5 ms·

> Perhaps she could have saved up the money on her own, but whenever she has tried to do so, her stash has been wiped out to handle daily needs. I...what makes

by cheald 12y ago

> Perhaps she could have saved up the money on her own, but whenever she has tried to do so, her stash has been wiped out to handle daily needs. I...what makes you think you can handle payments on a lease if you can't save what you'd be paying on those payments otherwise? People are really bad at managing money. The proliferation of credit has done immense damage to peoples' abilities to conceptualize what they can afford.

pavel_lishin 12y ago
Because you don't need to save up as much to make payments on a lease. Those are, let's say $50 a month. As soon as you get your paycheck, you send that $50 to the rent-to-own agency, and that money is gone - they're "saving" it for you. Whereas if you keep putting that $25-per-paycheck into a savings account (or a shoebox, or a hollowed-out book or whatever), there will probably come a time when being able to fix your car's transmission, or buying food to make sure your kids aren't starving, or having just one dinner at a place with cloth napkins, is going to seem more important than whatever you're saving for.
- opendais 12y ago
  Which is really a sign that y'know, you can't afford what you were saving up for since you don't have enough saved for anything going wrong...
- cheald 12y ago
  But that just means that you couldn't afford the lease to begin with. All you're doing is spending your transmission-fixing money and ending up with no asset to show for it. You can't sell that couch to pay for your transmission - it's money down a hole. Yes, you can afford a payment today, but you can't afford the couch, if you can't otherwise save to buy it outright.
- kstenerud 12y ago
  Yes, exactly right. All the more reason not to hobble yourself with crippling financial obligations just to get a new sofa. They're essentially locking themselves into a financial decision that cannot be undone, and therefore when, later on down the road, more important financial decision points present themselves, they're unable to cope. But this ties into the poverty trap where you simply stop thinking about the future because you're out of hope.
- stavrianos 12y ago
  See, my first thought about this was that it was an impulse control thing- people fail at saving money because somehow it always gets spent, and this solves that problem. Except, you're exactly right- the stuff that the money gets spent on will frequently be wildly more important than the sofa. It should be saved, and then it should be spent on the more important stuff. And then you never get a sofa, but at least your transmission works and your kids aren't eating ramen six days a week.
oalders 12y ago
People can also be quite optimistic. You may think that in X months you'll have a better job, better pay, etc. "It will all work itself out." In many cases your situation doesn't improve and you're saddled with the debts, but I wouldn't necessarily say that people in debt are all bad at math. In some cases they're just not good at projecting future income.
- andrewstuart2 12y ago
  > Optimisic Aka shortsighted. And I'm definitely not saying I haven't been there.
- opendais 12y ago
  Yes. People are unwisely optimistic. I wish people weren't so encouraged to engage in wishful thinking but that would require a certain level of cruelty to get that point across. No one wants to go to people and say "Hey, your life is going to go into the shitter eventually, are you ready for it?" and keep pointing out that happens to everyone eventually, sometimes more than once.
  - pluma 12y ago
    Sure, but if you tell them that their life will be shit anyway, how's that helping their planning? They don't live in isolation. They're bombarded with a consumerist culture that tells them to live outside the standard they can reasonably afford. It takes an iron will to ignore all outside influences and be content with the stable level of poverty you can afford.
    - opendais 12y ago
      > Sure, but if you tell them that their life will be shit anyway, how's that helping their planning? I mean "shit" as in something goes wrong that makes things unpleasant. If you have the financial cushion, in the US, it isn't that bad [unless its medical, in which case you'll end up bankrupt much of the time although hopefully ACA will reduce that issue]. > They don't live in isolation. They're bombarded with a consumerist culture that tells them to live outside the standard they can reasonably afford. It takes an iron will to ignore all outside influences and be content with the stable level of poverty you can afford. Tbh, I agree with you. I want to go back to renting a room so I can save more money and my friends/family all openly attack me on the idea because "No woman will want you, blah blah", etc. The hilarious part is the same ones mock me for "consuming too much" even tho the handful of things they mock me about collectively cost less than $50/month compared to saving $1k/month by renting a room. I'm single now and I don't need that much space.

by cheald 12y ago

pavel_lishin 12y ago

Because you don't need to save up as much to make payments on a lease. Those are, let's say $50 a month. As soon as you get your paycheck, you send that $50 to the rent-to-own agency, and that money is gone - they're "saving" it for you. Whereas if you keep putting that $25-per-paycheck into a savings account (or a shoebox, or a hollowed-out book or whatever), there will probably come a time when being able to fix your car's transmission, or buying food to make sure your kids aren't starving, or having just one dinner at a place with cloth napkins, is going to seem more important than whatever you're saving for.

opendais 12y ago
Which is really a sign that y'know, you can't afford what you were saving up for since you don't have enough saved for anything going wrong...
cheald 12y ago
But that just means that you couldn't afford the lease to begin with. All you're doing is spending your transmission-fixing money and ending up with no asset to show for it. You can't sell that couch to pay for your transmission - it's money down a hole. Yes, you can afford a payment today, but you can't afford the couch, if you can't otherwise save to buy it outright.
kstenerud 12y ago
Yes, exactly right. All the more reason not to hobble yourself with crippling financial obligations just to get a new sofa. They're essentially locking themselves into a financial decision that cannot be undone, and therefore when, later on down the road, more important financial decision points present themselves, they're unable to cope. But this ties into the poverty trap where you simply stop thinking about the future because you're out of hope.
stavrianos 12y ago
See, my first thought about this was that it was an impulse control thing- people fail at saving money because somehow it always gets spent, and this solves that problem. Except, you're exactly right- the stuff that the money gets spent on will frequently be wildly more important than the sofa. It should be saved, and then it should be spent on the more important stuff. And then you never get a sofa, but at least your transmission works and your kids aren't eating ramen six days a week.

oalders 12y ago

People can also be quite optimistic. You may think that in X months you'll have a better job, better pay, etc. "It will all work itself out." In many cases your situation doesn't improve and you're saddled with the debts, but I wouldn't necessarily say that people in debt are all bad at math. In some cases they're just not good at projecting future income.

andrewstuart2 12y ago
> Optimisic Aka shortsighted. And I'm definitely not saying I haven't been there.
opendais 12y ago
Yes. People are unwisely optimistic. I wish people weren't so encouraged to engage in wishful thinking but that would require a certain level of cruelty to get that point across. No one wants to go to people and say "Hey, your life is going to go into the shitter eventually, are you ready for it?" and keep pointing out that happens to everyone eventually, sometimes more than once.
- pluma 12y ago
  Sure, but if you tell them that their life will be shit anyway, how's that helping their planning? They don't live in isolation. They're bombarded with a consumerist culture that tells them to live outside the standard they can reasonably afford. It takes an iron will to ignore all outside influences and be content with the stable level of poverty you can afford.
  - opendais 12y ago
    > Sure, but if you tell them that their life will be shit anyway, how's that helping their planning? I mean "shit" as in something goes wrong that makes things unpleasant. If you have the financial cushion, in the US, it isn't that bad [unless its medical, in which case you'll end up bankrupt much of the time although hopefully ACA will reduce that issue]. > They don't live in isolation. They're bombarded with a consumerist culture that tells them to live outside the standard they can reasonably afford. It takes an iron will to ignore all outside influences and be content with the stable level of poverty you can afford. Tbh, I agree with you. I want to go back to renting a room so I can save more money and my friends/family all openly attack me on the idea because "No woman will want you, blah blah", etc. The hilarious part is the same ones mock me for "consuming too much" even tho the handful of things they mock me about collectively cost less than $50/month compared to saving $1k/month by renting a room. I'm single now and I don't need that much space.