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There is no doubt that they have spent money foolishly, but bear in mind you are talking about them spending on a wedding and college. These are not trips to V

There is no doubt that they have spent money foolishly, but bear in mind you are talking about them spending on a wedding and college. These are not trips to Vegas with hookers and blow, but rather core human experiences, closely tied to the concept of "middle class" themselves, and not financial back-breakers for middle class families in the past. So, yes, there is some blame to be apportioned for the spending habits. However, there is also the systemic problem of real incomes declining significantly, with major life costs (housing, education, medical, taxation) increasing dramatically: https://research.stlouisfed.org/fred2/graph/fredgraph.png?width=880&height=440&id=MEHOINUSA672N https://research.stlouisfed.org/fred2/graph/fredgraph.png?wi... This problem is significantly worse if you use the old CPI, which some people feel is more honest: http://www.soundmoneyproject.org/wp-content/uploads/2012/03/Household-income.png http://www.soundmoneyproject.org/wp-content/uploads/2012/03/... Either way, the decline in real wages in the face of rising major life costs is a major contributor to the increasingly precarious position of many middle class families.

koolba 11y ago
> These are not trips to Vegas with hookers and blow, but rather core human experiences, closely tied to the concept of "middle class" themselves, and not financial back-breakers for middle class families in the past. I have more respect for someone who blows all their money on "hookers and blow" (or whatever their personal equivalent is) than keeping up with the Jones. If you're gonna flush your wad of cash down the toilet, pick your own stall!
- geodel 11y ago
  I totally agree with that. Though my chosen low expense lifestyle hasn't earned me any respect from consumerist drones friends and colleagues.
  - tamana 11y ago
    I'll be your frugal friend and respect you. I blow my money on charity medical relief in impoverished regions, not fancily-plated food.
- anon4 11y ago
  Maybe keeping up with the Jetsons is their personal equivalent?
jbob2000 11y ago
You don't need to have an expensive wedding, worthy of emptying a retirement savings account. You can still have a wedding, just don't spend 40 years of savings on it. And you can still go to college, but go to a state college and live at home. The con these private universities are pulling on the middle class is something for the history books. They sell this "university lifestyle" to impressionable, naive high schoolers who then throw themselves (or parents) into stupid amounts of debt just to live the lifestyle.
- jazzyk 11y ago
  This. See my comment in this thread (basically saying the same thing)
- auntienomen 11y ago
  Mostly agree. But someone who turns down Stanford for State U is throwing away a golden ticket. The opportunities at state school just are not comparable.
  - kom107 11y ago
    That's not entirely true. See: http://yscouts.com/executive/where-did-fortune-500-ceos-go-to-college/ http://yscouts.com/executive/where-did-fortune-500-ceos-go-t... Stanford has some fantastic opportunities, sure. But those opportunities come with significant opportunity costs (at the very least, financially). For some, it is better to attend a state school; the mental calculus involved in making this decision is rather difficult for an 18 year old and his/her family, especially with all of the noise that surrounds the college admissions process. If a kid is going to be a success, they'll be a success. Multiple studies support this: http://www.huffingtonpost.com/2014/07/20/where-you-go-to-college_n_5120129.html http://www.huffingtonpost.com/2014/07/20/where-you-go-to-col... Disclaimer: I'm a proud Penn State alum, which was (at the time) my safety school. Just my $0.02.
    - tamana 11y ago
      The relevant question isn't whether Stanford admits will do better at Stanford or elsewhere. They will be fine regardless. The question is whether Stanford non-admits should try to buy their way to prestige by attending American over UVa or UMd.
yellowstuff 11y ago
About 4% of 18-24 year olds in the US went to private 4 year colleges in 1973, and 8% in 2012. So private higher education has become more accessible (with good and bad effects) but is still a privilege of the well off, not a core human experience. This doesn't contradict your point that real incomes are declining. http://www.statista.com/statistics/183995/us-college-enrollment-and-projections-in-public-and-private-institutions/ http://www.statista.com/statistics/183995/us-college-enrollm... http://nces.ed.gov/programs/digest/d13/tables/dt13_302.60.asp http://nces.ed.gov/programs/digest/d13/tables/dt13_302.60.as...
- maxerickson 11y ago
  The pretty huge increase in tuition at public colleges is the problem. For one thing, top state universities are better schools than the majority of private colleges. They have research programs and a much wider course selection.
jazzyk 11y ago
I agree with you on major life costs increasing. However, you didn't explain why. There are, IMO, two reasons: - maintaining demand by incessant, aspirational media pressure e.g. if you don't have a Cinderella-like wedding costing $100K+, you are a failure (it is the most important day of your life, right? right?) - easy availability of credit to finance these wants (not needs) A lot of people believe that a $100K wedding must be better than a $10K one, or a $75K/year college must be better than a state university. I'd exclude taxes and health care, though. These are a bit different, because you don't really have much of a choice here.
whatok 11y ago
None of that excuses poor financial decisions. Raiding your 401k for frivolous (yes I'm calling a wedding that) expenses is against any personal finance 101. I'm willing to bet that the author's financial illiteracy did not start at whatever age they happen to be and that they likely have made a series of poor financial choices throughout their life. Financing your kid's college when you have no savings will have a crippling effect on you as well as your kids when they have to not only pay back the money you borrowed but also pay for your retirement because you didn't save any money.
- deleted 11y ago
  [deleted]
- thomaskcr 11y ago
  When did it become normal for parents to pay for college? I always thought that was something you do as basically a huge gift. I came out with a bit over $100k but I chose that school knowing full well it would mean 10 years of higher payments and it was worth every penny in my opinion (I got so much out of college - I feel like the only person who came out with a huge loan that's happy with it). My parents paid the interest on my loans all through college and made the first couple payments while I transitioned into the real world -- I am eternally grateful they did even that for me. I see it more and more that parents are expected to pay for their children to go to school - which also means that a big part of my loans are probably because of my father's income being counted when I did the FASFA. If the non-dischargability of the loans is based on a lack of finanical history (which I know I'm in the minority but I do feel that's fair), then the applications for financial assistance really shouldn't take it into account unless your parents are actually paying for your school.
tamana 11y ago
Your are doing the same thing the writer does -- claiming that expensive luxuries, enjoyed only by the richest top 10% of Americans and top 1% of world citizens -- are core lfe essentials.
JabavuAdams 11y ago
> There is no doubt that they have spent money foolishly, but bear in mind you are talking about them spending on a wedding and college My value-system doesn't lump wedding and college together. It seems much more reasonable for parents to sacrifice their own well-being to send their kids to elite schools. The whole wedding thing seems crazy to me, though. Considering how bad financial distress is for a marriage, it seems like a really terrible idea to stretch yourself for a wedding. There should be (not saying there isn't) no shame in getting married at City Hall, with a few of your closest friends and family. Could be the best marital decision you make, if it puts you on a better financial trajectory.
- scarface74 11y ago
  Why is it any better idea to stretch yourself to go to an "elite" college? The only way that the authors children "earned" the right to go there is if they were awarded a full scholarship. I went to an unknown stare college, stated at home and got a degree in computer science. After my first three years of working - almost 20 years ago - my salary has been comparable to anyone else's. No one cares what college I graduated from.
  - whatok 11y ago
    Depending on the industry, college choice matters from when you graduate and very long into the future. I'd argue it might be worth parents going into debt for certain colleges but then I'd also argue that if a kid was smart enough to get into their pick of colleges, they probably should have a load of academic scholarships anyway.
massysett 11y ago
"not financial back-breakers for middle class families in the past." I doubt that middle class families in the past routinely had weddings that required the rental of dedicated space and staffing by a dozen or more paid individuals. Maybe you had it in the church and had a potluck afterwards in the basement, or maybe you had it in a large rural backyard. Of course, before, middle-class people also did not retire for decades and expect to spend that time traveling and not working. They did not expect to drive cars with air conditioning, carry supercomputers in their pocket, watch 200 channels on TV, or live in large air-conditioned suburban homes. So what has happened is that the perception of "middle class" lifestyle has grown to include considerably more consumption. That's ok. It's just sort of puzzling to read this piece--he seems to say "I've had a good life, I've gotten good things for my kids, I don't have money in the bank, but it's my own fault, so I'm not complaining." Which is nice, but why is that worth reading?
kamaal 11y ago
>>but rather core human experiences, closely tied to the concept of "middle class" themselves, and not financial back-breakers for middle class families in the past. What constitutes 'core human experiences'? There are people in this very forum who think a vacation per year is a very valid human need because 'life happens only once'. So by many a measure 'the trip to vegas' is a 'core human experience'. Plus there is a very think line of difference between a vacation to vegas or grand canyon. The right way to measure a 'core human experience' is to ask what is the person's highest priority? If you ask me nothing is more important to me than putting food on the table, having clothes to wear, a roof above my head and enough cash for my health expenses when I grow old. That said, now I have to plan my finances accordingly. I can't spend a good chunk on everything else and then complain I don't have enough. People at all levels of income are faced with 'priorities', this includes millionaires as well.
SilasX 11y ago
But no increase in discretionary income can ever resolve worries about spending on positional goods[0], which the wedding is -- since positional goods involve spending to achieve a rank relative to others, then achieving a certain rank will be just as burdensome, regardless of how much wealth the middle class enjoys, since the highest-ranked people will blow an "uncomfortable" amount to get the high rank. You're right about those other goods though: if people have to shell out all their discretionary income to cover some minimum baseline in those categories, then that is a solvable problem. Arguably, though, education and housing have become positional (and thus intractable via discretionary income) because people are trying to achieve a relative rank through them, not some baseline of quality. [0] basically a good that derives its value from its ranking relative to others, not absolute metrics https://en.wikipedia.org/wiki/Positional_good https://en.wikipedia.org/wiki/Positional_good
PhantomGremlin 11y ago
These are not trips to Vegas with hookers and blow, but rather core human experiences My wife and I had a Vegas wedding. Without any hookers or blow. A total of four other people at our wedding; they paid their own way there. My wife and I used the money we saved on our wedding to help fund the purchase of a house (and all the crazy additional expenses that involves). We're still married 20 years later, Contrast that with one gal who had a very elaborate wedding, at an expensive venue, with many guests, and who subsequently divorced within a year. What of the "core human experiences" of all the people who attended that misbegotten wedding? Life comes down to choices. Few people are rich enough to be able to afford everything they may feel entitled to as part of the "middle class". systemic problem of real incomes declining significantly, with major life costs (housing, education, medical, taxation) increasing dramatically All that is very true. But it doesn't excuse foolish financial decisions about the events that people do have total control over. the decline in real wages in the face of rising major life costs is a major contributor to the increasingly precarious position of many middle class families. Yeah, that and the fact that many people can't grasp the simple concept of saving for a rainy day.

koolba 11y ago

> These are not trips to Vegas with hookers and blow, but rather core human experiences, closely tied to the concept of "middle class" themselves, and not financial back-breakers for middle class families in the past. I have more respect for someone who blows all their money on "hookers and blow" (or whatever their personal equivalent is) than keeping up with the Jones. If you're gonna flush your wad of cash down the toilet, pick your own stall!

geodel 11y ago
I totally agree with that. Though my chosen low expense lifestyle hasn't earned me any respect from consumerist drones friends and colleagues.
- tamana 11y ago
  I'll be your frugal friend and respect you. I blow my money on charity medical relief in impoverished regions, not fancily-plated food.
anon4 11y ago
Maybe keeping up with the Jetsons is their personal equivalent?

jbob2000 11y ago

You don't need to have an expensive wedding, worthy of emptying a retirement savings account. You can still have a wedding, just don't spend 40 years of savings on it. And you can still go to college, but go to a state college and live at home. The con these private universities are pulling on the middle class is something for the history books. They sell this "university lifestyle" to impressionable, naive high schoolers who then throw themselves (or parents) into stupid amounts of debt just to live the lifestyle.

jazzyk 11y ago
This. See my comment in this thread (basically saying the same thing)
auntienomen 11y ago
Mostly agree. But someone who turns down Stanford for State U is throwing away a golden ticket. The opportunities at state school just are not comparable.
- kom107 11y ago
  That's not entirely true. See: http://yscouts.com/executive/where-did-fortune-500-ceos-go-to-college/ http://yscouts.com/executive/where-did-fortune-500-ceos-go-t... Stanford has some fantastic opportunities, sure. But those opportunities come with significant opportunity costs (at the very least, financially). For some, it is better to attend a state school; the mental calculus involved in making this decision is rather difficult for an 18 year old and his/her family, especially with all of the noise that surrounds the college admissions process. If a kid is going to be a success, they'll be a success. Multiple studies support this: http://www.huffingtonpost.com/2014/07/20/where-you-go-to-college_n_5120129.html http://www.huffingtonpost.com/2014/07/20/where-you-go-to-col... Disclaimer: I'm a proud Penn State alum, which was (at the time) my safety school. Just my $0.02.
  - tamana 11y ago
    The relevant question isn't whether Stanford admits will do better at Stanford or elsewhere. They will be fine regardless. The question is whether Stanford non-admits should try to buy their way to prestige by attending American over UVa or UMd.

yellowstuff 11y ago

About 4% of 18-24 year olds in the US went to private 4 year colleges in 1973, and 8% in 2012. So private higher education has become more accessible (with good and bad effects) but is still a privilege of the well off, not a core human experience. This doesn't contradict your point that real incomes are declining. http://www.statista.com/statistics/183995/us-college-enrollment-and-projections-in-public-and-private-institutions/ http://www.statista.com/statistics/183995/us-college-enrollm... http://nces.ed.gov/programs/digest/d13/tables/dt13_302.60.asp http://nces.ed.gov/programs/digest/d13/tables/dt13_302.60.as...

maxerickson 11y ago
The pretty huge increase in tuition at public colleges is the problem. For one thing, top state universities are better schools than the majority of private colleges. They have research programs and a much wider course selection.

jazzyk 11y ago

I agree with you on major life costs increasing. However, you didn't explain why. There are, IMO, two reasons: - maintaining demand by incessant, aspirational media pressure e.g. if you don't have a Cinderella-like wedding costing $100K+, you are a failure (it is the most important day of your life, right? right?) - easy availability of credit to finance these wants (not needs) A lot of people believe that a $100K wedding must be better than a $10K one, or a $75K/year college must be better than a state university. I'd exclude taxes and health care, though. These are a bit different, because you don't really have much of a choice here.

whatok 11y ago

None of that excuses poor financial decisions. Raiding your 401k for frivolous (yes I'm calling a wedding that) expenses is against any personal finance 101. I'm willing to bet that the author's financial illiteracy did not start at whatever age they happen to be and that they likely have made a series of poor financial choices throughout their life. Financing your kid's college when you have no savings will have a crippling effect on you as well as your kids when they have to not only pay back the money you borrowed but also pay for your retirement because you didn't save any money.

deleted 11y ago
[deleted]
thomaskcr 11y ago
When did it become normal for parents to pay for college? I always thought that was something you do as basically a huge gift. I came out with a bit over $100k but I chose that school knowing full well it would mean 10 years of higher payments and it was worth every penny in my opinion (I got so much out of college - I feel like the only person who came out with a huge loan that's happy with it). My parents paid the interest on my loans all through college and made the first couple payments while I transitioned into the real world -- I am eternally grateful they did even that for me. I see it more and more that parents are expected to pay for their children to go to school - which also means that a big part of my loans are probably because of my father's income being counted when I did the FASFA. If the non-dischargability of the loans is based on a lack of finanical history (which I know I'm in the minority but I do feel that's fair), then the applications for financial assistance really shouldn't take it into account unless your parents are actually paying for your school.

tamana 11y ago

Your are doing the same thing the writer does -- claiming that expensive luxuries, enjoyed only by the richest top 10% of Americans and top 1% of world citizens -- are core lfe essentials.

JabavuAdams 11y ago

> There is no doubt that they have spent money foolishly, but bear in mind you are talking about them spending on a wedding and college My value-system doesn't lump wedding and college together. It seems much more reasonable for parents to sacrifice their own well-being to send their kids to elite schools. The whole wedding thing seems crazy to me, though. Considering how bad financial distress is for a marriage, it seems like a really terrible idea to stretch yourself for a wedding. There should be (not saying there isn't) no shame in getting married at City Hall, with a few of your closest friends and family. Could be the best marital decision you make, if it puts you on a better financial trajectory.

scarface74 11y ago
Why is it any better idea to stretch yourself to go to an "elite" college? The only way that the authors children "earned" the right to go there is if they were awarded a full scholarship. I went to an unknown stare college, stated at home and got a degree in computer science. After my first three years of working - almost 20 years ago - my salary has been comparable to anyone else's. No one cares what college I graduated from.
- whatok 11y ago
  Depending on the industry, college choice matters from when you graduate and very long into the future. I'd argue it might be worth parents going into debt for certain colleges but then I'd also argue that if a kid was smart enough to get into their pick of colleges, they probably should have a load of academic scholarships anyway.

massysett 11y ago

"not financial back-breakers for middle class families in the past." I doubt that middle class families in the past routinely had weddings that required the rental of dedicated space and staffing by a dozen or more paid individuals. Maybe you had it in the church and had a potluck afterwards in the basement, or maybe you had it in a large rural backyard. Of course, before, middle-class people also did not retire for decades and expect to spend that time traveling and not working. They did not expect to drive cars with air conditioning, carry supercomputers in their pocket, watch 200 channels on TV, or live in large air-conditioned suburban homes. So what has happened is that the perception of "middle class" lifestyle has grown to include considerably more consumption. That's ok. It's just sort of puzzling to read this piece--he seems to say "I've had a good life, I've gotten good things for my kids, I don't have money in the bank, but it's my own fault, so I'm not complaining." Which is nice, but why is that worth reading?

kamaal 11y ago

>>but rather core human experiences, closely tied to the concept of "middle class" themselves, and not financial back-breakers for middle class families in the past. What constitutes 'core human experiences'? There are people in this very forum who think a vacation per year is a very valid human need because 'life happens only once'. So by many a measure 'the trip to vegas' is a 'core human experience'. Plus there is a very think line of difference between a vacation to vegas or grand canyon. The right way to measure a 'core human experience' is to ask what is the person's highest priority? If you ask me nothing is more important to me than putting food on the table, having clothes to wear, a roof above my head and enough cash for my health expenses when I grow old. That said, now I have to plan my finances accordingly. I can't spend a good chunk on everything else and then complain I don't have enough. People at all levels of income are faced with 'priorities', this includes millionaires as well.

SilasX 11y ago

But no increase in discretionary income can ever resolve worries about spending on positional goods[0], which the wedding is -- since positional goods involve spending to achieve a rank relative to others, then achieving a certain rank will be just as burdensome, regardless of how much wealth the middle class enjoys, since the highest-ranked people will blow an "uncomfortable" amount to get the high rank. You're right about those other goods though: if people have to shell out all their discretionary income to cover some minimum baseline in those categories, then that is a solvable problem. Arguably, though, education and housing have become positional (and thus intractable via discretionary income) because people are trying to achieve a relative rank through them, not some baseline of quality. [0] basically a good that derives its value from its ranking relative to others, not absolute metrics https://en.wikipedia.org/wiki/Positional_good https://en.wikipedia.org/wiki/Positional_good

PhantomGremlin 11y ago

These are not trips to Vegas with hookers and blow, but rather core human experiences My wife and I had a Vegas wedding. Without any hookers or blow. A total of four other people at our wedding; they paid their own way there. My wife and I used the money we saved on our wedding to help fund the purchase of a house (and all the crazy additional expenses that involves). We're still married 20 years later, Contrast that with one gal who had a very elaborate wedding, at an expensive venue, with many guests, and who subsequently divorced within a year. What of the "core human experiences" of all the people who attended that misbegotten wedding? Life comes down to choices. Few people are rich enough to be able to afford everything they may feel entitled to as part of the "middle class". systemic problem of real incomes declining significantly, with major life costs (housing, education, medical, taxation) increasing dramatically All that is very true. But it doesn't excuse foolish financial decisions about the events that people do have total control over. the decline in real wages in the face of rising major life costs is a major contributor to the increasingly precarious position of many middle class families. Yeah, that and the fact that many people can't grasp the simple concept of saving for a rainy day.