5 ms·

I make a pretty good living, know more or less what I can reasonably afford. I always assume the people driving fancy cars here in Scottsdale are mostly deeply

I make a pretty good living, know more or less what I can reasonably afford. I always assume the people driving fancy cars here in Scottsdale are mostly deeply in debt. As an aside though, the gen-x erasure continues here, comparing only millennials with boomers.

giarc 4y ago
I tell myself those people are in debt mostly for self preservation. My household income is great, but my wife drives a 2012 minivan and I drive a 2007 station wagon. I could not imagine spending $1000 or more a month on a new vehicle.
- vorpalhex 4y ago
  Put aside money every month now as a "car payment" and buy your next car in cash. Save yourself the interest and still have a plan if a vehicle gets lost.
- linuxftw 4y ago
  For many people, a nice vehicle is 'the thing' they've always wanted. Many people I know seem to spend as much as they can afford on a vehicle, it's part of the personality somehow. On the one hand, I can't really identify on spending so much money on something with so little utility. On the other hand, why are we making all this money if not to spend it on the things we desire? Before the world shut down, I was spending between $5-$10k per year on travel, but I have no vehicle payments and that represents (a good bit) less than 10% of my annual income. The problems really on start when you want to do both. If you need to have a new vehicle and travel, and whatever else, you're going to over extend.
- bombcar 4y ago
  A brand new Sienna will run you $600 a month or so on a good loan, with down-payment. And it'll get 32 MPG whilst doing it. It could be worth taking a look.
- sleepdreamy 4y ago
  I drive a 2019 CRV, 369 a month. It's really do-able if you have good credit and a downpayment. There is no need to spend 500+ on a vehicle a month. I could spend 1000/m on a car but that would be stupid for my salary range.
fartcannon 4y ago
Baby boomers and their kids, and soon their grandkids.
ericmay 4y ago
> As an aside though, the gen-x erasure continues here, comparing only millennials with boomers. Oh interesting. I hadn't picked up on that and I'll have to keep an eye out. From the article (sort of related): > Living paycheck-to-paycheck doesn’t necessarily mean hardship, and LendingClub makes the distinction between those can pay their bills easily and those who can’t. Only a fraction of high earners -- roughly one in ten -- reported issues covering all their household expenses in April, according to the survey. I don't understand this/not enough information. > To finance their lifestyles, higher-income households are more likely to put expenses on credit cards -- but also more likely to be able to pay off their balance in full. If they're anything like me, they do this because not doing it is a 1% - 4% increase in cost. Apple Card, for example, offers 2% cash back if you use Apple Pay. I do this (among using other cards) and pay off my balance in full each month. We have a monthly budget spreadsheet where we log expenses so it doesn't matter what method we use for payment, except that we get 2% cash back (among other things like fraud protection - not my money) which we sort of "don't account for" so that we have some extra savings that doesn't feel like savings. I feel like this article has a catchy headline, but ultimately they're trying to string together lots of pieces in some sort of frankenstein article.
- kevinventullo 4y ago
  Yeah, if someone is paying off their credit card in full every single month, I think it’s inaccurate to say they’re financing anything. They’re doing it for the points.
- 0xfeba 4y ago
  > If they're anything like me, they do this because not doing it is a 1% - 4% increase in cost. Yep, I have 3% cash back so I put every bill I can on my credit card, even if there's a fixed fee (usually $2-3) on it. I earn about $30-60/month that goes straight to savings.
  - stnmtn 4y ago
    If you don't mind my asking, where have you found a card that offers flat 3% cash back?
ramesh31 4y ago
Yeah, whenever I see young people driving brand new BMWs my first thought is always "I know that I make more money than you, and I could never afford that car". I truly do not understand who can actually afford a $1k car payment who isn't a millionaire.
- fullstop 4y ago
  If your mortgage is paid off it's definitely possible. I wouldn't waste that kind of money on a car, but a lot of things change when your housing costs drop drastically.
- driverdan 4y ago
  Most software engineers can afford $1k/m and still save plenty of money for retirement. The key is not living in a HCOL area and reducing your other spending.
- linuxftw 4y ago
  This is referred to as 'daddy's money.' A large portion of the youth today are living off of their parent's income or existing wealth. Their parents might not pay for their car, per se, but they're likely footing the majority of their other expenses such as paying for their apartment or condo, paying their tuition, giving them regular allowances, etc.

giarc 4y ago

I tell myself those people are in debt mostly for self preservation. My household income is great, but my wife drives a 2012 minivan and I drive a 2007 station wagon. I could not imagine spending $1000 or more a month on a new vehicle.

vorpalhex 4y ago
Put aside money every month now as a "car payment" and buy your next car in cash. Save yourself the interest and still have a plan if a vehicle gets lost.
linuxftw 4y ago
For many people, a nice vehicle is 'the thing' they've always wanted. Many people I know seem to spend as much as they can afford on a vehicle, it's part of the personality somehow. On the one hand, I can't really identify on spending so much money on something with so little utility. On the other hand, why are we making all this money if not to spend it on the things we desire? Before the world shut down, I was spending between $5-$10k per year on travel, but I have no vehicle payments and that represents (a good bit) less than 10% of my annual income. The problems really on start when you want to do both. If you need to have a new vehicle and travel, and whatever else, you're going to over extend.
bombcar 4y ago
A brand new Sienna will run you $600 a month or so on a good loan, with down-payment. And it'll get 32 MPG whilst doing it. It could be worth taking a look.
sleepdreamy 4y ago
I drive a 2019 CRV, 369 a month. It's really do-able if you have good credit and a downpayment. There is no need to spend 500+ on a vehicle a month. I could spend 1000/m on a car but that would be stupid for my salary range.

fartcannon 4y ago

Baby boomers and their kids, and soon their grandkids.

ericmay 4y ago

> As an aside though, the gen-x erasure continues here, comparing only millennials with boomers. Oh interesting. I hadn't picked up on that and I'll have to keep an eye out. From the article (sort of related): > Living paycheck-to-paycheck doesn’t necessarily mean hardship, and LendingClub makes the distinction between those can pay their bills easily and those who can’t. Only a fraction of high earners -- roughly one in ten -- reported issues covering all their household expenses in April, according to the survey. I don't understand this/not enough information. > To finance their lifestyles, higher-income households are more likely to put expenses on credit cards -- but also more likely to be able to pay off their balance in full. If they're anything like me, they do this because not doing it is a 1% - 4% increase in cost. Apple Card, for example, offers 2% cash back if you use Apple Pay. I do this (among using other cards) and pay off my balance in full each month. We have a monthly budget spreadsheet where we log expenses so it doesn't matter what method we use for payment, except that we get 2% cash back (among other things like fraud protection - not my money) which we sort of "don't account for" so that we have some extra savings that doesn't feel like savings. I feel like this article has a catchy headline, but ultimately they're trying to string together lots of pieces in some sort of frankenstein article.

kevinventullo 4y ago
Yeah, if someone is paying off their credit card in full every single month, I think it’s inaccurate to say they’re financing anything. They’re doing it for the points.
0xfeba 4y ago
> If they're anything like me, they do this because not doing it is a 1% - 4% increase in cost. Yep, I have 3% cash back so I put every bill I can on my credit card, even if there's a fixed fee (usually $2-3) on it. I earn about $30-60/month that goes straight to savings.
- stnmtn 4y ago
  If you don't mind my asking, where have you found a card that offers flat 3% cash back?

ramesh31 4y ago

Yeah, whenever I see young people driving brand new BMWs my first thought is always "I know that I make more money than you, and I could never afford that car". I truly do not understand who can actually afford a $1k car payment who isn't a millionaire.

fullstop 4y ago
If your mortgage is paid off it's definitely possible. I wouldn't waste that kind of money on a car, but a lot of things change when your housing costs drop drastically.
driverdan 4y ago
Most software engineers can afford $1k/m and still save plenty of money for retirement. The key is not living in a HCOL area and reducing your other spending.
linuxftw 4y ago
This is referred to as 'daddy's money.' A large portion of the youth today are living off of their parent's income or existing wealth. Their parents might not pay for their car, per se, but they're likely footing the majority of their other expenses such as paying for their apartment or condo, paying their tuition, giving them regular allowances, etc.