Survival Debt: it's a bad, bad sign

[BraggSurvivor]

How a vicious cycle starts: no emergency savings.

At least use a HELOC if you own your home.

http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/TheWorstKindOfDebtChargingTheGroceries.aspx

[crashdive123]

Budget, budget, budget.

[Alpine_Sapper]

Budget, budget, budget.

That assumes that your incoming cash exceeds what you're paying out. If you don't bring in enough in a month to cover the rent and groceries, and the light bill, damn the cable and phone, but you're still gonna end up in debt. Sounds like it's time to give up some free time and go get another job. What if you can't find one? the next month the light bill is now under "imminent disconnection" and the landlord is puttin 3-days to lockout notices on the door. Not saying everyone is a victim of circumstances, but there are situations where you just can't cover the basics of sustaining a life in the city. Especially when a catastrophe hits and you have to use the rent money to cover that. The situation just snowballs. It takes a helluva lot longer to dig yourself out of a hole than it does to get in one.

[crashdive123]

All of that can be true. It can happen to anybody. I still believe that we (I) need to budget. When times get tougher, I may have to do without some things. I may need to get a 2nd or 3rd job. I may need to move. I may not live the lifestyle that I would like to, but rather the one that I need to. I may need to seek help. It's all about survival.

[Rick]

You bet, crash. I've spent my time living from payday to almost payday. First years of marriage, little guys coming along, crappy car that ran when it wanted to, which was seldom followed by never. You just have to stay within your means and set your goals. Then go after them. We didn't go anywhere we couldn't take the kids. Ate out twice a year. Didn't buy what we couldn't afford.

I've worked two jobs. I've worked 70 hour weeks. You just suck it up, Mary Jane, and do it. If you stay true to your goals then somewhere along the way you turn the corner and start having disposable income you can sock away. The key is to be lucky enough and smart enough not get in the hole to start with.

[crashdive123]

The key is to be lucky enough and smart enough not get in the hole to start with.

Seems like the harder I work - the luckier I get.

[BraggSurvivor]

Baby Boomer spending BOOM is now over forever . At this point the vast majority of Baby Boomers are now in their savings years . The last Baby Boomer born in 1962 will turn 48 years of age in 2010 , what that means is that every Baby Boomer will have passed through their peak spending years . The U.S. is about to experience the flip side of the biggest population boom in it's history . Paying down debt and saving for retirement is all this country is going to get out of this generation from here out .

Japan , the only country in the G7 , who had their Baby Boom pre WW2 has been stuck in a no growth funk for decades . Now the U.S. and very shortly developed Europe , will slip into that same decades long funk .

Make no mistake , this is NOT a recession , it's a demographic phenomenon . All G7 countries except Japan are heading into this so called "slow down" . (The G-7 consists of the United States, Japan, Germany, France, United Kingdom, Italy and Canada) Those of us who liquidated over-priced assets , eliminated all debt , and are living small should do just fine . Those who are over loaded with debt , and their lenders , are in deep crap .

On top of the above , over the next few years the remaining parents of the Baby Boomers will die off . The illegal immigrants will head back to where ever they came from , leaving empty dwellings all over this country. Businesses who were dependant on the housing boom , from furniture to two by fours, will be swept into history's Boomer dust bin . There are going to be empty homes , shopping centers , office buildings and factories every where you look .

[Alpine_Sapper]

All of that can be true. It can happen to anybody. I still believe that we (I) need to budget. When times get tougher, I may have to do without some things. I may need to get a 2nd or 3rd job. I may need to move. I may not live the lifestyle that I would like to, but rather the one that I need to. I may need to seek help. It's all about survival.

Oh, I agree. My point was simply that a budget alone is not the answer. Disciple to cut back and determination to work that 2nd or 3rd job with no sleep is necessary as well. Like you said, it's all about survival.

[Rick]

Bragg - Now is the time Baby Boomers CAN spend. 401K's have been locked until 59 1/2 (unless they drew money through an SEPP). Homes are paid down or off. Kids are raised. Those big item expenses (house, school, camp, gym) are now behind them. It's time to enjoy life with travel and leisure.

[Ole WV Coot]

I don't think I would want to be 18 again and start over. This thread brought back memories of working at least 12hrs a day and saving change for groceries. I would turn in over 100 paid hrs every week with OT and barely keep my head above water. I hope I am wrong but it seems like when it gets tough now younger people run home to Mom & Dad. I probably did wrong but I gave my son a choice when he finished high school. I told him I would pay everything if he went to college and made decent grades, I would support him for 3 months until he got a job or I would drive him down to the local recruiter of his choice. I have kinda smoothed a few rough spots for him over the years but he did OK. I am like Rick, I am enjoying life. I can wake up on a wet, snowy day laugh like crazy and go back to sleep.

[bulrush]

Baby Boomer spending BOOM is now over forever . At this point the vast majority of Baby Boomers are now in their savings years .

Make no mistake , this is NOT a recession , it's a demographic phenomenon .

Good points Bragg. I had forgotten about this part.



The illegal immigrants will head back to where ever they came from , leaving empty dwellings all over this country.

I disagree with this point. Immigrants will continue to come into the US because the US still offers the best economic opportunities, slow down or not.
Just because there is a slowdown does not mean Americans will begin to pick veggies for low pay because they still have the entitlement "I'm too good to pick veggies" attitude.



There are going to be empty homes , shopping centers , office buildings and factories every where you look .
I agree with this too. And I've been seeing it for the past 15 years. I've seen empty business buildings on the older parts of town for many years. I've been in the same town since 1992 and the empty businesses have been very consistent.

[bulrush]

Bragg - Now is the time Baby Boomers CAN spend. 401K's have been locked until 59 1/2 (unless they drew money through an SEPP). Homes are paid down or off. Kids are raised. Those big item expenses (house, school, camp, gym) are now behind them. It's time to enjoy life with travel and leisure.

Not quite true Rick. Consider this: many baby boomers depended on getting a pension from their employer after retirement, so they have no 401k or IRA. Now that their company is broke or nearly broke, pensions are gone and suddenly they have to start saving for an IRA. It has happened to some people I know.

A pension is not a guarentee, it's a luxury. Much like Social Security.

[Rick]

Bulrush - When a person is in their 20s, 30s, and 40s they should be saving every nickle and dime they can put away. 401Ks first, Roth IRAs second. If they wait until retirement then they missed a boat that sailed long ago.

Are there folks out there that match your description? You bet. Plenty, because they did not save when they should have and they put their eggs in a single basket. But it certainly does not apply to the majority of baby boomers. Look at where the advertising dollars are being spent today. It's geared toward the 20-30 year olds because they are just coming into good money and it's geared toward baby boomers because they are the largest pool of disposable income. You won't see a lot of advertising dollars spent on the 40-50 year olds because they are the ones that are strapped for cash putting kids through college and pushing the final bit of cash toward their retirements.

I'm with Coot. I wouldn't do it over again if I could. It just keeps getting better.

[BraggSurvivor]

Getting rich is simple.

Set appropriate goals and work hard to meet them. Live below your means. Don't get divorced!

[Rick]

You buy the beer this time. We both agree on that one! Right on the money (pun intended).

[WildGoth]

It takes a helluva lot longer to dig yourself out of a hole than it does to get in one.

how do you dig yourself out of a hole:confused:

[crashdive123]

Using a smaller shovel you tunnel horizontaly for 63 yards (in order to place a sufficient amount of distance between you and the original hole). Then, carefully and slowly start digging toward the surface. Once you break the surface climb out.:rolleyes::D;):p

[beerrunner13]

Getting rich is simple.

Set appropriate goals and work hard to meet them. Live below your means. Don't get divorced!

That's where I went wrong didn't read step four, Dang it. On the other hand you know why some devorces are so expensive?...... They are worth it :eek: