack of financial education. As for being an outlier, I still say that staying mostly out of debt while living with conveniences is difficult.
Most of it is lack of pure desire and the ability to choose different due to having the cash but letting/demanding the government compensate for the lack of investment. Some people feel obliged because the government has declared it ought to take on certain roles but in reality, in the deepest part of ourselves we all know we are ultimately responsible. I'm supposed to have a state pension that will let me retire at 60 years old. I'm supposed to have some level of Social Security from the years I worked outside of teaching. I've scrimped for my rental properties which should provide inflation adjusted retirement. Obviously that isn't a guarantee either since nothing in life is a guarantee. The point though is that those who think Social Security and the pension are a guarantee due to government promises are just delusional. I consider myself only half-delusional.
How much are Chinese peasants saving?
Last stats I read said around 29% of income.
Originally Posted by MJ1970
And we don't even finance cars. We still have the mortgage...but it is quite small relative to house value (even in stagnated housing economy like now). People need to get away from borrowing for consumption (borrowing for production is a different animal...but still needs to be handled wisely). Almost 90% of individual and government borrowing is for consumption. Business borrowing is for production. If people actually saved to buy things (including houses who's pricing isn't ratcheted up by government meddling) this would provide an amazing boon for the economy.
I suggest being very, very careful about those. Check the fine print on those. You can find yourself being late on a payment and suddenly owing all the back interest. It's a "gotcha" in those deals.
You hit the nail on the head. Other countries are borrowing to make more things. We are borrowing to consume more things. We don't make things and continue to borrow even more to make up the shortfall and it becomes a giant negative feedback cycle.It keeps taking me back to my favorite VDH bit. America is not post anything.