4 ms·

I don't think anything in this article implied that they were living above their means.

by kedean 12y ago

criley2 12y ago
The Mercedes was far above their means. A fully paid off, expensive, imported luxury vehicle. They made a choice: Sell the Mercedes (likely for $8,000 - $12,000 in cash) and support their family by supplementing their income for six month to a year on that, less after buying a $3000-$4000 daily driver. When you're in food-stamp-hyper-frugal-mode, $8,000 cash can keep your family alive for some time! They chose to get food stamps and keep the luxury car instead. It was their choice, but when you're driving around your "emergency fund" and your bank account is hovering at zero while Uncle Sam puts food on your table, some would suggest your priorities and means are a bit confusing.
- bsclifton 12y ago
  So a $30,000 car (or less if bought used) when you make $120k is living outside your means? If you have no debt and you have the ability to buy the car cash or pay it off within 1-2 years, how exactly is this bad- especially since you'd enjoy it? Sure, the boring thing to do would be to put all the money in savings... but if you think a 30k is outside your means, then you're probably so cheap you don't take vacations
  - jacquesm 12y ago
    > So a $30,000 car (or less if bought used) when you make $120k is living outside your means? Yes! > If you have no debt and you have the ability to buy the car cash or pay it off within 1-2 years, how exactly is this bad- especially since you'd enjoy it? Enjoyment does not enter into whether or not it is rational to put a substantial portion of your wealth in a depreciating asset such as a car. > Sure, the boring thing to do would be to put all the money in savings... But then you wouldn't be buying foodstamps five years down the line. > but if you think a 30k is outside your means, then you're probably so cheap you don't take vacations Being cheap and being smart with money are not the same thing, and using words like 'cheap' to target a person indicate that you are not approaching the subject rationally but would rather attack a person that has an opinion different from yours using a negative term than to bring a solid counterargument. Pity.
    - bsclifton 12y ago
      The real pity is the lady in the article having the 1st world problem mindset of treating WIC like it's something she gets as punishment I'm with you- as long as you make more than you spend and you can squirrel away 6 months of savings (to avoid situations where you need assistance), you're doing great. But enjoyment does count for something, which is what I was getting at. On paper, vacations are a complete waste of money, there is no rationalizing them; they're purely for enjoyment and you have nothing tangible at the end. The real mistake for these folks was not the $30k car purchase (that they paid off)... but the $200k of debt they introduced themselves to buy purchasing a house in a questionable market and being legally tied to it (unable to sell because it's underwater).
      - jacquesm 12y ago
        And to buy an expensive car when they could have gotten a cheaper one instead and use the difference to reduce the principal (which is exactly what I did when I bought the house I live in). For years I drove in ugly but reliable sub $1000 cars to pay down the debt as fast as I could.
  - criley2 12y ago
    >So a $30,000 car (or less if bought used) when you make $120k is living outside your means? You realize that their means change when they lose their job and apply for government benefits right? That we should reevaluate our priorities and budgets when our means change (we lose our job and become unemployed for a long period of time!) If you make 120k/yr and you receive government benefits like food stamps, I have some harsh words regarding your clear abuse of our safety nets. >then you're probably so cheap you don't take vacations Some offense intended: Just how young are you? Too "cheap" to take vacations? We're talking about losing jobs in a dual income family situation. How boring am I? Boring enough to budget and successfully raise a child. How immature are you? Because it clearly sounds like you are WAY WAY WAY too immature to raise a child. "Too cheap to take vacations"!! The audacity of an entitled young twenty-something! You sound like someone who is too immature to successfully put food on the table for your child because you're too busy spending your money validating your entitled luxury lifestyle to save your money and prepare your family for the unknowns of life.
    - bsclifton 12y ago
      Woah there internet tough-guy So now being able to take vacations (even if you're in financially good shape) is off limits? I'm not justifying anything that the lady in question did... but I think a 30k car and one vacation a year is reasonable on a 120k salary. Sounds like two people, yourself included, have said no- that is not acceptable (and that makes you entitled for thinking so). I know some extremely thrifty (or smart if you will) people that don't place any value on emotional experiences that might "recharge your batteries" that would argue it's a waste (even if you have more than enough money). Looks like you're one of them. When you lose your job, you're right- the "means" change and you need to re-evaluate things. I'm not questioning that. I was questioning how is a 30k car out of the means of $120k/year person, especially if they can buy it in cash.
      - deelowe 12y ago
        I think, given the context (accepting food stamps), it's somewhat reasonable to expect the family to cutback on luxuries until they get their finances in order. No one is saying they can't buy a car or take a vacation, but if they don't have any savings and are taking tax payer's money to support themselves, it's perfectly reasonable to claim that's irresponsible.
jacquesm 12y ago
I think we're going to have to disagree about that. To me living above your means is when the equation (monthly expenses > monthly income) is true. As soon as that happens you're on the skids and the longer you take to recognize that the longer it will take you to get back out of it (if you'll manage at all). I've been both fairly wealthy and (for western standards, I hasten to say) fairly poor and the only reason I never went bankrupt or needed assistance in the form of social security or loans is a ruthless cutting of costs when that was a necessity. To me having two vehicles when you have no income and two children with health issues is absolutely way above your means. Of course that situation sucks and it sucks even more that this happened in a country where healthcare is anything but free and getting around without a car is difficult but that does not change the cold hard facts. Feel free to shoot the messenger but better heed these words if your life situation ever should change for the worse in a short time, your future depends on your ability to adjust rapidly in situations like that, ignoring it or trying to postpone the inevitable will not help at all.
- kedean 12y ago
  And I would have to say that keeping things you purchased and paid off before having lowered means is not living above your current means. "Living above your means", to me, is making purchases and going into debt to maintain a standard of living that you can't afford. Buying that car would have been above their means, of course, but keeping it is not when it's completely paid off and in good working order. As many others have pointed out, the trade-in value of any ten year old vehicle with high mileage will not net you enough to justify the hassle or the risk of getting a car with hidden problems.
  - jacquesm 12y ago
    You can probably buy a Rolls Royce (they're cheap second hand), but you can't afford to own one if all you need is transportation. That's the problem here. So what you have versus what can afford are not necessarily the same thing. Fuel economy, maintenance costs, taxes, insurance that's where the problem lies and those are all cheaper for a simple Toyota than for a Mercedes.

I don't think anything in this article implied that they were living above their means.

by kedean 12y ago

I don't think anything in this article implied that they were living above their means.

The Mercedes was far above their means. A fully paid off, expensive, imported luxury vehicle. They made a choice: Sell the Mercedes (likely for $8,000 - $12,000 in cash) and support their family by supplementing their income for six month to a year on that, less after buying a $3000-$4000 daily driver. When you're in food-stamp-hyper-frugal-mode, $8,000 cash can keep your family alive for some time! They chose to get food stamps and keep the luxury car instead. It was their choice, but when you're driving around your "emergency fund" and your bank account is hovering at zero while Uncle Sam puts food on your table, some would suggest your priorities and means are a bit confusing.

bsclifton 12y ago
So a $30,000 car (or less if bought used) when you make $120k is living outside your means? If you have no debt and you have the ability to buy the car cash or pay it off within 1-2 years, how exactly is this bad- especially since you'd enjoy it? Sure, the boring thing to do would be to put all the money in savings... but if you think a 30k is outside your means, then you're probably so cheap you don't take vacations
- jacquesm 12y ago
  > So a $30,000 car (or less if bought used) when you make $120k is living outside your means? Yes! > If you have no debt and you have the ability to buy the car cash or pay it off within 1-2 years, how exactly is this bad- especially since you'd enjoy it? Enjoyment does not enter into whether or not it is rational to put a substantial portion of your wealth in a depreciating asset such as a car. > Sure, the boring thing to do would be to put all the money in savings... But then you wouldn't be buying foodstamps five years down the line. > but if you think a 30k is outside your means, then you're probably so cheap you don't take vacations Being cheap and being smart with money are not the same thing, and using words like 'cheap' to target a person indicate that you are not approaching the subject rationally but would rather attack a person that has an opinion different from yours using a negative term than to bring a solid counterargument. Pity.
  - bsclifton 12y ago
    The real pity is the lady in the article having the 1st world problem mindset of treating WIC like it's something she gets as punishment I'm with you- as long as you make more than you spend and you can squirrel away 6 months of savings (to avoid situations where you need assistance), you're doing great. But enjoyment does count for something, which is what I was getting at. On paper, vacations are a complete waste of money, there is no rationalizing them; they're purely for enjoyment and you have nothing tangible at the end. The real mistake for these folks was not the $30k car purchase (that they paid off)... but the $200k of debt they introduced themselves to buy purchasing a house in a questionable market and being legally tied to it (unable to sell because it's underwater).
    - jacquesm 12y ago
      And to buy an expensive car when they could have gotten a cheaper one instead and use the difference to reduce the principal (which is exactly what I did when I bought the house I live in). For years I drove in ugly but reliable sub $1000 cars to pay down the debt as fast as I could.
- criley2 12y ago
  >So a $30,000 car (or less if bought used) when you make $120k is living outside your means? You realize that their means change when they lose their job and apply for government benefits right? That we should reevaluate our priorities and budgets when our means change (we lose our job and become unemployed for a long period of time!) If you make 120k/yr and you receive government benefits like food stamps, I have some harsh words regarding your clear abuse of our safety nets. >then you're probably so cheap you don't take vacations Some offense intended: Just how young are you? Too "cheap" to take vacations? We're talking about losing jobs in a dual income family situation. How boring am I? Boring enough to budget and successfully raise a child. How immature are you? Because it clearly sounds like you are WAY WAY WAY too immature to raise a child. "Too cheap to take vacations"!! The audacity of an entitled young twenty-something! You sound like someone who is too immature to successfully put food on the table for your child because you're too busy spending your money validating your entitled luxury lifestyle to save your money and prepare your family for the unknowns of life.
  - bsclifton 12y ago
    Woah there internet tough-guy So now being able to take vacations (even if you're in financially good shape) is off limits? I'm not justifying anything that the lady in question did... but I think a 30k car and one vacation a year is reasonable on a 120k salary. Sounds like two people, yourself included, have said no- that is not acceptable (and that makes you entitled for thinking so). I know some extremely thrifty (or smart if you will) people that don't place any value on emotional experiences that might "recharge your batteries" that would argue it's a waste (even if you have more than enough money). Looks like you're one of them. When you lose your job, you're right- the "means" change and you need to re-evaluate things. I'm not questioning that. I was questioning how is a 30k car out of the means of $120k/year person, especially if they can buy it in cash.
    - deelowe 12y ago
      I think, given the context (accepting food stamps), it's somewhat reasonable to expect the family to cutback on luxuries until they get their finances in order. No one is saying they can't buy a car or take a vacation, but if they don't have any savings and are taking tax payer's money to support themselves, it's perfectly reasonable to claim that's irresponsible.

jacquesm 12y ago

I think we're going to have to disagree about that. To me living above your means is when the equation (monthly expenses > monthly income) is true. As soon as that happens you're on the skids and the longer you take to recognize that the longer it will take you to get back out of it (if you'll manage at all). I've been both fairly wealthy and (for western standards, I hasten to say) fairly poor and the only reason I never went bankrupt or needed assistance in the form of social security or loans is a ruthless cutting of costs when that was a necessity. To me having two vehicles when you have no income and two children with health issues is absolutely way above your means. Of course that situation sucks and it sucks even more that this happened in a country where healthcare is anything but free and getting around without a car is difficult but that does not change the cold hard facts. Feel free to shoot the messenger but better heed these words if your life situation ever should change for the worse in a short time, your future depends on your ability to adjust rapidly in situations like that, ignoring it or trying to postpone the inevitable will not help at all.

kedean 12y ago
And I would have to say that keeping things you purchased and paid off before having lowered means is not living above your current means. "Living above your means", to me, is making purchases and going into debt to maintain a standard of living that you can't afford. Buying that car would have been above their means, of course, but keeping it is not when it's completely paid off and in good working order. As many others have pointed out, the trade-in value of any ten year old vehicle with high mileage will not net you enough to justify the hassle or the risk of getting a car with hidden problems.
- jacquesm 12y ago
  You can probably buy a Rolls Royce (they're cheap second hand), but you can't afford to own one if all you need is transportation. That's the problem here. So what you have versus what can afford are not necessarily the same thing. Fuel economy, maintenance costs, taxes, insurance that's where the problem lies and those are all cheaper for a simple Toyota than for a Mercedes.