I am horrified by how many people are trying to keep up with the Joneses. I don't pry into people's lives and I certainly don't ask questions about income or finances but this week has been sad and eye opening.
Right now the weather sucks. So my DK2 is in an early intervention group for speech. Kiddo is delayed probably due to hearing impairment. The group has probably 8-9 kids and we "drop off" our toddlers for 1.5 hours to interact and speak with each other and teachers. During this time we often sit and chit chat in a room while we wait since we can't leave the building. You get to know these people, this is my 3rd week. So this week with the bad weather people were discussing parking, driving, and cars. One woman just bought a brand new 2015 lexus IS350. But she said it's leased and great in the snow. While guy next to me said he and his wife had just leased 2014 Honda Accords and CR-V. I said I own a subaru. The conversation continues and both people are talking about not being able to save for college or any money. I bite my tongue from saying "well probably leasing these fancy cars are the reason." But what can you say right?
The next day I am having a playdate with a friend (Ms A) who I've always known has money problems. They make more than enough money but can't seem to pay any bills and spends money like it's water. Ms A has three kids, lives pretty much rent free with her mom, and her husband makes $60k/year cash. Her mom owns a multifamily building and they live in a big unit and should be paying $1500 (way under market value, should be closer to $4500/month) but often don't pay her mom. Ms A husband doesn't file taxes and mostly works for cash as a mechanic/construction/snow plow. She says to me on Wednesday "if only we made $120k or double what we make now and all our financial problems would go away. I know we'd be able to move out and afford everything." I again had to bite my tongue from saying there is no way doubling your income would help. She only shops at Whole Foods, buys organic food only, uses babysitters to go to yoga, pays the minimum on her CC, gets laser hair removal, and drives a mercedes. She makes bad financial decisions and I've seen it when she pulls out three different cards and says "charge 1 kid on each card to go to a museum or playspace." Making more money is not going to help her.
I like to believe the glass is half full and from reading SA and other sites I think there are people saving money. I'd like to think most people are fiscally responsible. Then a week like this happens and it's depressing. It's depressing knowing that people driving these new fancy cars Lexus, Benz, etc can't really afford it like I assume they can.
The two parents in the toddler group I hope the best, and perhaps they have a great reason for leasing their cars. But since they can't seem to save I don't think so.
As for my friend? Ms A is a lost cause and perhaps when she grows up and her mother kicks her out then she'll suddenly realize more money = more happiness and the ability to save. You should be able to save no matter what the income.
On a good note DH got an average review at work and a raise. I think 3%. Best in his department considering most are on probation. It should make him happy but instead it makes him depressed.
So many Joneses
February 13th, 2015 at 03:16 pm
February 13th, 2015 at 03:44 pm 1423842291
My thoughts on this one are: its a dangerous and slippery slope. And admittedly, you don't really truly know the backstory - with maybe the exception of your friend Ms A, but then again - maybe not.
Here is my reality. My husband makes far less than $100K and we live in area where most people do. Most parents are VPs and lawyers/doctors in the Catholic schools that he send our kids to. My younger daughter has a $20K scholarship for four years ($5K per year) and the older one averages at least $3.5K per year. My kids are in Club Soccer - three sons which would cost about $8K a year. My oldest son is particularly gifted and won an individual competition at state a few years back. He was recruited, and we said they could have him if they took the younger brothers. They discount our fees at least 75% and we usually get the third uniform free. That's the boys.
The girls are Irish dancers. They attend one day a week rather than two because that is all that we can afford. Two months they study hard shoes, then they flop and two months they study soft shoes. The oldest one has started to be certified so she can teach and further defray the cost. The dance dresses? Grandparents purchased the first go around - and we sell what we have before we buy again (used). This go around we were able to make a profit after we sold and had local custom dresses made (less than buying used out of Ireland). Shoes? We resole them now that the girls have stopped growing. When they were little we were always borrowing and trading.
And, I don't work outside of the home. Sure I do a lot of volunteer work for the parish we attend and the discount for the three youngest is almost nothing.
So if people judged us on the fact that we are a one-income family with a SAHM and five kids in Catholic schools all participating in expensive sports, people would draw the wrong conclusions.
February 13th, 2015 at 04:29 pm 1423844969
The Joneses stuff is really bad where I live and I know too many of the gory details. (I know my client's gory details and everyone always tells me their finances in exchange for tax or financial advice). You know, everyone we know has lost their house to foreclosure, stuff like that. These people were young and they could learn and move on, but the problem is they are not learning. So they all go out and buy a more expensive and more lavish home that they can not afford. ??? I know one or two people who maybe thought about downsizing or righting their ship?? Our parents are endlessly helping their friends financially too. They are all totally screwed. My in-laws are helping an aunt get her house sold and figure out how to pay her bills and where she is going to live. My parents are helping a friend evaluate reverse mortgages and if he should take social security, yadda yadda. We are like the financial bartenders I guess. Everyone turns to us when they have financial questions. Tax season horrifies me when I see the people well employed (a rarity in this economy) who have -0- saved for retirement. That would be just about everyone under age 50.
February 13th, 2015 at 04:57 pm 1423846648
February 13th, 2015 at 06:56 pm 1423853798
I never assume people are actually rich when I see them with fancy cars, designer clothes, expensive hairdos. I love my tenants/neighbors/friends, but I see them eating out and decorating their part of the house and think, I know you haven't done your self-employment taxes in years. I know only one of you is contributing to retirement right now. I know you have student loans beyond all comprehension that you're not really dealing with. Even though your life looks a lot swankier than mine now, you're probably going to be sweating a lot more in later years.
I get dressed down on this site -- and rightly so -- for not having enough in retirement. But at the same time I know I'm better off than at least 75% (probably more) of the people I know in real life. It's such a weird dichotomy.
February 13th, 2015 at 06:59 pm 1423853974
February 13th, 2015 at 07:18 pm 1423855127
He became a builder and we live on about $50-60 thousand a year. His one weekness is new corvettes, but we scrimp on everything else and don't mind it at all. I have not had a house payment in almost 40 years and we finance all the homes we build (spec houses) All the cars are paid for too.
His brother has a big problem with money. (He doesn't have any, but they live high on the hog.)
February 13th, 2015 at 10:30 pm 1423866606
I also NEVER assume someone with anything luxurious has it together. Some do. Some don't. Same with people that have a small house. They may have lot of investments or they may be broke.
February 13th, 2015 at 11:08 pm 1423868922
February 14th, 2015 at 02:18 am 1423880315
February 14th, 2015 at 07:07 am 1423897672
I spent more of my life without money than with it.
Now that our income has outgrown our expenses (only very recently) we try to save as much as we can.
I see jones stuff at the highest levels you cant imagine.
I HAD a friend who always earn around 180k right from leaving University.
The whole time I new him I earned less than 70k, in one of the world top 10 most expensive cities and a family of four. on payday he would think nothing of buying a 10k drum kit. yes a 10k drum kit, then couple of weeks later borrow money off me to go buy a suit for formal function.
We rent a 2 bedroom apartment in a multigenerational home. The main area is rented by two bank employees making combined 60k.
We pay $835 a month they pay $1900. we have four people and two bedrooms.
they have two people and 4 bedrooms. they lease a new car every year.
I paid cash for a low mile 05' GMC sierra 2500hd.
I make in a month and a half what they do in a year. Just yesterday he was showing me his new dining plate set. cost = $120.00 per plate. no sympathy.
February 14th, 2015 at 01:18 pm 1423919924
As for Mrs A I've "loaned" her money, yeah okay I'm a stupid bleeding heart. It wasn't a lot just enough to cover her kids getting into a playspace. So she's made a lot of commentary about money probably because I "loan/paid". But seriously I used to think until this most recent conversation her husband made at least $100k and she spent freely. I knew she was subsidized by living free with her mom, but still she spends like she makes double what they make. Even other friends who have no idea what they make said "how can someone driving the 8 person diesel Mercedes SUV have money problems?" Because driving that car usually implies a lot of income.
So it's depressing because Ms A thinks money will solve all problems and it really won't. I thought she was making double and spending every penny. Turns out she makes way less and is spending out of control. I know she's maxed out many CC and keeps getting more but I always assumed they could manage just well they spend A LOT.
As for my DK classmates I hope they do make a lot of money. But even if they do leasing cars is probably one reason why saving for college is impossible. I can't comment on the rest of their spending but saying "i lease X, Y, or Z and can't save for college." I am drawing a direct correlation and not judging. If they didn't have a car payment = college savings for sure. That $500/month can go into a college account. Perhaps they are rolling in dough, but if you comment you can't save for college? Well then it's time to examine the budget.
Maybe saving for college can't happen because you have no slack. But if you have a $500+/month car payment you have slack. Drive a less expensive car and save for your kid.
February 22nd, 2015 at 04:29 pm 1424622541
March 8th, 2015 at 09:56 pm 1425851790